Posted 10 years ago on Oct. 16, 2011, 3:40 p.m. EST by Rico
This content is user submitted and not an official statement
Myth: The American System is a Failure
Truth: Available data shows the system has created unprecedented affluence
Referencing http://tinyurl.com/CensusEconomicData median / mean household income is $50,046 / $68,259, our median / mean family income is $60,609 / $79,338, and 84.5% of us have health insurance (!).
Referencing http://tinyurl.com/CensusHousingData 65.1% of us own our homes while only 34.9% rent. The median value of owner-occupied residences is $179,000, down from a peak of $197,500 in 2008 (only 10% loss). Of the owner occupied homes, only 67.8% have a mortgage, and their median monthly cost is $1496 per month ($17,952 per year). 32.2% of owner occupied homes (21% of all housing !) are owned free and clear with a median monthly cost of $432 ($5,184 per year). The 34.9% of us that rent incur a median month cost of $855 ($10,200 per year).
Referencing http://tinyurl.com/CensusHomeHistory , the percentage of Americans owning their own homes (65.1%) remains greater than any period from 1900 – 1990, and is down only 0.9% from 2000 levels. Furthermore, the value of those homes has only fallen about 10% since the peak in 2008. These figures hardly describe complete collapse. In addition, with 84.5% covered by health insurance, we are hardly suffering from an crisis in health care coverage. Finally, the healthy difference between American income and housing costs in 2011 provides some indication of or substantial level of disposable income. Unfortunately, we've been irresponsible with our income.
Referencing http://www.federalreserve.gov/releases/housedebt/ we see that Americans spent not only their disposable income, but started borrowing at unprecedented levels starting in 2000 to buy foreign made goods. By 2008, fully 20% of disposable income was going toward household debt payments to pay for all those foreign goods. Our purchase of foreign goods produced a trade deficit that averaged 714 billion per year between 2005 and 2008, or $2.1 trillion in total cash outflow over a three year period ( http://tinyurl.com/CensusTradeData ).
The good news/bad news is that Americans finally decided their debt was too high, and they've being spending much of their disposable income to retire that debt. Per http://www.federalreserve.gov/releases/housedebt/ we see that, in only 3 years, Americans have reduced their debt as a portion of income to levels (11%) we haven't seen since 1995 ! That's good, but it also means they are not spending as much of their income buying products, and that creates a problem in the economy.
If banks had acted like our parents, they would not have have let people borrow so much money ! The banks, however, were making a lot of profits lending us that money so why would they be the ones to tell us “NO” ? WE borrowed the money, and WE spent it on foreign goods. Now WE have little money and few jobs.
The American System is NOT a failure. It has created a very affluent society and a standard of living unprecedented in human history. We The People have been irresponsible in our borrowing/spending habits and buying decisions. We DO seem to understand we made a mistake in borrowing so much, and we're retiring our debt at a record pace. We ALSO need to understand we made a mistake in sending so much money overseas, and we need to consider buying some American made products when we start spending again !
Finally, please do not take my message to mean I don't support this movement. I do. See my post at http://occupywallst.org/forum/one-percenter-ready-to-join-if/ . I just think we be more effective if we're armed with facts !