Meltdown on Main Street
Posted on July 7th, 2012

Selected Transcript of the Newsmax Broadcast

As you know, the first decade of the 21st century is now behind us.And while it delivered great wealth to a select few, the last 10 years have been a “lost decade” for the average American Family.

As I am speaking with you today, the U.S. stock market is 20% lower than it was 10 years ago.

And when you add up the wealth that was destroyed by the dot-com crash . . . the housing bubble . . . and now the Great Recession, independent investigations reveal that U.S. households have lost more than $25 trillion over the last 10 years.

That’s more than $85,000 for every man, woman, and child in this country.

The baby boomers alone have lost more than a quarter of their collective net worth.

Even the wages that U.S. workers earn at their jobs are declining.

And with less money in our pockets, the American family is faced with rising prices everywhere we turn.

Since 2000, health insurance is up 69% . . . college tuition has doubled . . . food prices are near all-time highs . . . and it now costs 48% more to fill up your tank!

 

 

We might have been feeling the effects just for the last 10 years, but this is a problem that’s been brewing for 40 years. It didn’t strike us overnight.

What happened is that the American economy was growing very rapidly in the 1950s and 1960s, but the government was growing even faster.

Now, you might recall that we were on an international gold standard at that time, but the politicians and the bankers didn’t like that. It restrained them from creating money out of thin air and racking up debt for the programs of Big Government.

So, in 1971, President Nixon broke America’s solemn promise to the world. He ended the international gold standard.

From that point on, the dollar became an “I owe you nothing” and government debt began to skyrocket.

Now, there was no war we couldn’t finance . . . no social program was too expensive . . . and just about every pork barrel project got its funding.

You can clearly see the effects of this, as the dollar has lost about 82% of its purchasing power since 1970.

And it was the beginning of the end for the American middle class.

The very foundation of the American dream is that each generation will go on to live a better life than the last. And that’s how it was in this country for a long time. But when you account for debt and inflation, the American middle class has been falling behind for the last 40 years.

CRAIG:

But production levels and profits have exploded during that time.

Where did all the wealth go?

TOM:

The vast majority of it went to a very small segment of the population “”‚ about 1%.

According to Federal Reserve data, the wealthiest 1% of Americans now have a greater net worth than the bottom 90% combined.

And the disparity is only growing wider . . .

Since 1979, the average income of the top 1% has increased 275%, while average overall wages are basically unchanged.

In the last 10 years, the trend has accelerated even more. Between 2002 and 2006 an astounding 75% of all economic growth was captured by the top 1% of income earners.

And while the average 401(k) lost 25% between 2008 and 2009, the wealthiest 400 Americans became $30 billion richer.

And let me be clear: This disparity in wealth is not because the middle class was less productive.

In fact, due to better technology, higher education, and lots of hard work, the productivity and output of the American people have been rising steadily since the 1940s.

But since about 1971, the average American family has seen almost no financial benefit from their own rising productivity. As inflation went up faster than wages, we started saving less and borrowing more.

If you held your money in cash over the last 10 years, you would have lost 35% of your wealth!

And this is a trend I absolutely see continuing in the years ahead. So for those who follow the herd and invest the way most people do, the answer is yes. Hope will be in short supply.


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