Half The Country Makes Less Than $27,520 A Year And 15 Other Signs The Middle Class Is Dying

If you make more than $27,520 a year at your job, you are doing better than half the country is.  But you don't have to take my word for it, you can check out the latest wage statistics from the Social Security administrationright here.  

But of course $27,520 a year will not allow you to live "the American Dream" in this day and age.  After taxes, that breaks down to a good bit less than $2,000 a month.  You can't realistically pay a mortgage, make a car payment, afford health insurance and provide food, clothing and everything else your family needs for that much money.  That is one of the reasons why both parents are working in most families today. 

 In fact, sometimes both parents are working multiple jobs in a desperate attempt to make ends meet.  Over the years, the cost of living has risen steadily but our paychecks have not.  This has resulted in a steady erosion of the middle class.  Once upon a time, most American families could afford a nice home, a couple of cars and a nice vacation every year.  When I was growing up, it seemed like almost everyone was middle class.  But now "the American Dream" is out of reach for more Americans than ever, and the middle class is dying right in front of our eyes.

One of the things that was great about America in the post-World War II era was that we developed a large, thriving middle class.  Until recent times, it always seemed like there were plenty of good jobs for people that were willing to be responsible and work hard.  That was one of the big reasons why people wanted to come here from all over the world.  They wanted to have a chance to live "the American Dream" too.

But now the American Dream is becoming a mirage for most people.  No matter how hard they try, they just can't seem to achieve it.

And here are some hard numbers to back that assertion up.  The following are 15 more signs that the middle class is dying...

#1 According to a brand new CNN poll, 59 percent of Americans believe that it has become impossible for most people to achieve the American Dream...

The American Dream is impossible to achieve in this country.

So say nearly 6 in 10 people who responded to CNNMoney's American Dream Poll, conducted by ORC International. They feel the dream -- however they define it -- is out of reach.

Young adults, age 18 to 34, are most likely to feel the dream is unattainable, with 63% saying it's impossible. This age group has suffered in the wake of the Great Recession, finding it hard to get good jobs.

#2 More Americans than ever believe that homeownership is not a key to long-term wealth and prosperity...

The great American Dream is dying. Even though many Americans still desire to own a home, they are losing faith in homeownership as a key to prosperity.

Nearly two-thirds of Americans, or 64%, believe they are less likely to build wealth by buying a home today than they were 20 or 30 years ago, according to a survey sponsored by non-profit MacArthur Foundation. And nearly 43% said buying a home is no longer a good long-term investment.

#3 Overall, the rate of homeownership in the United States has fallenfor eight years in a row, and it has now dropped to the lowest levelin 19 years.

#4 52 percent of Americans cannot even afford the house that they are living in right now...

"Over half of Americans (52%) have had to make at least one major sacrifice in order to cover their rent or mortgage over the last three years, according to the “How Housing Matters Survey,” which was commissioned by the nonprofit John D. and Catherine T. MacArthur Foundation and carried out by Hart Research Associates. These sacrifices include getting a second job, deferring saving for retirement, cutting back on health care, running up credit card debt, or even moving to a less safe neighborhood or one with worse schools."

#5 According to the U.S. Census Bureau, only 36 percent of Americans under the age of 35 own a home.  That is the lowest level that has ever been measured.

#6 Right now, approximately one out of every six men in the United States that are in their prime working years (25 to 54) do not have a job.

#7 The labor force participation rate for Americans from the age of 25 to the age of 29 has fallen to an all-time record low.

#8 The number of working age Americans that are not employed has increased by 27 million since the year 2000.

#9 According to the government's own numbers, about 20 percent of the families in the entire country do not have a single member that is employed at this point.

#10 This may sound crazy, but 25 percent of all American adults do not even have a single penny saved up for retirement.

#11 As I noted in one recent article, total consumer credit in the United States has increased by 22 percent over the past three years, and 56 percent of all Americans have "subprime credit" at this point.

#12 Major retailers are shutting down stores at the fastest pace that we have seen since the collapse of Lehman Brothers.

#13 It is hard to believe, but more than one out of every five children in the United States is living in poverty in 2014.

#14 According to one recent report, there are 49 million Americansthat are dealing with food insecurity right now.

