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Snyder: The “Tapped Out” American Consumer

Recently we wrote about the latest decline in consumer confidence, but the real story here is what Michael Snyder of The Economic Collapse blog refers to as the “tapped out” American consumer. He’s right … “The center cannot hold,” we often say – referring to a shrinking pool of working and…

Recently we wrote about the latest decline in consumer confidence, but the real story here is what Michael Snyder of The Economic Collapse blog refers to as the “tapped out” American consumer.

He’s right …

“The center cannot hold,” we often say – referring to a shrinking pool of working and middle class Americans forced to subsidize handouts to the non-working poor and super rich (while simultaneously sustaining bloated bureaucracies at all levels of government). The smaller this pool of working and middle class Americans becomes – and the less spending power it has – the more the consumer economy will contract.

Anyway Snyder did a great post recently on this subject – and as with all of his pieces it was chock full of facts to support his conclusions.

Entitled “19 Signs That The U.S. Consumer Is Tapped Out,” Snyder’s column notes that “years of declining incomes and rising debts” are finally beginning to adversely impact the American economy.

“In order to have an economy that is dependent on consumer spending, you need to have a large middle class,” he writes. “Unfortunately, the U.S. middle class is steadily shrinking, and unless that trend is reversed we are going to see massive economic changes in this country.”

Here are Snyder’s nineteen signs … 

#1 Real disposable income per capita continues to fall.  In the fourth quarter of 2012, it was sitting at $37,265.  By the time that the fourth quarter of 2013 had come around, it had dropped to $36,941.  That means that average Americans have less money to go shopping with than they did previously.

#2 In January, real disposable income in the U.S. experienced the largest year over year decline that we have seen since 1974.

#3 As disposable income decreases, major retailers are closing thousands of stores all over the country.  Some are even calling this “a retail apocalypse“.

#4 From September 2013 to January 2014, the personal saving rate in the United States dropped by a staggering 16 percent.

#5 During the fourth quarter of 2013, we witnessed the largest increase in consumer debt in this country that we have seen since 2007.

#6 Fewer Americans are applying for mortgages these days.  In fact, the MBA Purchase Applications Index is now the lowest that it has beensince 1995.

#7 Overall, the rate of homeownership in the United States has fallen for eight years in a row.

#8 Many Americans are finding it increasingly difficult to afford a new car or truck.  The following comes from a recent CNBC article

A new study shows the average household in 24 of America’s 25 largest metropolitan areas cannot afford to pay for the average priced new car or truck.

“Just because you can manage the monthly payment doesn’t mean you should let a $30,000 or $40,000 ride gobble up such a huge share of your paycheck,” said Mike Sante, managing editor of Interest.com. “Many people are spending money on a car payment that they could be saving.”

#9 Incredibly, 56 percent of all Americans now have “subprime credit” at this point.

#10 Total consumer credit has risen by a whopping 22 percent over the past three years.

#11 In the third quarter of 2007, the student loan delinquency rate was7.6 percent.  Today, it is up to 11.5 percent.

#12 Overall, U.S. consumers are $11,360,000,000,000 in debt.

#13 While Barack Obama has been in the White House, median household income in the United States has fallen for five years in a row.

#14 U.S. workers are taking home the smallest share of the income piethat has ever been recorded.

#15 One recent study found that about 60 percent of the jobs that have been “created” since the end of the last recession pay $13.83 or less an hour.

#16 Middle-wage jobs accounted for 60 percent of the jobs lost during the last recession, but they have accounted for only 22 percent of the jobs created since then.

#17 According to one recent survey, only 35 percent of all Americans say that they are better off financially than they were a year ago.

#18 In 2008, 25 percent of all Americans in the 18 to 29-year-old age bracket considered themselves to be “lower class”.  In 2014, an astounding 49 percent of them do.

#19 The poverty rate in America has been at 15 percent or above for 3 consecutive years.  That is the first time that has happened since 1965.

Yeah … depressing huh?

Indeed. We shared this list with a friend of ours whose only response was “now I feel like I should go slit my wrists.”

