If you showed the chart below to the average American and asked them what it means to their life, their eyes would glaze over and they would pray that someone would send them a text or a tweet so they could escape from actually thinking. It is so much easier to vote for the sweaty gay stutterer on American Idol or pick their NCAA pool. I’m sorry to say that at least 90% of adult Americans don’t even know what GDP stands for. At least 90% of adult Americans couldn’t define what the term median means. Ignorance is worn like a badge of honor in this country. We don’t want to think. We want to believe. We don’t want to understand. We want to feel. We don’t want to read. We want to be told what we should worry about. We don’t want to work. We want what’s coming to us. That’s a shame. I suppose it is just part of living during the ebb and decline of an empire. Delusion is preferable to reality until the delusion is shattered.
This one chart explains everything that is wrong with this country from an economic standpoint. Real (adjusted for inflation) household incomes are lower today than they were 24 years ago. The average American’s income has gone nowhere in decades. But, somehow GDP has risen 70% over the last 24 years. 71% of GDP is made up of consumer expenditures. That is a fact. A critical thinking person might ask, “How could GDP rise by 70% if the people doing the consuming have seen their household income decline?”. It is actually quite simple. The Wall Street bankers and their sugar daddies (Greenspan & Bernanke) have been in control of our financial and economic system during this entire 24 year period of devastation. In 1989 there was $749 billion of consumer credit outstanding. Today there is $2.795 trillion of consumer credit outstanding. So, while household incomes dropped, our use of debt for consumption went up by 273%. Thank you Wall Street bankers. This doesn’t include the exotic mortgage products, HELOC, and home equity loans that have allowed millions to spend money they didn’t have. Homeowner equity in their homes is at three decade lows.
For some persepective, there were 247 million Americans in 1989, so the consumer debt per capita was $3,000. Today there are 315 million Americans, so the consumer debt is $9,000 per person. Our household incomes declined, while our debt tripled. Who benefitted from this debt fueled spending frenzy? Certainly not the average American. They are in debt up to their eyeballs. The only beneficiaries of this result were the men who created it – Wall Street bankers and the ruling class of mega-corp executives, billionaire parasites, and corrupt politicians who have been bribed to keep the debt fueled frenzy continue through legislation and lack of regulation. The ruling class has won a hollow victory, as there is a limit to a debt fueled economy. We’ve reached the limit. They have pressed their foot to the accelerator and the crash that follows will be epic. Enjoy the ride.