As many reading this may already know, income inequality in America has now
eclipsed the all-time high (at least since the very early 1900's) set in 1928, in our country's lead-up to the Great Depression. But, we're now learning that the downturn in the U.S. housing market is entirely on-track to surpass records set during the Great Depression in coming months, as well:
The "Current Housing Recession is Rivaling the Great Depression's Real Estate Downturn (and) Will Easily Eclipse It In the Coming Months." From George Washington's blog (h/t Zero Hedge), earlier today, Zillow's Stan Humphries
said:
The length and depth of the current housing recession is rivaling the Great Depression's real estate downturn, and, with encouraging signs fading, will easily eclipse it in the coming months.
During the Great Depression, home prices fell 25.9 percent in five years. The U.S. housing market is now down around 25 percent from its peak in 2006.
As housing price expert Robert Shiller pointed out in September 2008:
Home price declines are already approaching those in the Great Depression, when they plunged 30% during the 1930s [i.e. over a 10-year period]. With prices already down almost 20%, it's not a stretch to think we might exceed that drop this time around.
But, while people here in the U.S. may not be reminded of these inconvenient facts, folks elsewhere are reading about what's going on here: "The Nouveau Poor."
The Nouveau Poor
Recession Shadows America's Middle Class
By Marc Pitzke
Spiegel Online
November 10, 2010
American society is breaking apart. Millions of people have lost their jobs and fallen into poverty. Among them, for the first time, are many middle-class families...
--SNIP--
...millions of Americans who, during the recession, tumbled from their idyllic middle-class existence to near-poverty -- or beyond. For many... ...the downfall is a Kafkaesque odyssey, a humiliation hard to comprehend. Help is not in sight: their government and their society have abandoned them.
Wall Street is preoccupied with chasing new profits again. Yet for large sections of the nation, that old myth of working your way up, of bootstrap success and its ultimate prize, homeownership, has evaporated. The middle class, the America's backbone, is crumbling. The American Dream has turned into a nightmare.
As Kossack nathguy just pointed out in: "Wall Street bonuses up massively," and as noted in today's NY Times, Wall Street bonuses are barely missing a beat.
Back to Spiegel...
Last year the US poverty rate reached 14.3 percent, 1.1 percent higher than in 2008. Almost five million Americans skidded below the poverty line ($22,050 annual income for a family of four), many from hitherto sheltered circles, where poverty was a foreign word. The number of long-term unemployed keeps rising. Worst off are families with children. Every fifth child in the US lives in poverty today.
--SNIP--
And nobody seems to care. Poverty wasn't an issue during the midterm elections -- and it won't be an issue now that the spendthrift deficit hawks of the Republican Party have reclaimed the House of Representatives.
"Nothing's going to happen," Curtis Skinner, head of Family Economic Security at the National Center for Children in Poverty (NCCP), told SPIEGEL ONLINE. The political swing to the right, Skinner fears, is "extremely hurtful" and "absolutely disastrous" to the interest of the weakest. Indeed, what Washington is debating now is not more help for the poor -- but extending the former President George W. Bush's tax cuts for the rich.
Congress has returned for its lame-duck session this week, and we're not reading too much about the things that matter for those desperately trying to survive on Main Street right now. As a matter of fact, the folks on Capitol Hill appear to be downright blind to what's going on in and around Main Street these days.
In case you weren't aware of it...
-- 1.2 million Americans are scheduled to lose their unemployment benefits, this month, alone.
-- The public furor over foreclosures is rising, and our government has failed, quite miserably I might add, at making any semblance of a sincere effort when it comes to keeping people in their homes.
-- We're told that a little inflation is a good thing, especially when it comes to our country exporting our way out of this economic mess (but, the facts are that we're, still, only a few billion dollars shy of record-breaking, monthly export deficits, even now); and, if you're in the bottom economic quintile of U.S. society you're already spending HALF of your income on basics, such as food. And, with oil at, or around, $87.50 a barrel heading into the colder months, the poorest 60 million people in our society aren't thinking too much about a job they might be able to get a couple of years down the road, when "things improve." They're a hell of a lot more concerned about surviving (i.e. starving or freezing to death) over the next few months.
So, while Digby notes (SEE: "Fiscal Commission Releases Horrifying Recommendations, Targets Social Security") what everyone was discussing coming from the bowels of the Cat Food Commission's draft report to the President, today, she points out the topics of their cost-cutting focus as far as the oligarchy's plans for the ongoing evisceration of Main Street are concerned:
* Index the retirement age to longevity -- i.e., increase the retirement age to qualify for Social Security -- to age 69 by 2075.
* Index Social Security yearly increases to inflation rather than wages, which will generally mean lower cost of living increases and less money per average recipient.
* "Increase progressivity of benefit formula" -- i.e., means test part of Social Security benefits by 2050.
* Increase the Social Security contribution ceiling: while people only pay Social Security taxes on the first $106,800 of their wages today, that's only about 86% of the total potentially taxable wages. The co-chairs suggest raising the ceiling to capture 90% of wages.
* The co-chairs suggest capping both government expenditures and revenue at 21% of GDP eventually.
* Freeze federal worker wage increases through 2014; eliminate 200,000 federal jobs by 2020; and eliminate 250,000 federal non-defense contractor jobs by 2015.
* Establish co-pays in the VA medical system and change the co-pays and deductibles for military retirees that remain in that system.
* Eliminate NASA funding for commercial space flight.
* Require the Smithsonian museums to start charging entrance fees and raise fees at the national parks.
* Eliminate funding to the Corporation for Public Broadcasting -- which many conservatives suggested in the wake of the firing of former NPR contributor Juan Williams.
* Reduce farm subsidies by $3 billion per year.
--SNIP--
The most amusing thing about this (in a dark and twisted sort of way) is that the Democrats are dying to take credit for it.
--SNIP--
As for real debt reduction, one of the more curious aspects is their odd proposal to drastically cut income taxes and repeal the mortgage income deduction. Supply side is back!
The proposed simplification of the tax code would repeal or modify a number of popular tax breaks -- including the deductibility of mortgage interest payments -- so that income tax rates could be reduced across the board. Under the plan, individual income tax rates would decline to as low as 8 percent on the lowest income bracket (now 10 percent) and to 23 percent on the highest bracket (now 35 percent). The corporate tax rate, now 35 percent, would also be reduced, to as low as 26 percent.
So, what are our nation's legislators and handpicked budget hawks proposing as U.S. income inequality and our country's housing slump now surpass even the depths reached for their respective metrics during the Great Depression of the 1930s? Well, for starters, they want to gut social security and medicare, increase medical costs to our veterans, and drastically diminish the one remaining vestige of a tax benefit as far as homeownership is concerned.
But, as we also learned today, Wall Street isn't missing a meal. For them, things couldn't be better.
Yes, like the folks reading Spiegel Online today, our nation's terminally poor, "nouveau" poor, recently-foreclosed and unemployed aren't having a problem seeing the forest. To them the trees aren't in the way, at all. Yes, as Digby noted earlier today, some Democrats in D.C. are suffering from a new, mutant strain of killer myopia, since they're just dying to take credit for some aspects of this Cat Food Commission report. Meanwhile, folks on Main Street are just dying.