#15 Overall, the U.S. poverty rate is up more than 30 percent since 1966.  It looks like LBJ's war on poverty didn't work out too well after all.

Sadly, it does not appear that there is much hope on the horizon for the middle class.  More good jobs are being shipped out of the countryand are being lost to technology every single day, and our politicians seem convinced that "business as usual" is the right course of action for our nation.

Unless something dramatic happens, it is going to become increasingly difficult to eke out a middle class existence as a "worker bee" in American society.  The truth is that most big companies these days do not have any loyalty to their workers and really do not care what ends up happening to them.

To thrive in this kind of environment, new and different thinking is required.  The paradigm of "go to college, get a job, stay loyal and retire after 30 years" has been shattered.  The business world is more unstable now than it has been during any point in the post-World War II era, and we are all going to have to adjust.

So what advice would you give to people that are struggling out there right now?  Please feel free to share your thoughts by posting a comment below…

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7 In 10 Americans Believe The Crisis Is Not Over and Worst Is Yet To Come... 52% Can't Afford Their Homes

For all the talk about a recovery, pundits, especially those who peddle expensive newsletters, continue to forget one key distinction of the New Normal: there are those for whom the recovery has never been stronger, well under 10% of the population, i.e., the already wealthy whose net worth is allocated in financial assets. And then there is everyone else, that vast majority of Americans, who not only have not benefited by the Fed's relentless balance sheet expansion and accompanying asset reflation but whose incomes just posted the first decline in real terms since 2012.

It is this latter segment that should be concerned by a recent survey conducted by the MacArthur Foundation titled "How Housing Matters".

According to the survey during the past three years, over half of all U.S. adults (52%) have had to make at least one sacrifice in order to cover their rent or mortgage. Such sacrifices included getting an additional job, deferring saving for retirement, cutting back on health care and healthy foods, running up credit card debt, or moving to a less safe neighborhood or one with worse schools.

More disturbing, the survey also found that while there are some indicators that the American public’s views about the housing crisis are shifting toward the positive, large proportions of the public are not feeling the relief: seven in 10 (70%) believe we are still in the middle of the crisis or that the worst is yet to come. 

And no, it is not just the high school graduates who are desperate: a whopping 60% of college grads agree: the worst is yet to come (perhaps after looking at their student loan balances).

Some more facts.

As MarketWatch reports, "although mortgage rates are still quite low, down payments, poor credit and tighter lending standards remain three of the biggest hurdles for buying a home, especially among young people, Blomquist says. “The slow jobs recovery for young adults has made it harder for them to save and to get a mortgage.” Some 84% of young people are delaying major life decisions due to the poor economy, according to a 2013 survey by Generation Opportunity, a nonprofit think tank based in Arlington, Va."

What’s more, at least 15% of American homeowners (or residents of 78 counties across the country) were living in housing markets where the monthly mortgage payment on a median-priced home requires more than 30% of the monthly median household income — long considered the maximum for rent/mortgage repayments. Housing costs above that threshold are “unaffordable by historic standards,” says Daren Blomquist, vice president at real estate data firm RealtyTrac. In New York county/Manhattan, mortgage payments represent 77% of the median income and in San Francisco County represents 70%.

As a result of a broken economy and lack of good job opportunities the "American dream" is now on its last legs: more than half of Americans, or 54%, believe that buying a home has become less appealing than it once was while some 43% of respondents have indicated that it is no longer the case that owning a home is “an excellent long-term investment and one of the best ways for people to build wealth and assets." Even as seven in 10 renters (70%) aspire to owning a home, high proportions (58%) believe that “renters can be just as successful as owners at achieving the American Dream.”

Why not: as long as one is able to delude themselves that renting the American Dream is "good enough."

And the biggest disconnect between the abovementioned pundits, all of whom most likely have lucrative jobs that pay 6 or 7 figure incomes:while economists and housing experts say the housing crisis is behind us, large proportions of the American people are not feeling the relief.  Very high proportions of the public (70%) continue to believe that we are still in the midst of the housing crisis (51%) or that the worst is yet to come (19%). Only 25% believe “the housing crisis is pretty much over.” The public in 2014 is only slightly more optimistic than it was one year ago, when 77% believed we were still in the middle of the crisis or that the worst was yet to come.  More than two in five adults (42%) believe the housing market today continues to be a serious problem.

