Really Pissed Off!

By the time I’m finished writing this piece, many of you will be deeper in debt and sinking fast. Back in September, one of the first articles written for RPO on Spetember1, 2007 was The plunging Real Estate Market: Is this the tip of the iceberg? It was a serious assessment of what was happening to the American Economy, and it prophesied a serious Recession. Well…the Recession has arrived! Fed Chairman Ben Bernanke may be hedging on its arrival, but you don’t have to look very far to realize that it has arrived, and may have found a comfortable home!

Recently, Pete Peterson, investment banker and Senior Chairman of the Blackstone Group was interviewed and brought up a number of points, which, by themselves, outline what may well be heading our way. First and foremost, Americans today are not saving Money! More that 52% of all Americans cannot afford to save. The Wachovia Group published a study in which they breakdown economic groups by age and income and their inability, or unwillingness to save. We hit an all-time low in Savings of minus .05% in January 2006, something that we haven’t seen since the Great Depression in 1932! Saving money created what we know as the Middle Class. Many of us are in it, think we’re in it but we’re not, or trying to get in it and can’t. It was created most recently as a result of the Second World War, the GI Bill and the decision of Corporate America that “what’s good for GM is good for the country, and vice versa.” It was Charlie Wilson, Head of GM and later Secretary of Defense in the Eisenhower Administration who said it. It was the new Middle Class that allowed GM and most of the other major corporations to grow throughout the last half of the 20th Century. The Economy was built on credit as well as savings. Times were good!

What’s happened is that we have turned into a nation of Debt! The debt is not just isolated to Sub Prime Mortgages and Credit Cards; it filters down throughout the entire Economy. The collapse of the Sub Prime Mortgages was foreseen by anyone who had any sense, except those poor bastards who were pounced upon by the financial institutions who sold them. As early as last Fall, over 1.4 million foreclosures were predicted for 2008, and the number keeps climbing. According to the Federal Reserve, the average household was carrying $8,500.00 in credit card debt! Your cost of living has shot up more than your realize, until you take a good look at what you paid only a few months ago for the same item. but overall, whatever the Hell you’re purchasing, it is costing you more money! The only items that have had their prices cut are big ticket items, and that’s only to move the stock for the new models of junk that you’re being conned into buying.

And now we hit the crux of the problem. We have been conditioned by Corporate America to go on a spending spree for the past ten years. Well, the party is over and the American consumers have spent themselves into unimaginable debt. The problem is that by not continually consuming the Economy will face collapse even sooner than predicted. It will also cause a tsunami across the Global Economy, as it relies on us to keep it fired up. To top it off, the recent bailout of Wall Street by the Federal Reserve only proves that the moneyed interests in this country are making certain that the average taxpayer in this country is going to have to bear the burden of keeping the rich even richer! And just to make matters worse, you and I are stuck with the cost of the War in Iraq, which may exceed three trillion dollars! What the Hell has happened to this country? What the Hell are we going to do about it! Don't spend your Tax Rebate! Either start a Savings Account and build it up so you can invest it wisely or use to pay down the principle on your Credit Cards. Just in case you were wondering who is getting all of the money, take a good look, as 70% of it is sent to the top 40% income brackets! To end this on a cheery note, here is Mort Zuckerman’s take on the Economy. Mort Zuckerman is the editor-in-chief of U.S. News & World Report, as well as Chairman and Co-Publisher of the New York Daily News: