Monday, December 24, 2007

To Have or to Have Not

"No matter how rich you become, how famous or powerful, when you die the size of your funeral will still pretty much depend on the weather."
Michael Pritchard

The income gap disparity in the United States has widened dramatically in the last 7 years particularly between the top 1 percent and all the rest. Americans earning more than $348,000 in 2005, received their largest share of yearly income since 1928. Those incomes rose to an average of $1.1 million each. New data also shows that the top 300,000 Americans collectively enjoyed almost as much income as the bottom 150 million Americans. Per person, the top group received 440 times as much as the average person in the bottom half earned, nearly doubling the gap since 1980. Wall Street bonuses are up by an average 14 percent over their record year in 2006. The Bush tax cuts target these top percenters particularly the top .1 percent, the 140,000 households of the extremely rich. This trillion dollar give-a-way comes at the expense of all the rest. Needless to say, high-end goods like luxury yachts and Ferraris are flying off the lots while sales of mid-level products are static.

Buy For Me

We are no longer citizens, but a nation of consumers. We are buying things that we don't need with money that we don't have. Consumer spending now accounts for nearly 70 percent of our GDP. As if taking the lead from a government gone wild and fighting a trillion dollar war with borrowed money, the average Joe is spending his children's future on the narcotic of credit card debt.

Credit Card Crunch is On

Partly a Byproduct of The Subprime Mortgage Crisis, This Development Could Spell more Trouble Ahead

Associated Press, December 24, 2007

Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come. An Associated Press analysis of financial data from the country's largest card issuers also found that the greatest rise was among accounts more than 90 days in arrears. Experts say these signs of the deterioration of finances of many households are partly a byproduct of the subprime mortgage crisis and could spell more trouble ahead for an already sputtering economy.... Many personal financial coaches expect this trend to accelerate in 2008, particularly among people who took out nontraditional loans whose interest rate has risen, requiring owners to pay mortgages several hundred dollars more than just a year ago. "You're looking at more and more distress, consumers desperately trying to preserve their credit lines, but there's nowhere else to go," said Robert Manning, director of the Center for Consumer Financial Services at Rochester Institute of Technology. "It's like a game of dominoes."