Thursday, February 17, 2022

"The Cost Of Living For Middle Class In The United States Is Rising To Absolutely Absurd Levels"

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"The Cost Of Living For Middle Class In 
The United States Is Rising To Absolutely Absurd Levels"
by Epic Economist

"The U.S. middle class is under a lot of pressure. With the cost of living soaring to absurd levels, even those who used to have comfortable lifestyles are now financially struggling. The cost of living has been skyrocketing into the stratosphere, and that has been particularly detrimental to the American middle-class, one of the main pillars of the U.S. economy. The middle class is responsible for the largest share of consumer spending, but ever since inflation has started to accelerate, people’s buying power has been declining at an alarming pace.

Consumer spending is going to continue to cool off as the price of necessities rises above what most people can afford. For example, a new study found that 82.2 percent, or 4 out of 5, new-vehicle buyers were forced to pay well above sticker price in January. The average price paid above sticker was $728. Just two years ago, shoppers would get an average discount of $2,648 when purchasing a new car.

On top of that, it’s getting increasingly more expensive to fuel our vehicles. Just yesterday, the average price of a gallon of gasoline hit a new record high. In California, the new average price of a gallon of gas is $4.72, and experts say a whopping $5 a gallon will likely become the norm in a matter of months, if not sooner. Though the national average of $3.52 a gallon is far lower than California's $4.72, industry executives say that the national price is rising much faster on a percentage basis. Gas prices were up 6% nationwide in just the last month and have jumped 40% over the last year.

In a recent interview, Energy Word founder, Dan Dicker, warned that drivers should brace for another surge in gas prices amid rising global tensions and years of under-investment by the oil industry.“My guess is that you are going to see $5 a gallon at any triple-digit oil prices as soon as you get to $100. And you might get to $6.50 or $7. Forget about $150 a gallon, I don’t know where we will be by then,” he said.

Housing is also increasingly unaffordable. The average price of a newly built home is nearly $19,000 higher due to a massive increase in the price of lumber. To make things worse, heating our homes, which is a major necessity during the winter, is actually becoming a privilege reserve to those who can afford rising heating costs. A new analysis released by the Heartland Institute reported that the typical American family’s home heating costs rose by as much as $1,000 as a result of the government’s energy and environmental policies.

It’s safe to say that most Americans were not prepared for such a dramatic increase in the cost of living. Currently, over 70 percent of Americans are living paycheck to paycheck. And even middle-class workers have been facing major difficulties to make ends meet.

That’s why more and more people are taking on credit card debt to pay for rising living expenses. In fact, according to the New York Fed, “the total US household debt hit $15.8 trillion in the fourth quarter of 2021, after an increase of $333 billion from the previous quarter. Credit card balances alone hit $860 billion, up $52 billion in that same timeframe. That’s the largest quarterly increase the Fed has seen in the 22 years it’s been collecting data,” the researchers say.

This is systematically destroying the U.S. middle class, and that will have enormous consequences for our economy as a whole. Most people had assumed that there would be endless prosperity for many decades to come, but now it is clear that our future is going to be extremely chaotic."

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