A more productive response? Identifying the government policies responsible for producing these abysmal outcomes – and reversing them.

Like Snyder’s website, FITS has often been labeled a source of “doom and gloom.” Maybe so … but that’s only because the numbers are truly gloomy, and government’s only response is to exacerbate its doomed policies.

We’re not “doom and gloom” then … we’re just telling the truth.

Anyway, we have faith that people will eventually figure out what’s happening …  hopefully before it’s too late. Perhaps that faith is misplaced, but it sure beats the alternative.

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40 comments

GrandTango March 18, 2014 at 8:21 am

No matter how much the media and Obama liee…soon enough, the working people, and those stupid enough to vote for democrats, will get pinched in the @$$..Your child will have to do without, so you can pay for Obama’s golf trips and lavish parties…

It’s fine to stand on the soapbox and Bash Romney, because you hate him, because you have made some bad decisions…but when Obama drains “The Rich” dry, …he’ll have to come to you….. It’s simple math…

And when Obama and Reid have @$$-raped you of every last penny…maybe then, you’ll see you were a F*#king idiot, and Big T was right….and FITS played you for a Dumb@$$…

Of course you’ll never admit that…but when you get in that ballot box, it will be evident as Obama is Thoroughly Rejected in Nov. 2014…and the democrats get the living $#!* kicked out of them in 2016, too…

Better days ARE ahead…but we must limit the damage of Obama, starting today…

Reply
Smirks March 18, 2014 at 8:36 am

Of course you’ll never admit that…but when you get in that ballot box,
it will be evident as Obama is Thoroughly Rejected in Nov. 2014…

What are you talking about? Remember how your incredibly accurate prediction of the 2012 election came true? Romney’s president now. Obama didn’t stand a chance, just as you told us. And Republicans actually gained seats in the House, and retook the Senate. America rejected Obama, the ACA, and Democrats completely. Nate Silver was made a laughing stock and Karl Rove even had a victory lap on Fox News after Ohio went 99% red. You don’t remember all of that?

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GrandTango March 18, 2014 at 9:49 am

Yes I was wrong. But I was 1,000% RIGHT about 2010…But your sorry, dis-honorable @$$ just chokes on shaft when I ask you about 2010, because you are a no-good, punk piece of $#!*…

And the BIG difference between me, and dirt like you…I’ll admit I’m wrong. That’s how you correct your mistakes. How was I to know that you’d have racist B*t*ch-Hags like Melowise Richardson, a poll worker, voting for Obama six times (at least) in Ohio?
Did I know that more than a dozen Precincts in Pa. would have 1,000 percent Obama votes, which is impossible to happen w/o mass cheating???

I learned that you Filthy, corrupt, anti-American animals will do anything to keep your god in place to employ his GREED…so you can Hate fellow-and-working Americans.

But that B@$*@rd ain’t on the ballot now. It’s mostly white democrats…and those criminals you Suck-off don’t give a $#!* about honkeys on election day…not to the extent you’ll need, to overcome the mass F*@k up Obama is…

That said: the country is suffering even more because I was wrong..and your Greedy, Lazy @$$ does not care. And that is WHY you will get the S#!t kicked out of you..you F*@king Brain-Dead idiot….

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tomstickler March 18, 2014 at 10:19 am

Any sane person would ask whether anyone has followed up on that Philadelphia Enquirer article that reported preliminary results showing 59 precincts had zero Romney votes.

Anyone?

McCain got zero votes in 57 Philly precincts in 2008.

Other than Fauxrage, any evidence of fraud?

http://triblive.com/politics/politicalheadlines/3241049-74/precincts-romney-votes#axzz2wK9absTU

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GrandTango March 18, 2014 at 10:58 am

So you cheated in 08, too…
What a F*#king surprise…

PS: Notice your ignorant @$$ declined to mention Melowuise Richardson, face of the democrat voter patrol (along w/ the New Black Hater Panthers)….

Bobby Penz March 18, 2014 at 1:45 pm

What about Adam Ward, Enrico “Jack” Villimaino, and let’s not leave out Rebekah Joy Paul and Christian Davis Price…and you’re talkng a couple NBPs and (6) votes frm a pollster?

truthmonger March 18, 2014 at 12:57 pm

What a little bitch you are, GT. Can’t make a rational argument to save your life, so you cover it up with personal attacks. I guarantee you aren’t this mouthy or brave face-to-face.

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GrandTango March 18, 2014 at 2:22 pm

Rational. I’m against Obama care. You’re for it dumb@$$…you’re about as irrational as possible…

euwe max March 18, 2014 at 5:02 pm

Yes I was wrong.
——-
wrong tense.

Reply
tomstickler March 18, 2014 at 8:59 am

Joseph Stiglitz can explain a lot. Hope this is not behind a firewall for you.

http://opinionator.blogs.nytimes.com/2014/03/15/on-the-wrong-side-of-globalization/?_php=true&_type=blogs&_r=0

Check out the rest of “The Great Divide” linked on the above page.

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GrandTango March 18, 2014 at 4:21 pm

Thank you so much..The NYT says it’s NOT Obama…it’s Globalization…

You are so valuabe…w/o blithering F*@king idiots like you…we’d be in a mess……..ooops…

Reply
euwe max March 18, 2014 at 5:04 pm

we can’t be in a mess – we have *you*!

Reply
vicupstate March 18, 2014 at 9:04 am

http://en.wikipedia.org/wiki/File:Median_US_household_income.png

#13 is not in agreement with this chart and the drop started two years BEFORE Obama was elected. Does Michael Synder work for the Heritae Foundation or some other right wing outfit.

Reply
Jackie Chiles March 18, 2014 at 9:20 am

http://www.huffingtonpost.com/2013/09/17/median-income-falls-inequality_n_3941514.html

No, he probably got it from the left wing organization called the Huffington Post.

Reply
Bible Thumper March 18, 2014 at 9:05 am

I don’t deny that the problems are real, but there was “Doom and Gloom” in the 1930’s and 1970’s. It is not the end of civilization as we know it. It’s not the “Hunger Games”.

Reply
euwe max March 18, 2014 at 10:40 pm

“The fall of the Roman Empire, and the equally (if not more) advanced Han, Mauryan, and Gupta Empires, as well as so many advanced Mesopotamian Empires, are all testimony to the fact that advanced, sophisticated, complex, and creative civilizations can be both fragile and impermanent.”

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puh-leeze March 18, 2014 at 9:06 am

This is still a horrendous economy, but a lot in the article is fluffly bull shit – and not ‘chocked’ full of cogent information anyway. Consumer debt going up is actually a sign of consumer confidence. The US savings rate was actually negative for a while not just . Years ago. During the great recession – revolving consumer debt dropped for almost 23 months straight – because there was NO confidence in the US economy at that time – first time it had happened.

the US brick and mortar retail market had been building sq footage at . Times the rate of population growth since 1984 – 2012, even without the internet, and the best economy in history, it was totally unsustainable. Just looking up a bunch of numbers and throwing them in to support a pre-stated hypothesis is worse than unintentionally mis-using statics. This guys is none too wise. I see why FITS loves him.

Reply
puh-leeze March 18, 2014 at 9:08 am

* eight times the rate

Reply
truthmonger March 18, 2014 at 12:51 pm

Consumer debt going up is a clear indicator that wages are too low and/ or prices too high for most Americans.

Reply
I'm an economic idiot March 18, 2014 at 1:19 pm

What’s the proper wage rate?

Reply
euwe max March 18, 2014 at 5:01 pm

more than an employer wants to pay.

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I'm an economic idiot March 18, 2014 at 9:18 pm

Then we should determine what that is and force them to pay it!

euwe max March 18, 2014 at 9:56 pm

That’s called a “union”.

I'm an economic idiot March 18, 2014 at 11:58 pm

Why not have government do it?

I'm an economic idiot March 18, 2014 at 9:20 am

We need more deficit spending. We need to prime the pump. Government hasn’t done enough spending to increase demand.

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A man who stands for nothing.. March 18, 2014 at 10:18 am

Why do you think hard-working American earners despise it when you glorify silver-straw trust-fund playboys by giving them space on your site. Choose a side FITS and then ride it like you stole it.

