I can’t help questioning why this economic melt-down happened and it always brings me back to the dreaded Baby Boomers.
The false prosperity we have been experiencing for the last thirty years has come to an abrupt conclusion in the last 18 months. The amount of wealth destroyed is beyond comprehension. Household net worth has declined by $12 trillion in a matter of months. It will take years for average Americans to restore their wealth to 2007 levels. If your investment portfolio has declined by 50%, it will need to increase by 100% to break even.
According to the Wall Street shills on CNBC, it should take at least 3 months. An honest financial advisor would tell you 10 to 15 years. Americans have no choice but to substantially increase their rate of savings. Think back to yesteryear in 1981 when the savings rate was 12%. Back then, Americans accepted as a truth that hard work and a saving ethic led to long-term success.
I can’t help questioning why this happened. It always brings me back to the dreaded Baby Boomers. Their delusional belief that somehow they could borrow and spend today with real estate wealth funding their retirement came crashing down around them in the last 18 months. The bailing out of these delusional boomers with tax dollars has generated incredible anger in the country. Those who followed the rules are being compelled by the authorities to pay for the sins of those who didn’t follow the rules.
The stupendous fabric of the country is straining and in danger of yielding to the immense pressure building up in our society. I believe the actions taken by politicians and Washington bureaucrats in the last year have marked a point of no return. If we continue on the chosen path, time or accident will ultimately result in the demise of the Great American Experiment. I’m irate at the government for choosing to bailout excessive risk takers at my expense. There are millions of other Americans who feel the same way. This is why tea parties are taking place across the nation. I truly believe that every American has the right to make his or her own financial decisions. While I do not judge individuals on how they live their lives, I feel entitled to pass judgment on clusters of people whose individual decisions have negatively impacted my life. With the support of Congress, the Treasury, and the Federal Reserve, these individuals are seizing my tax dollars as compensation for their idiotic behavior.
I believe everyone has a right to live their lives as they see fit. This is America, land of the free, home of the brave. When powerful government bureaucrats choose to subsidize the conscious blunders of others through the utilization of my tax dollars, I’ve got a big problem. There are approximately 308 million people living in the United States, 75 million of these people are under 18 years old and 40 million are over 65 years old. They are generally off the hook regarding the current financial crisis. That leaves 195 million people. The 80 million Baby Boomers (the pig in the python) are at the root of most problems in our society today.
Approximately 12% of the U.S population (36 million people) are considered poor and are totally dependent upon the State to keep from starving. The working class makes up 40% of the population, the middle class 45%, and the ruling elite class 3%. All of these classes made dreadful mistakes in the last decade. The poor pretended to be middle class. They were able to buy $200,000 houses, lease $30,000 cars, own cell phones, get monthly cable, and eat out three times per week. Their friendly neighborhood banker loaned them the money to live this fantasy life. The working and middle class were able to buy $700,000 McMansions, go on trips to Europe, lease $50,000 cars and generally live the life of the rich and famous. A different banker in a nicer neighborhood also loaned them the money to live like rock stars. A portion of all these classes were the extremists that led us down the erroneous path to destruction.
Extreme behavior by individuals throughout our society, encouraged by banks, the government, Federal Reserve, and the mainstream media have pushed our country to the brink of disaster. Half of the households in America make less than $46,000 per year. I can guarantee you that the household incomes in the neighborhoods of West Philadelphia that I drive through to work every day are much lower than $46,000. Half the houses are boarded up, and rats are the predominant tenants. When I see a middle aged lower income woman driving an $87,000 Mercedes SUV or a young punk driving an $85,000 BMW, I know something has gone seriously off course. The auto financing companies were willing to make 7 year 0% interest loans or $400 a month leases available to these people. They did it because they were able to parcel these awful loans into a package, get it rated AAA by Moody’s and sell the toxic stench bomb to pension funds and life insurance companies. Meanwhile the deadbeats cruising around in the luxury wheels got to live the fake American Dream for awhile.
Extremism was not relegated to only the poor. The lifestyles of the rich and famous are nauseating and revolting to the average middle class American. Watch one episode of the Housewives of Orange County or New York to understand the shallowness and pretentiousness of the privileged rich. Across America there are millions of people whose sense of worth is tied to the McMansion they live in, the brand of car they drive, the school they send their kids to, and the number of electronic gadgets they can accumulate. The majority of these people can be found on the East Coast and West Coast. Wall Street and Hollywood are the Mecca for these arrogant, vain, self-centered snobs. The powerful few in our society took extreme risks in the casinos of Wall Street. AIG, Goldman Sachs, Lehman Brothers, Bear Stearns, among others were inhabited by multi-millionaire gamblers. They had already socked away millions in bonuses and stock options, but their arrogance and pride led them to take even more extreme risks. They ultimately destroyed the financial system. Now they want you and I to come to their rescue, for the good of the country.
The people of our great country must heed the words of David Walker, unless we want it to collapse into a heap of smoldering ashes.
“The US government is on a ‘burning platform’ of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration, and overseas military commitments threatening a crisis if action is not taken soon. There are striking similarities between America’s current situation and the factors that brought down Rome, including declining moral values and political civility at home, an over-confident and over-extended military in foreign lands and fiscal irresponsibility by the central government.”
Let’s see how far we’ve come. I guess we’re going to find out.