So, you cut back on your lifestyle; performed a so un-Greek personal austerity reset but your credit card balance is still creeping up; or perhaps you are slowly burning through your savings; or you are at the end of the line; abandon ship. Whatever, you have a lot of company out there.
Why is it so hard to make ends meet these days? The days of living high on the credit hog are over and we all have to get small but in the end, we still have to make ends meet; we have to pay for food, pay for utilities, buy gas, etc. How to make that work?
We all bought a lot of stuff during those days of easy credit. Debt driven demand drove up the value of lots of things. Homes increased in value so much that they became a kind of income harvested through a home equity line of credit. Autos got big and powerful again making them unaffordable to buy and operate now that we have to live within our means. Cell phones replaced land lines and cost a lot more; especially when everyone in the family has to have one. Maybe you have a home that you cannot sell and you are stuck living 20 miles or more from your workplace and your car is fast reaching the point when you will need a new one just to get to work.
We are all waiting, waiting for the economic reset so that things are valued in a way that makes sense to people’s lives and salaries but it won’t happen because it can’t happen. The assumption made by economists is that we structured our lives around having credit available and we need to restructure; but that is not enough, our society has also structured itself around what freewheeling credit bought us and that we cannot afford anymore. Unsellable homes built far away from work places requiring unaffordable transportation to get to work where a pay cut is more likely than a pay raise. Our society has to restructure itself if we are to make the adjustments needed to live in the reality of today’s economy.
Perhaps you noticed that food is getting more expensive even as everyone worries about deflation. The same economists are trying to drive inflation up because it means no deflation. Mr. Bernanke is fueling up his helicopter just now for a new round of “quantitative easing”; Ben is going to guarantee that there is no reset; that homes remain over priced and that our lives cannot get on to whatever it is they are supposed to be. The powers that govern cannot or do not have the will to restructure the economy and our society but expect us to restructure our lives just the same.
It is time to ask some questions and get some answers. Who was doing the thinking when the government started giving corporate America incentives to offshore our best highest paying jobs to India and China? The deflation of wages due to offshoring is exactly the kind of dynamic that is crushing the American middle class. Who was doing the thinking when American agriculture was outsourced to Mexico with the help of NAFTA? Who sold NAFTA as free trade instead of what it is, a corporate land grab south of the border? What interests of American farmers in such a thing? How is it that higher education is now only affordable for the very rich? How is it that our public education system has sunk to the point where schools are in some cases limited to four days a week? How is it that with one of the worst and most unaffordable healthcare systems that we get health care reform giving us still the worst and most unaffordable healthcare system?
My family Doctor has over a million dollars in student loans to payoff; he currently works as an indentured servant for healthcare insurance companies. It is happening to all of us; our debts are turning us all into indentured servants of the banksters. I went to a public University where Tuition cost $1200 a year. In forty years that cost for the same public University in 2009 was $27,000 a year a 2250% increase! Inflation since then was 417%. Why then doesn’t it cost just $5,000 a year to go to my old school? The answer is student loans; the ability to pay high tuition inflated tuition prices to a ridiculous extent; more than five times than it should be. With freewheeling credit anyone can become an indentured servant; why wouldn’t corporate America want that? Now, what will happen if the Universities have to reduce their tuitions? Do you think my old school; the University of California is going to reduce its tuition in light of the state’s financial condition? Not going to happen.
The United States has closed its manned rocket program. In a few months, after retiring the shuttles, the U.S. will no longer have the capability of taking people to or from the International Space Station. The country that put people on the moon can’t fly anymore. There is only a hope that private industry will somehow find its way into orbit but meanwhile the Russians do it for us. They are laughing, they won the space race after all. The United States is going backwards, a regression that will become permanent if something isn’t done about it.
Without government stimulus money, I happen to know that the county responsible for the rural road that I live on won’t be able to repave it. It will eventually turn to gravel and potholes impassable by anything without four wheel drive, four hooves, or fat bike tires; perhaps an old Model A Ford could do it but not the neighbor’s Prius. This is the fate of America, a regression to a time very much like the late forties if we are lucky.
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