February 5, 2014
A poll conducted by NBC News and Marist paints a bleak financial picture for millions of Americans. Nearly 20 percent, more than 40 million Americans, say they have a difficult time making ends meet.Sen. Ted Cruz: Income inequality caused by big government.
The poll follows the results of a report released last year by the U.S. Census Bureau. It showed household income steadily declining since the Great Recession began in 2007. Median income in 2012 was $51,017 a year, down from $51,100 the year before. In 1999, median income was $56,080 when adjusted for inflation. The report also showed 46.5 million Americans mired in poverty.
Last January the Commerce Department reported personal income had fallen 3.6% that month, the largest decline in 20 years. Taxes and inflation made the decline even bigger. Disposable personal income fell by 4%. It was the largest loss in half a century.
According to the NBC News/Marist survey the tipping point is $50,000 a year. 30 percent of adults earning less than $50,000 per year describe their finances as weak while only 5 percent of those who earn more say the same. “Americans 45 to 59 years old, who may still be supporting their children while at the same time caring for parents, are more likely than other age groups to say their money situation is faltering. One in five members of this generation — 20 percent — says their household finances are weak.”
Debt is a factor. The poll revealed that nearly 10 percent, 22 million Americans, are trapped in debt. “Americans who earn less than $50,000 a year are four times more likely than those who make more to be overwhelmed by their level of debt. 16 percent of those with an annual salary less than $50,000 experience significant financial stress compared with only 4 percent who earn more.”
As of January 2014 the average credit card debt in America stood at $15,279. The average mortgage debt is $149,925 and the average student loan debt load is $32,250. In total, Americans owe a staggering $11.36 trillion in debt and $856.9 billion in credit card debt.
Census Bureau figures and polls, however, do not show the primary reason for declining incomes and the erosion of the middle class. Obama and the new Federal Reserve boss, Janet Yellen, say income inequality is a serious problem, yet they do not explain why and they never will.
The precipitous decline in middle class wealth is largely the fault of the Federal Reserve and government economic policy. The Federal Reserve enables deficit spending by government and fractional reserve lending by banks. It does this by creating money out of nothing. This influx of new money dilutes the value of existing currency and creates inflation. This represents an invisible tax government never talks about.
“Unfortunately no one in Washington, especially those who defend the poor and the middle class, cares about this subject,” Ron Paul notes. “Instead, all we hear is that tax cuts for the rich are the source of every economic ill in the country. Anyone truly concerned about the middle class suffering from falling real wages, under-employment, a rising cost of living, and a decreasing standard of living should pay a lot more attention to monetary policy. Federal spending, deficits, and Federal Reserve mischief hurt the poor while transferring wealth to the already rich. This is the real problem, and raising taxes on those who produce wealth will only make conditions worse.”
The NBC News/Maris poll says most Americans believe the economy is getting better and their financial situation will improve. Unfortunately, there is little evidence to bear this out. So long as the Federal Reserve controls money, the situation will continue to get worse. The solution to income inequality and encroaching rates of poverty is not a tax on the rich. It is abolishing the Federal Reserve and eliminating the control the financial class on Wall Street has over the issuance of money.