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Sheep to the Slaughter: Americans Raid Savings Accounts to Stay Afloat and Maintain the Dream
Posted By admin On January 19, 2012 @ 3:54 am In Featured Stories,Money Watch | Comments Disabled
January 19, 2012
This article first appeared at SHTFplan.com 
Retail parking lots may be full and Americans may be buying must-have electronics, home decor products and new cars, but where’s all the money coming from?
As we’ve suggested previously , the economic destruction following the collapse of 2008 is slowly, but surely taking its toll, forcing many people still holding on to a paradigm of consumption to dip into cash savings, retirement accounts and personal credit lines:
More than four years after the United States fell into recession, manyAmericans have resorted to raiding their savings to get them through the stop-start economic recovery.
In an ominous sign for America’s economic growth prospects, workers are paring back contributions to college funds and growing numbers are borrowing from their retirement accounts.
Some policymakers worry that a recent spike in credit card usage could mean that people, many of whom are struggling on incomes that have lagged inflation, are taking out new debt just to meet the costs of day-to-day living.
American households “have been spending recently in a way that did not seem in line with income growth. So somehow they’ve been doing that through perhaps additional credit card usage,” Chicago Federal Reserve President Charles Evans said on Friday.
“If they saw future income and employment increasing strongly then that would be reasonable. But I don’t see that. So I’ve been puzzled by this,” he said.
“Today, the saving rate is falling out of necessity. Food and energy prices have risen and folks don’t have as much money to spend on the things that they would like.”
Just as Americans used to borrow against the value of their homes before the property crash, now many are taking out loans from their 401(k) retirement savings plans.
Almost a third of plan participants currently have a loan outstanding, according to an upcoming survey of 150,000 holders of 401(k)s by consulting firm Aon Hewitt.
Source: Reuters 
There’s nothing to be puzzled about here.
There are over 25 million people in this country whose jobs have been destroyed by economic malaise and outsourcing to foreign companies. Monetary easing and other financial machinations have forced the price of essential goods like food, gasoline and life-saving services through the roof.
Americans, still living in a world where we identify ourselves by the products we wear, what we drive and how we entertain ourselves, haven’t yet realized that the consumptive paradigm of the last 30 years is coming to an end. The majority of people, even those going through financial hard times, simply bury their heads in the sand in an effort to avoid the reality that the economy is on a trajectory as bad as, if not worse than, the Great Depression.
But, while they may be making less money – or no money at all – everything is still OK – it has to be – because the Jones family across the street always has the latest gadgets, goes on luxurious weekend getaways, eats out regularly, and they even bought a new car last month. So, if the Joneses can do it, then the economy and financial markets must really be in recovery just like those experts say on television.
On top of that, this is America, the richest nation on Earth, and its managed by the best, brightest, and most benevolent. We may have had a slight down-turn, but those people in Washington and on Wall Street know what they’re doing and they’ll make sure nothing goes wrong again.
Since all of the experts say the recession is over and everything will be returning to normal – including more jobs and regular pay increases – there’s nothing to lose.
Unsuspecting Americans being led, yet again, to financial slaughter (and perhaps worse), are willing to take the experts on their word. They’ll pull money out of their retirement accounts, bank savings account, even take on more debt than ever before, just to stay afloat in anticipation of that job, wage increase and ‘return to normal’ they’ve been promised.
This, of course, is a dream world, but millions upon millions of Americans (and Europeans too), believe that all of the fundamental problems responsible for the global meltdown a few years ago have been resolved. They still have faith in a false paradigm that has already collapsed.
The tragedy of it is that they will spend everything, believe everything they’re told, and do whatever their elected masters tell them, until they are eventually left with nothing. No financial stability. No accumulated wealth. No liberty.
Article printed from Prison Planet.com: http://www.prisonplanet.com
URL to article: http://www.prisonplanet.com/sheep-to-the-slaughter-americans-raid-savings-accounts-to-stay-afloat-and-maintain-the-dream.html
URLs in this post:
 SHTFplan.com: http://www.shtfplan.com/
 suggested previously: http://www.shtfplan.com/headline-news/the-good-news-is-consumer-spending-is-up-the-bad-news-is_11172011
 Reuters: http://www.reuters.com/article/2012/01/17/us-rpt-insight-us-recovery-at-risk-as-am-idUSTRE80G1B420120117
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