Economists say that by early 2006, we (the American Middle Class) started losing big. Here we thought we were on a roll. We got suckered into thinking we had the game beat and borrowed to the max. Where'd we get the money? Well, about 90% of our life savings was in our homes, so from 2003 to 2007, we took $2.3 trillion out through refinancing and equity loans and spent about $1.3 trillion of it just on stuff.
How's the game going now? Well, in terms of income, we've been falling behind for decades. So far we're told we've taken losses to the tune of 55% of the value of our homes. How much is that? In this game, the Federal Reserve keeps the books and they say $7.38 trillion of our wealth is now gone. Most of us didn't have much wealth to begin with — on average about $100,000. Now it's a much lower number, and we're debating whether it can still be called "wealth" at all?
Most of the middle class still want to play, but an unusually large number of us have been kicked out of the game altogether. The "unemployed" now amounts to over 9% of the total labor force. That's the number the government tells us anyway. There are also quite a few though that have given up and quit trying. When they do that, the government won't even consider counting them in the stats. If you're not a player, or you've quit trying to be a player, it appears you become nobody.
In the movie "Wallstreet," Gordon Gecko said "It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another." For a long time now, that transfer of money has gone to the perception of the already rich and their stand-in corporations.
With the upper classes prospering and global markets booming, they don't need the U.S. middle class to play any more. If we do get in the game for another hand, what say we go all in. Heck, it's too late to play it close to the vest if we've already lost our shirt.
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