The real crisis of the American Economic Depression is the lack of indentification and recognition in the loss of American Taxpaying Worker's spendable income.
As a grandmother at age 60 and a woman that began working to survive at age 13. I would like to address the issue of middle class. First and foremost, middle class is a misnomer. The correct ideology should be American Taxpaying worker. The American taxpaying worker includes all races, all gender, all age, blue collar and white collar areas of definition. The problem with the economy today is two-fold. The main downfall of the economy was the removal of the American taxpaying worker's removal of spendable income. The second downfall of the economy is the lack of industry.
The current President rhetorically and consistently referred to the education, health, and pay standards of America as an industrial nation. I don't know what country President Obama has been living in, or what world, but the United States of America has not been an industrial nation since the Kennedy administration. That is forty years the United States has not been an industrial nation. The United States has been a Service Nation for the past twenty years. We are now close to becoming part of an economic slavery movement into a third world status. Our average salaries have dropped from the industrial era down nearly 15% in the service era. In the meantime, inflation has increased quadruple that amount. On this alone the American taxpaying worker has less spendable income, but there is more information on the reduction of spendable income.
Under the Nixon administration the insurance groups that were non-profit organizations changed into the obscene profit corporations they are today. Before Nixon, insurance groups would take payments from individuals that were placed in community funds and used to pay unexpected health, life, or accident events. The group pool was a boon and aid to the American taxpaying worker. If there was a car accident, the car would be paid off and the insured could purchase a new vehicle without plunging a family into desperation. It was the same with health. If a person had a heart attack or needed a cancer treatment, this pool of funds would pay for the treatment without bankrupting the insured. It was how insurance was supposed to work.
The insurance companies changed quickly when they saw that pooling fund grow. They realized that insurance was a great profit resource. Soon the insurance corporations began making obscene profits and wanted even more at the expense of the insured. The corporations developed out of pocket expense, deductible, and patient portions. The result currently is that insurance corporations now take in trillions of dollars in premiums and only payout millions of dollars. The insured now is basically paying in cash out of pocket what are the actual costs. The health insurance corporations including pharmaceutical insurances are the biggest scam artists of the century. They have subdivided health insurances into finite groups that require even more types of insurance. I believe there will be insuring your foot against athlete's foot because the standard policy does not cover it. The health insurance groups have also dictated what they will pay out. An example is: a doctor charges $100 for an office visit. This visit cost covers the doctor's overhead with a small profit if he sees one patient every hour. The insurance company takes awaythe doctor's patients by an agreement with a corporation unless the doctor signs with the insurance corporation and they say they will only pay $40 and the patient pays $15. The doctor is now reduced to half of what he needs to cover his overhead with a small profit. The doctor now must see two patients an hour. It gets worse for the doctor and the patient. The insurance corporations also sell malpractice insurance and since there were some law suits, all doctors must pay double the insurance rate. The doctor also needs new updated equipment that cost four times as much as it used to cost. The doctor must see six patients in one hour to cover the overhead and make a small profit.
The patient used to get qualified exams for a full hour now only gets a quick and rushed ten minutes. The patient doesn't get proper medical care and is rushed because every minute the patient is away from work, the patient loses money, and the doctor has kept the patient waiting for an hour in the waiting area. The home insurance, boat insurance, car insurance, life insurance, vision insurance, prescription drug insurance, and dental insurance programs all work the same. It is obscene profit for the insurance companies and less spendable income for the American taxpaying worker.
We are insurance poor. When I total up the insurance payments from my check it is 20% of my gross income. My rent is 30%, my groceries are 15%, my utilities are 10%, this leaves 25% of my income payments going to debt payments including paying $5,000 of dental work that was not covered by dental insurance. I include $100 a month I put aside for car repair since my 10 year old car is paid for.
I include Banks as the greatest perpetrator of loss in spendable income. An American taxpayer has no spendable income but feels he and his family deserve to take a vacation and stay awhile with a relative in another state. He puts this vacation on a credit card. The $1,000 he used to pay for the vacation is quickly multiplied to a cost of $1,600 by the time the debt is finally if ever cleared. The banking industry has continued to rob American taxpaying workers of money since the Reagan Administration. The banks prohibit people from saving by charging the clients to save their money even though the banks use the savings for investment that the banks make money on. The banks put out loan contracts that only have the bank protected even though the legal view of a contract requires fair representation and protection of both sides of a contract.
The banks created fees and rates to rid themselves of the burdensome usury laws. The banks and credit card companies have become the most vile and despicable of loan sharks and it is unfortunately legal, thanks the financial protections of Congress by edict of the Federal Reserve Bank. Our financial contracts give the holder the right and privilege of raising and lowering rates at will. How can a debtor pay off a loan he could normally afford to pay off at an interest rate of 3% , but then pay off the loan at 30% when he signed the loan using a strict financial budget at 3%? The $100 loan would have been paid off at $103 is now $130. The debtor did not have the $27 as part of his strict financial budget. This is a small example. The reality is exponential. A $7,000 car would cost $12,000 when paid off, but now costs $18,000 and expected to be paid off in the same amount of time. The car payment of $203 a month balloons to $350 per month. The debtor does not have the $147 dollars a month to meet the payment. The debtor loses the car. The bank resells the car at a profit and still holds the $4,000 the original debtor paid on the car.
The above scenario shows what happened in our collapsed housing market and the upsurge in foreclosures. The government including our new president blames it on greedy arrogant people, and unfortunately President Obama truly believes that the American taxpaying worker is white only and should pay for his greed. The facts show the economic decline of the United States is attributed to the predatory practices and obscene profits of corporations.
To solve our nation's crisis is to quickly cap the profit levels of all corporations. Small industry and cottage industry would not suffer because they usually only make a 25% profit. The corporations that are destroying the American Taxpaying Worker would lose their 1,000 and 5,000 percent profits. This one move would quickly and most certainly fix the economic depression we currently face. Our workers would once again have spendable income and we could rebuild our infrastructure of industry and still keep our marketplace in the global economy.