Reasons why Middle Income Class Is in CRISIS and Declining!!

            The United States is unique because its MIDDLE income have grown, prospered and provided the foundation of its society… BUT THE MIDDLE INCOME is DECLINING and in JEAPODY…I would like to outline some of the reasons for its decline.

Reason #1— IMPOSSIBLE TO GROW SAVING! The Federal Reverse’s 12 years of low interest policy has made it impossible for the middle class, and those on FIXED income to grow their savings. This means that they are unable to grow their assets to pay for their homes, their children’s education, their healthcare, to provide for “rainy days” and retirement.

Reason #2— CREDIT CARDS charge USURY rates! The rates charged on interest charges range from 18 to 24 % and have had a very negative impact on the ability of middle income. Unfortunately many people don’t recognize this major cost and use credit card debt to finance their life style.

Reason #3— FEWER FULLTIME JOBS and GROWTH OF CONTRACT WORKERS! I have maintained for over a decade that all middle-income people are becoming CONTRACT workers and are being forced to work without the security and benefits of a FULL time employee. More and more companies are even using “internships” to get people to work for nothing.

Reason #4— EDUCATIONAL COSTS ARE CREATING “INDENTURED SERVANTS”! Student debt is weighing on students and their families. The idea that college education will enable graduates to earn more is becoming less and less creditable. Students are so burdened with debt that they can’t afford to live on their own and many have moved back with parents. The middle-income class is competing against foreign students who are subsidized by their government or given scholarships.

Reason #5- HEALTHCARE COSTS ARE OUT OF CONTROL! In my last note, I described what is happening to healthcare costs and the negative impact on not only the affordability of healthcare but the trend to put off treatment. WSL August 29 describes the increase cost and declining availability of healthcare insurance for the middle-income class.

Reason #6—INCREASING DEPENDENCE ON “BIG GOVERNMENT”. There is no question that the Federal, State and Local governments’ spending are out of control. To make it even worse, the percentage of the spending on pensions and other obligations have increased to a point the most of the money is not spent on infra-structure, education, security and healthcare but on paying off the pension obligations which continue to accelerate. This will get worse when interest rates increase and they must pay of their debt obligations.

            If these trends continue then the United States will become like almost every other nation in the world. There will be the SUPER RICH/ POLITICALLY CONNECTED class, and a significant number of POOR and dependent and LITTLE OR NO MIDDLE INCOME. The MIDDLE INCOME CLASS has been the major differentiator for America and we must take action to prevent it from disappearing entirely NOW!!!