The biggest irony is that for most, the biggest culprit for the current economic fiasco, the US government, is the only entity that can help in the existing economic predicament:

Americans believe that government can and should be doing more to improve housing affordability for both renters and owners. Indeed, most do not think that either homeownership or renting should take priority. Rather, solid majorities want the federal government to invest in both equally.

Stupidity aside, we hope that this clarifies the perpetually nagging question: why is there is no retail participation in this Fed-engineered, centrally-planned rally. The simple answer: people just don't have the disposable income to chase stocks at record highs. The not so simple answer: people's faith in US capital markets, just like their economic well-being, is slowly being eroded at the expense of the wealthiest 1% of US society, which, as Piketty correctly observes (if incorrectly diagnoses ways to fix) has never been richer.

Credit to Zero Hedge

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France Responds To US BNP Fine, Will Train Hundreds Of Russian Seamen To Operate French-Made Warship

In the aftermath of the Russian sanctions, which French president Francois Hollande vehemently approved after constantly slamming Russia's involvement in the Ukraine conflict, and even went so far to threaten the cancellation of a delivery of a powerful French-made amphibious assault warship, the Mistral, to be delivered to Russia something happened: in the latest demonstration of its impotence to punish domestic bankers, the US decided to slap a French bank, BNP Paribas with a $10 billion fine for money laundering.

As a result, France has suddenly found itself battling two populist fronts: on one hand it had to continue its foreign policy track of siding with NATO and the US when it comes to Russian developments; on the other it had to responds to howls of protest from the population bashing the US for having the temerity to punish its flagship bank (recall "France Furious At US $10 Billion BNP "Masterful Slap", "Racketeering" Fine").

Today, it was revealed that in weighing the two evils, it picked what it thought was the lesser one, and as the WSJ reports "a group of 400 Russian sailors are scheduled to arrive on June 22 in the French Atlantic port of Saint-Nazaire to undergo months of instruction before some of them pilot the first of two Mistral-class carriers back to Russia in the fall, said one of these people."

As the WSJ explains, the training is a pivotal step that deepens France's commitment to fulfilling the €1.2 billion ($1.6 billion) contract to supply Russia with the carriers, which are built to launch amphibious attacks with landing craft, helicopters and tanks.

That this is taking place even as the U.S. and other allies have called on the government of President François Hollande to cancel the contract, "arguing the ships will significantly enhance Russian naval power at a time when the Ukraine crisis has raised tensions with the Kremlin to their highest levels since the Cold War," demonstrates conclusively that money talks and diplomacy walks. It also demonstrates that in the increasingly more fragile western alliance against Russia (recall further that German commercial interests have made it quite clear they will not agree with any further Russian sanctions over fears of lost revenue), Obama's foreign policy partners are dropping like flies when the opportunity cost is lost business with the Kremlin.

More from the WSJ:

Paris insists the training doesn't tie its hands and that it won't make a final decision on the delivery until October. But Mr. Hollande's government also has said France intends to honor the contract, and privately officials give no indication they will renege.

France's ability to reverse course on the delivery, defense analysts say, will be diplomatically and commercially constrained once the Russian Navy arrives on its shores to begin the training and prepare to drive the carrier home.

"Four hundred Russian trainees are rather difficult to keep below the radar," said Nick Witney, a defense analyst with the European Council on Foreign Relations. Other observers say that Paris's credibility to deliver on future contracts is also at stake.

As noted, Obama will not be happy and the training of Russian seamen will surely be a topic of hot debate between Obama and Hollande when the two meet in Paris today, on the eve of D-Day commemorations on the beaches of Normandy, where ironically Russia's Putin will not be present, but Ukraine's new "chocolate king" president will be.

It is not just Obama who will be furious with the latest revelation, further impairing his foreign policy credibility: other European nations are sure to voice their anger too, most notably Poland which feels particularly threatened by developments in the Ukraine:

For months, France has faced staunch opposition from the Obama administration and other Western governments including the U.K. to the plan to sell the ships—criticism that has grown in the wake of Russia's annexation of Ukraine's breakaway Crimea region. In an interview published in French daily Le Monde on Monday, Polish Foreign Minister Radoslaw Sikorski warned Russia might use the ships to "threaten neighbors."

