Barack Obama wrote in the Financial Times recently that it's time to rescue the masses from their mortgages. He's got a plan worthy of a leading presidential contender. He says he'll impose fines on the bad lenders...and give the money to the good voters (oops...we mean, the good homeowners). Just what you'd expect. A safety net for everyone.
The ratio of houses-to-be-sold to those sold, has risen to its highest level in 16 years. Foreclosures continue to rise. And now credit card defaults are rising too.
But here's some good news:
"WASHINGTON (AP) - Five years into a national economic recovery, the share of Americans living in poverty finally dropped.
"The nation's poverty rate was 12.3 percent in 2006, down from 12.6 percent a year before, the Census Bureau reported Tuesday. Median household income increased slightly, to USUS$48,200."
Hey, wait a minute. We've been reporting that Americans are getting poorer. How could there be fewer poor people? Something is wrong here.
And here it is, in the next paragraph:
"Individual earnings dropped for both men and women in 2006, but more members of each household worked, resulting in the overall increase in household income, said David Johnson, chief of the Census Bureau's Housing and Household Economic Statistics Division.
"The numbers provided some good economic news at a time when financial markets have been rattled by a slumping housing market. But they were tempered by an increase in the number of Americans without health insurance, from 44.8 million in 2005 to 47 million last year."
Wait a minute again...how is it good news that people are earning less money...but working harder and longer in order to keep up household income? Here's a suggestion that will double household income – the Joneses can move in with the Smiths...the Newtons and Smallskys can combine households too. Hey...presto...greater household incomes.
Bill Bonner
The Daily Reckoning Australia
Are people getting richer or poorer? Leave a comment below.
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About the Author
Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
Comment by rc on 30 August 2007:
That is rather humerous.
Comment by Marco on 30 August 2007:
Yup - everyones being screwed over alright, gone are the days of the stay at home mum to raise well balanced kids, drop em off at childcare at 6 weeks old collect them when theyre 18.
Wonder how long it will be till we have the gap in wealth that rivals that of developing countries ?
Comment by geoff on 30 August 2007:
when the zombies wake up the desire for blood is going to be off the guages
Comment by Eric on 31 August 2007:
Getting more work out of people for less pay. Hey doesn't that mean an increase in productivity. Yet another plus, hurray us.