Reply
gregorybgeddings March 18, 2014 at 12:03 pm

Fits chose a side a long time ago…whatever benefits himself in the short run.

Reply
euwe max March 18, 2014 at 5:00 pm

The Libertarian ideal.

Reply
GrandTango March 18, 2014 at 11:16 am

Romney was not my first choice,…but the mess would not be nearly as bad if we would have just Dumped Obama’s sorry @$$ when we had the chance…

From the Wall Street Journal:

Romney: The Price of Failed Leadership
The President’s failure to act when action was possible has diminished respect for the U.S. and made troubles worse. By Mitt Romney

March 17, 2014 7:17 p.m. ETWhy are there no good choices? From Crimea to North Korea, from Syria to Egypt, and from Iraq to Afghanistan, America apparently has no good options. If possession is nine-tenths of the law, Russia owns Crimea and all we can do is sanction and disinvite—and wring our hands.

Iran is following North Korea’s nuclear path, but it seems that we can only entreat Iran to sign the same kind of agreement North Korea once signed, undoubtedly…

Romney is so much smarter than the Dumb@$$ Obama…

Reply
Rocky March 18, 2014 at 1:21 pm

Because we’d be handlin’ Putin easy with Romney – get us some more horses and bayonets. Maybe a couple of them battleships like the USS North Carolina.

Sour grapes, they taste so so,
they’re a favorite of Grand Tango.

Reply
truthmonger March 18, 2014 at 12:49 pm

Funny how “Sick” Willie always blames government policies and NEVER the simple greed or mismanagement in the private sector. Are there some issues with government policies? Sure, but the private sector also needs to own up to its own shortcomings. Cut government into nonexistence and the problems caused by excessive greed and dishonesty in management will still exist.

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euwe max March 18, 2014 at 1:44 pm

foreign intervention, antagonism towards unions and higher minimum wage, wars based on lies on the credit card, outsourcing, H1 visas, bail outs, Income disparity – I had no idea that there was still an economy left to fuck over.

Let’s end taxes – cut food stamps, stop unemployment insurance and end medicare, start new wars with Iran and Russia… it’s the only way to finish it off.

Reply
GrandTango March 18, 2014 at 3:13 pm

What’s funny (or disgusting) there are a lot of ignorant MoFos that would vote for Obama again, if they could…Most of the idiots who post on this site still refuse to admit what a TOTAL F*#k up Obama is…

Democrat is the party of selfish GREED. On top of that, they eff up the economy, so it’s even harder for us working people to prop up their lazy, American-hatin’ @$$#$….

Reply
Professional Journalist Union® March 18, 2014 at 3:31 pm

GT: The hardest working troll propping up the lazy, ‘Merican-hatin’ @$$#$!!

You’re pulling a double today??

Reply
GrandTango March 18, 2014 at 4:18 pm

Thanks for supporting my point…I would not look nearly as smart as I do, w/o Dumb@$$#$ like you…

Reply
euwe max March 18, 2014 at 5:03 pm

I would not look nearly as smart as I do
——-
there’s a lower bottom? OMG!

Reply
Peter Palms March 20, 2014 at 4:24 pm

google+

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Peter Palms March 20, 2014 at 4:42 pm

In days gone by, this increase in the money supply through Quantitative Easing (legalized counterfeiting would have caused prices and wages to go up almost immediately. Not anymore. Prices and wages are controlled. What does happen, however, is that the government is caught in its own trap. It needs to keep the workers happy by giving them wage increases, but it also needs to keep its factories functioning by allowing price increases as well. The wage-price spiral, therefore, is not elimi­nated. It is merely delayed a few months. And, instead of happen­ing in response to the interplay of supply and demand in a free market, it is directed by bureaucratic formula. The end result is the same either way. The people of the world are still paying the cost of their international and local governments through the
hidden taxation called inflation.

In the chaotic past, the industrialized nations of the world went through phases of disruptive inflation often exceeding 1000% per year. That served a purpose in helping to destroy public faith in their existing national governments. It softened them up and made them more willing to accept drastic changes in their life styles and their political institutions. It paved the way to The New World Order. But now we have arrived, and extreme inflation rates—at least in the absence of war—would cause public dissatisfaction and be counterproductive. Inflation, therefore, has now been institu­tionalized at about 5% per year. That has been determined to be the optimum level for generating the most revenue without causing public alarm. Five per cent, everyone agrees, is “moderate.” We can live with that, but we tend to forget it is 5% per year, forever.

A 5% devaluation applies, not only to the money earned this year, but to
all that is left over from previous years. At the end of the first year, the original dollar
is worth 95 cents. At the end of the second year, it is reduced again by 5% leaving its worth at 90 cents, and so on. After 20 years, the government will have confiscated 64% of every dollar we saved at the beginning of our careers. After working 45 years, the hidden tax on those first-year dollars will be 90%. The government will take virtually all of them over our lifetime. Current income and earned interest will partially offset this effect but it will not alter the underlying reality of government confiscation.

EFFECT OF “MODEST” 5% INFLATION

For the past fifty years, all the published charts illustrating the decline of the dollar from such-and-such a date to the “present” show the following type of
curve. 64% in 20 years 93% in 45 working years to retirement, over a lifetime 100 confiscation of savings through inflation tax

These, of course, are averages. A few people in the middle class of the bureaucracy will have managed to place some of their dollars into tangible assets or income-producing securities—what few remain—where they are somewhat protected from the effects of inflation. For the vast majority, however, inflation hedges constitute but a tiny fraction of all they have earned over a lifetime.
And so we find that, in The New World Order, inflation has been institutionalized at a “modest” level of five per cent. Once in every five or six generations—as prices climb higher and higher—a new monetary unit can be issued to replace the old in order to eliminate some of the zeros. But no one will live long enough to experience more than one devaluation. Each generation is unconcerned about the loss of the previous one. Young people come into the process without realizing it is circular instead of linear. They cannot comprehend the total because they were not alive at the beginning and will not be alive at the end. In fact, there need not even be an end. The process can be continued forever.
By this mechanism—and with the output of work battalions— government can operate entirely without taxes. The lifetime output of every human being is at its disposal. Workers are allowed a color TV, state-subsidized alcohol and recreational drugs, and violent sports to amuse them, but they have no other options. They cannot escape their class. Society is divided into the rulers and the ruled, with an administrative bureaucracy in between. Privilege is now largely a right of birth. The worker class and even most of the administrators serve masters whom they do not know by name. But serve they do. Their new lords are the monetary and political scientists who created and who now control The New World Order. All of mankind is in a condition of high-tech feudalism.

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Peter Palms March 20, 2014 at 4:48 pm

These, of course,are averages. A few people in the middle class of the bureaucracy will have managedto place some of their dollars into tangible assets or income-producing securities—what few remain—where they are somewhat protected from the effects of inflation. For the vast majority, however, inflation hedges consti­tute but a tiny fraction of all they have earned over a lifetime.

And so we find that, in The New World Order, inflation has been institutionalized at a “modest” level of five per cent. Once in every five or six generations—as prices climb higher and higher—a new monetary unit can be issued to replace the old in order to eliminate some of the zeros. But no one will live long enough to experience more than one devaluation. Each generation is uncon­cerned about the loss of the previous one. Young people come into the process without realizing it is circular instead of linear. They cannot comprehend the total because they were not alive at the beginning and will not be alive at the end. In fact, there need not even be an end. The process can be continued forever.

By this mechanism—and with the output of work battalions— government can
operate entirely without taxes. The lifetime output of every human being is at its disposal. Workers are allowed a color TV, state-subsidized alcohol and recreational drugs, and violent sports to amuse them, but they have no other options. They cannot escape their class. Society is divided into the rulers and the ruled, with an
administrative bureaucracy in between. Privilege is now largely a right of birth. The worker class and even most of the administrators serve masters whom
they do not know by name. But serve they do. Their new lords are the monetary
and political scientists who created and who now control The New World Order. All of
mankind is in a condition of high-tech feudalism.

Reply

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