"We have named Russia as an aggressor in Crimea, and I don't think France would want to be supplying useful arms to an aggressor," Mr. Sikorski said.

However, as stated earlier money, Russian money, talks:

The tug of war over the Mistral illustrates how Europe's reliance on Russian resources risks unraveling strategic alliances that helped the West win the Cold War. The European Union is deeply divided over how far the bloc should go in imposing sanctions on Russia over its Ukraine incursion. Russian natural gas powers homes and businesses across Germany, the EU's biggest economy, while Russian oligarchs store their fortunes in U.K. banks.

France's economy—hobbled by decades of de-industrialization and rising labor costs—is hungry for large defense contracts that could help get the country's beleaguered shipyards back on their feet. Saint Nazaire, a port which boasts a proud history of building France's biggest ships, now relies on the occasional cruise-ship contract for economic survival.

The government says about a thousand jobs are at stake, in a country with more than 10% unemployment and a stalled economy.

Calling off the Mistral contract, a French official said, would be akin to "shooting yourself in the foot," forcing Paris to take the costly step of reimbursing Moscow.

France has already completed the first ship and built half of the second Mistral, which is scheduled for delivery in 2015. The second ship is named The Sevastopol after the Crimean port that serves as a headquarters for Russia's Black Sea Fleet.

Incidentally, the Mistral will fill a key missing void in Russia's Black Sea fleet: the ability to launch amphibious assaults on bordering nations, such as Georgia.

The Mistral, which looms over the town, is a potent weapon. The length of more than two football fields, the ship is designed to edge up to a shoreline and deploy more than a dozen tanks and attack helicopters as well as hundreds of troops. This type of ship is also an integral part of the North Atlantic Treaty Organization's defenses, using sensitive communications technology to coordinate operations with other NATO ships. The potential transfer of that technology to Russia has long worried policy makers on both sides of the Atlantic.

The ship also plugs a crucial gap in Russia's armed forces. Moscow boasts one of the world's largest armies and a formidable air force. But Russia's Black Sea fleet lacks an amphibious vessel like the Mistral, capable of launching a land invasion. That weakness deprived Moscow of a crucial knockout punch in 2008, when Russian troops invaded Georgia but never managed to dominate the former Soviet countries shoreline, forcing a stalemate.

"A ship like that would have allowed the Black Sea Fleet to accomplish its mission in 40 minutes,"Russian Navy Admiral Vladimir Vysotkiy said at the time.

Ironically, it was none other than former French president Sarkozy, who had brokered the truce between Russia and Georgia in 2008, who proposed building the ship which would have made Russia's annexation of Georgia a walk in the park.

The proposal to sell France's prized warship to Russia grew out of the Georgian conflict. In October 2008, France's president at the time, Nicolas Sarkozy met with his counterpart President Dmitry Medvedev in the Alpine town of Evian in a bid to shore up a fragile truce Mr. Sarkozy had brokered between Russia and Georgia weeks earlier. By offering to sell Russia the Mistrals, Mr. Sarkozy aimed to persuade the Russians that NATO was no longer an enemy.

Georgian President Mikheil Saakashvili flew to Paris to protest the sale, but Mr. Sarkozy brushed aside his complaints during a tense meeting in the Élysée Palace, according to a French official. "Look Mikheil, Russia is not going to invade Georgia with this boat," Mr. Sarkozy said, according to the official. Mr. Sarkozy then quipped that it was no use worrying about a Russian invasion, because the Russians were "already in your territory."

Years later, the sale has come back to haunt France's government.

And now it is set to haunt the US as well: "Last month, Assistant Secretary for Europe Victoria Nuland told U.S. lawmakers: "We have regularly and consistently expressed our concerns about this sale."

Things are only set to get worse for the State Department once photos of hundreds of "sanctioned" Russian troops being trained by the French hit the front pages of newspapers around the world, in clear defiance of US policy:

French officials haven been poring over the technical details of the training session and deliberating how to temporarily house the Russian troops while they are in French territory without attracting too much attention, said one of the people familiar with the matter.

Russia and France had planned to lodge the troops in a Russian vessel docked in Saint-Nazaire, but the person said French officials are reviewing more discreet options.

Meanwhile it is none other than Putin who continues to have the last laugh, again, and again.

Credit to Zero Hedge