10 Reasons Why Average Americans Are Going To Be
Squeezed Until They Have Nothing Left
To Give
By Michael Snyder
DailyMarkets.com
American families better get ready to tighten their belts again.
There is every indication that we are all going to
really start feeling the squeeze in the months
ahead. The price of gas is starting to spike again.
The price of food is moving north. Health
insurance premium increases are being announced
coast to coast and a whole slate of tax increases is
scheduled to go into effect in 2011.
Meanwhile, household incomes are down substantially
all over the nation and the U.S. government is
indicating that there will not be an increase in
Social Security benefits for the upcoming year once
again. So if the cost of most of the basic
things in our monthly budgets is going up and our
incomes are going down what does that mean? It
means that average American families are about to be
squeezed like nothing we have seen in decades.
The reality is that it is getting really hard to make it out there.
Not only do most households have both parents
working, but in many cases both parents are getting
second or even third jobs. Things have gotten
so bad that millions of Americans have felt forced
to turn to the government for assistance just to
survive.
It can be really disheartening to come to the end of the month and
realize that despite your best efforts you have less
money than you did at the beginning of the month.
But that is where millions upon millions of American
families now find themselves.
The economic despair in the air is almost palpable. Already
hordes of Americans are truly and honestly hurting
and things are only going to get worse.
The following are ten reasons why ordinary hard-working Americans
are about to really start feeling the squeeze….
#1 Gas prices are going up again. AAA says that the average
price of a gallon of regular gasoline in the United
States was
$2.80
on Sunday. That is 32.6 cents higher than it
was during the same time period in 2009. As
oil and gas prices continue to go up, that is also
going to have a significant impact on utility
bills for American families this winter.
#2 The price of food is poised to rise substantially.
Bloomberg is reporting
that the the cost of meat in the United States is
going nowhere but up. But meat is not the only
thing that you will soon be paying much more for at
the supermarket. Wheat, corn, soybeans and
almost every other major agricultural commodity is
absolutely soaring this fall. As this
continues, it is inevitable that ordinary
Americans will see
much higher food prices
at their local grocery stores.
On a previous article,
a reader named Erica left a comment in which see
detailed the stunning food inflation that she is
seeing where she lives….
Food inflation is real, and it is here. Just yesterday I compared my
receipt from a grocery run to prices I have from the
same exact store from September 15, 2009. Bacon? Up
52% to $13.69 from $8.99 for 4 lbs. Butter? Up 73%
to $9.99 from $5.79 for 4 lbs. Pure vanilla extract
up 14% to $6.79 from $5.95. Chopped dried onions up
a mere 2% but minced garlic (wet) was up 32%.
#3 It looks like those receiving Social Security are not going to be
seeing cost-of-living increases again.
The Associated Press is
reporting
that the U.S. government is expected to announce
some time this week that the tens of millions of
Americans that receive Social Security will
go through yet another year
without an increase in their monthly benefit
payments. You see, Social Security
cost-of-living adjustments are tied to the official
government inflation numbers, and according to the
U.S. government there is basically very little
inflation right now. Of course we all know
that is a lie, but it is what it is.
#4 The cost of health care continues to soar into the stratosphere.
Americans already pay more for health care than
anyone else in the world, and yet costs continue to
spiral out of control. The cost of health care
increased
a staggering 9.6%
for all U.S. households from 2007 to 2009.
Now, health insurance companies from coast to coast
are announcing that they must
raise health insurance
premiums substantially due to the new health care
law that Barack Obama and the Democrats have pushed
through. So in 2011 it looks like the average
American family is going to have to carve out an
even bigger chunk of the budget for health care.
#5 American families could desperately use a recovery in the housing
industry, but that is simply not going to happen.
Foreclosure-Gate
is getting worse by the day, and it threatens to
bring the U.S. real estate industry to a complete
and total standstill. If it is ultimately
proven that the paperwork for millions of mortgages
in the United States is seriously deficient, it
could push hordes of mortgage lenders into
bankruptcy and render mountains of mortgage-backed
securities nearly worthless. Regardless, it is now
going to be much more difficult to get a mortgage,
much more difficult to buy a home and much more
difficult to sell a home. We could very well
be looking at the next stage of the housing crash.
Ordinary Americans could end up losing trillions
more in home equity.
#6 More Americans than ever find themselves unable to pay their
bills, and an increasing number of frustrated
creditors
are actually resorting
to wage garnishment. Yes, you read the
correctly. Creditors are starting to
ruthlessly go after the weekly paychecks of debtors.
The following is an excerpt
from a recent New York
Times article that discussed the rise of wage garnishment as a weapon against
debtors….
After winning, creditors can secure a court order to seize part of
the debtor’s paycheck or the funds in a bank
account, a procedure called garnishment. No national
statistics are kept, but the pay seizures are rising
fast in some areas — up 121 percent in the Phoenix
area since 2005, and 55 percent in the Atlanta area
since 2004. In Cleveland, garnishments jumped 30
percent between 2008 and 2009 alone.
So if you are getting behind on your debt, you better watch out –
your creditors may soon decide to garnish your
wages.
#7 Americans now owe more on student loans than they do on credit
cards. As hard as that is to believe, that is
actually true. Americans now owe
more than $849 billion
on student loans, which is a new all-time record.
Student loan payments can be absolutely crippling to a household
budget. This is especially true for young
Americans that have just gotten out of school.
Sadly, student loan debt is nearly impossible to get
rid of. Once you are committed, it will follow
you around for the rest of your life.
#8 Even as expenses rise, incomes are down from coast to coast.
Median household income in the U.S. declined from
$51,726 in 2008
to $50,221
in 2009. There are very few areas that have
not been affected. In fact, of the 52 largest
metro areas in the United States,
only the city of San
Antonio
did not see a decline in median household
income during 2009.
#9 If all of this was not bad enough, now there are rumblings that
the U.S. Federal Reserve is actually thinking that
we need more inflation. A number of top
Federal Reserve officials have come out recently and
have publicly supported the notion that the Fed
needs
to purposely create more
inflation
in order to stimulate the economy. Of course
what they don’t tell the American people is that
inflation is a hidden tax on every single dollar in
our wallets and in our bank accounts. More
inflation would be really bad news for ordinary
Americans, because they are already having a tough
time getting their dollars to stretch far enough.
#10 Apparently the U.S. government (and many state and local
governments) think that this is a great time to
stick it to the American people by hitting them with
a slew of new taxes. There are so many tax
increases scheduled to go into effect in 2011 that
it is hard to keep track of them all. In fact,
there are many (myself included) that are calling
2011 “the
year of the tax increase“.
But the Americans that are going to get it the worst
of all are those that are going to get hit with the
Alternative Minimum Tax. One out of every six
American households is going to be hit
with a tax increase
averaging $3,900 (thanks to the AMT) and most of them don’t even know that it is
coming.
So did you think that 2010 was bad?
Well, you haven’t seen anything yet.
2010 was a Sunday picnic compared to what is coming.
Get ready to get squeezed.
Get ready for higher food prices, higher gas prices, higher health
insurance premiums and higher taxes.
Get ready to try to do a lot more with a lot less.
Inflation is already here, but it is going to get a whole lot worse.
Meanwhile, the U.S. government (along with state and
local governments) is going to continue to have a
voracious appetite for more revenue.
Average Americans are going to be squeezed until they have nothing
left to give. Then they are going to be
squeezed just a little bit more.
Are you ready?