It’s time to review the latest numbers. We hear from Washington that the economy is stronger than ever. Perhaps. But that doesn’t mean the American middle class is in good shape.
So here are the disturbing facts:
Americans are so financially stressed that 32 percent of them run out of money between paychecks. The percentages of those who run dry between paydays are worse among the poorest workers, but the problem of living from paycheck to paycheck is not limited to them alone. For example, 31 percent of workers earning $100,000 to $129,999 suffer from the same syndrome: running out of money between paydays.
Americans are deeper in debt than ever before. US household debt has passed $14 trillion dollars. That’s $1.5 trillion more than late in 2008, when the economy cratered and millions of American lost their homes. Meanwhile, and although the economy is in an record expansion now going on 127 months, credit card debt is at record highs. Just in the last quarter alone balances rose 5 percent to $930 billion, while delinquencies are at an 18-month high. Half of student loans are non-performing, in some state of deferral, grace period, or default.
Yet in a prolonged expansion and what is touted as the strongest economy ever, the chairman of the Federal Reserve had to lecture congress about its deficits. Powell made the obvious point that the current deficit and debt trajectory is unsustainable.
On Monday, President Trump proposed a federal budget for fiscal year 2021, one that comes with another trillion-dollar deficit. And never mind that the proposal is claimed to put the government on track for a balanced budget in 15 years. We are old enough hands that we have heard that sort of thing before. In fact we have heard it more times than we can count.
Here’s a reality check: the only budget that ever counts in Washington is the one for the current year.
And we don’t rely it in very much.
We don’t put much faith in anything that comes out of Washington. As we said, we’ve are students of history and have ourselves been around for a long time.
That’s why we put our trust in gold.
Shouldn’t you do the same?