Households across the United States are living paycheck-to-paycheck and are on the verge of financial collapse. The reason why is because wages are low and stagnant and price inflation is steadily rising. American families are having a difficult time trying to keep up.
According to a report from CBS News, consumer prices have risen more than six percent in the past two years, while food has increased in double digits: chicken has jumped 18.4 percent, ground beef 16.8 percent and bacon 22.8 percent.
In the same time period, median income has only increased one percent each year. Although public officials and mainstream economists say the U.S. economy is doing quite fine, middle-class Americans are the ones facing domestic strife and are realizing the American Dream is difficult to attain in today’s world, particularly due to the unintended consequences of monetary and public policy.
“The disconnect is severe, because it’s the economists that make policy but it’s the people who have to live with the outcome of that policy, and that disconnect is growing to the point where I think it has to break soon,” said ConvergEx market strategist Nick Colas.
Larry Summers, former White House economic adviser, recently wrote in the Financial Times that the U.S. might soon become a “Downtown Abbey economy.” The premise of the show looks at a wealthy British family and its servants at the beginning of the 20th century.
One aspect that must be addressed is the Federal Reserve’s inflation creation. Whenever Janet Yellen, or her predecessor Ben Bernanke, turns on the printing press, it benefits the affluent. As the freshly created money travels through the system, the poor and the middle-class suffer because the money has been devalued. This then leads to price inflation for all kinds of goods and services.
For some reason or another, this is never brought up in the media, government reports or by mainstream economists.