Saturday, May 31, 2014
The top 5 reasons why you're broke
1. Employment and earnings
In all likelihood, you're earning less than the middle-class members of some of the previous generations. A family that earns a median household income of $51,017 today is a fairly accurate representation of a middle class household in the United States. In 1969, a middle-class household earned $54,817 in today's money. In 1979, that number went up to $54,993 in today's money. By 1999, middle-class households were earning $59,758 in today's dollars — more than $8,700 per year more than they are making today.
In addition to the middle class earning less than it did in the past, the recent economic downturn caused a spike in unemployment in 2009, where rates reached 10% in October and then remained at 9% or above for the next 23 months. When there are that many people unable to find a job who are actively looking, many of them end up obtaining low-paying positions for which they are overqualified.
While you're earning less, you're also paying more for the goods and services you purchase. A publication by Daily Finance compares prices between 1999 and 2009. A gallon of gas was $1.30 in 1999, and by 2009, that price went up to $2.56. Today, you pay an average price of $3.65 per gallon at the pump. For a McDonald's Big Mac, you'd shell out $2.50 in 1999 and today, you're looking at an average of around $4.60.
3. Lifestyle and overspending
Consumerism is such a strong ideology in today's society. One estimate indicates that 52% of Americans are spending more than they earn. The Bureau of Labor Statistics' consumer expenditure surveys reflects this sentiment. Annual expenditures exceed income across several locations, income levels, and demographics.
Each time the newest piece of technology hits the market, consumers rush out to purchase it. Wants have turned into perceived necessities, resulting in more spending and less savings.
4. Student loans
In addition to earning less and spending more, you may also begin your career in debt. Starting out behind, it may be difficult to get caught up while paying your loans on top of a home, vehicle, and all of your other expenses. Student loan debt in the U.S. adds up to a combined total of more than $1 trillion.
5. Credit and debt
Interest on revolving lines of credit may result in long-term high monthly payments. The result is you end up paying for a single credit card purchase or series of purchases for several years. As of late 2013, Creditcards.com reports the total revolving debt in the U.S. was around $860 billion, with the average cardholder owning 3.7 credit cards each.
So while you are earning less, spending more, and starting your adult life in debt, you are also borrowing additional funds at high interest rates just to get by – that is why you are broke.
White House press secretary Jay Carney to step down
WASHINGTON -- President Obama said Friday that White House press secretary Jay Carney will be stepping down from his job and be replaced by deputy Josh Earnest.
"It's been an amazing experience," Carney said after Obama's announcement. "Just so fulfilling."
Carney said he will stay on until at least mid-June.
Earnest described his appointment as a "genuine honor," and said he looks forward to pressing the president's "important and beneficial" agenda.
In praising his outgoing press secretary, Obama described Carney as one of his best friends and said he would continue to rely on him as an outside adviser.
Obama described Earnest, his incoming spokesman, as "honest and full of integrity" and "a straight shooter."
Earnest -- "his name describes his demeanor," the president said -- has been an aide to Obama since the early days of his 2008 presidential campaign. "Josh and I have an incredible history going all the way back to the Iowa caucuses," Obama said.
Carney, a former Washington bureau chief for Time magazine, has been White House press secretary since 2011, when he replaced Robert Gibbs. Carney had been communications director for Vice President Biden during the first two years of the Obama administration.
The press secretary's departure drew some political reaction. The National Republican Congressional Committee tweeted: "Tired of talking your way out of too many scandals, #JayCarney? Sign our farewell card."
Carney, who spoke for the White House on items ranging from the death of Osama bin Laden to the current criticism of VA hospitals, said it has been honor to be the president's press secretary.
"I'm not saying it's easy every day, but I love it," Carney said. "It's an important interaction that takes place here ...To be a part of it is an honor and a joy for me."
Carney told reporters he does not know what he will do next. But the former Moscow bureau chief for Time ruled out speculation that he would seem the vacant post of ambassador to Russia.
"I can assure you that my family, having won me back, would not be happy with that outcome," he said.
Spanish Riots, Anguish of Those Recovery Forgot
BARCELONA, Spain — Four nights of rioting here in Spain’s tourism capital have highlighted the country’s persistent social tensions and belied signs of relief from a fragile economic recovery, which has yet to alleviate rampant joblessness.
The rioting started on Monday when Barcelona’s City Hall ordered the eviction of squatters from Can Vies, a warehouse abandoned by the city’s transport authority. The site, in the Sants district, was taken over by squatters 17 years ago and turned into a makeshift social center. City officials said they wanted to reclaim the site for a park.
After attempts to clear the site, protesters threw stones, barricaded streets, smashed bank and shop windows, and set fire to garbage containers and a television van. The rioting has since spread to other parts of the city, and police officers have arrested scores of people.
On Friday, City Hall backed down and said in a statement that plans for the demolition of the site would be halted to help “favor a climate of dialogue.” The squatters nonetheless pledged to continue their protests and to rebuild the half-destroyed center over the weekend.
Joan Maria Solé, deputy director of the Federation of Neighborhood Associations of Barcelona, said the attempt to replace the Can Vies building with “a hypothetical park or green area” showed that City Hall was insensitive to the widening income gap among residents.
Since hosting the Olympic Games in 1992, Barcelona has become one of Europe’s biggest tourism hubs, with a record 7.5 million visitors last year. The rise in tourism has helped Barcelona weather the economic crisis that hit Spain in 2008 better than many cities. Over all, the city of Barcelona’s unemployment rate is nearly 18 percent, roughly 8 percentage points lower than the national average, although there are big discrepancies between the city’s poorest and richest neighborhoods.
“Barcelona is full of contradictions, especially between those who are now unemployed and those who are just focused on earning even more from tourism,” Mr. Solé said. Can Vies, he added, “is unfortunately a more realistic image of Barcelona than the brand City Hall tries to sell.”
The rioting this week echoed similar episodes elsewhere in Spain and in Turkey, where plans by Istanbul’s mayor to redevelop a popular public square set off weeks of protests last year. In January, the Gamonal district of Burgos, in northern Spain, was the scene of prolonged street fighting over plans by City Hall to remodel an avenue and remove many of its free parking spaces at a time of deep cuts in other areas of public spending. The plan was eventually shelved.
Mr. Solé described Can Vies as “something of a symbol for the deprived.” As in Burgos, he added, “it is the kind of spark that can set ablaze a fire that has long been simmering.”
Joan Carles Gallego, the head of the Catalan branch of the Workers’ Commissions, one of the two main trade unions in Spain, said the fighting over Can Vies reflected growing frustration in Barcelona as investors flock back to Spain but unemployment remains nearly 26 percent. Youth unemployment is roughly double that. “The message is that our economy is recovering, but most people aren’t feeling that recovery,” Mr. Gallego said. In the coming months, he warned, “the social conflict could get more radical because people won’t want to be left further behind.”
Alfredo Pastor, an economics professor at the IESE business school in Barcelona, said that “from an outsider’s perspective, the question might be how this has not happened more in a country of 26 percent unemployment.” The problem for Spain, he said, is that “unemployment is likely to be the last part of our economy to recover.”
Three years ago, a youth-led movement took over Puerta del Sol in downtown Madrid, in a giant protest against Spain’s establishment that was a precursor to Occupy Wall Street and similar movements.
While anti-austerity protests have since continued across Spain, they have been on a smaller scale. Still, Podemos, a newly formed political party that has vowed to replace Spain’s established parties, managed to win almost 8 percent of the Spanish vote in elections to the European Parliament last Sunday.
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