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Turn Out The Lights – The Party Is Over: 20 Signs That American Consumers Are Completely And Totally Tapped Out

Many economists have been mystified that even though the recession is “over”, American consumers have not opened their wallets and started spending again like they normally do at the end of a recession.  News report after news report has encouraged Americans to grab their credit cards and to head out to the stores and start spending again, but it just is not happening.  So why are things different this time?  Well, for one thing there is a lot of fear in the air.  Poll after poll after poll shows that faith in the economy has collapsed and that large numbers of Americans fear that things are going to get even worse for the economy soon.  But for millions of other Americans there is another problem – they couldn’t spend more money if they wanted to.  The truth is that living on credit for decades has caught up with us as a nation.  Americans are absolutely drowning in mortgage debt, car loans, credit card debt and student loan debt.  As wages have stagnated, credit has enabled many of us to pursue the American Dream and to live far beyond our means, but that doesn’t last forever.  Now tens of millions of Americans are completely and totally tapped out.  But without the return of the voracious American “consumer” there is not going to be a full economic “recovery”.

For decades, the American consumer has always returned with a vengeance.  Continually expanding debt loads have fueled a level of prosperity that most of humanity only dreams of.  But unfortunately, no debt bubble lasts forever. 

Now the consumer debt bubble in America has started to pop, and many are wondering what is going to fuel the U.S. economy if American consumers are unwilling or unable to do it any longer.

The truth is that a very large percentage of Americans consumers is either incredibly scared or totally broke or both.  Many economists and politicians are desperately hoping that we can crank up the consumer debt spiral one more time, but tens of millions of Americans are already in debt up to their eyeballs.  The reality is that you just can’t squeeze blood out of a rock.

But that doesn’t mean that the politicians running for office in November won’t try to convince us that this thing can be fixed if we will just elect them and their buddies.  We will be told that the right combination of tax cuts and/or government spending programs will get us on the right track.

Sadly, though, the U.S. government and our state and local governments are all drowning in debt too.  There is not much more they can do for the economy.  Even the Federal Reserve is about out of ammunition at this point.

The truth is that the U.S. economy is a dead horse and it just does not want to get up and start running once again.  You can only push a debt bubble so far, and it looks like we may have reached our limit.

The following are 20 signs that American consumers are completely and totally tapped out at this point….

#1 During the first quarter of 2010, the number of loans that were at least three months past due in the United States increased for the 16th quarter in a row.

#2 Vacancies and lease rates at shopping centers across America continued to get worse during the second quarter of 2010.

#3 One out of every seven mortgages was either delinquent or in foreclosure during the first quarter of 2010.

#4 CNBC is reporting that the nation’s banks repossessed a record number of homes in August.

#5 According to RealtyTrac, a total of 1.65 million U.S. properties received foreclosure filings during the first half of 2010.

#6 23 percent of all U.S. homes with a mortgage were “underwater” as of the end of June.  That means that the “home equity boom” is officially over.

#7 Existing home sales fell 27 percent during the month of July, and new home sales declined to the lowest level ever recorded in the same month.

#8 Construction of new homes in the U.S. and applications to build new homes in the U.S. both fell to their lowest levels in more than a year during the month of July.

#9 Americans now owe more than $849 billion on student loans.  That is a new all-time record.

#10 According to data that was just released, the number of U.S. college students who defaulted on their student loans increased significantly in the fiscal year that ended in September 2008.

#11 Bankruptcy filings in the United States increased 20 percent during the twelve month period ending June 30th.

#12 In all, a total of nearly 3 million Americans declared bankruptcy over the last two years.

#13 A staggering 25 percent of Americans now have a credit score below 599.  Without good credit, these consumers will not be buying much of anything.

#14 According to Gallup, confidence in the economy is way, way down compared to to the same period last year.

#15 According to a poll taken in 2009, 61 percent of Americans “always or usually” live paycheck to paycheck.  That was up substantially from 49 percent in 2008 and 43 percent in 2007.

#16 The number of Americans in the food stamp program passed the 41 million mark for the first time ever in June.

#17 As of June, the number of Americans on food stamps had set a new all-time record for 19 months in a row.

#18 One out of every six Americans is now enrolled in at least one anti-poverty program run by the federal government.

#19 In all, a total of about 45 million Americans were living in poverty during 2009.

#20 According to the Department of Housing and Urban Development, the number of U.S. families with children living in homeless shelters increased from 131,000 to 170,000 between 2007 and 2009.

  • Owen

    Even in the best of times, consumer demand is strongly linked to stage of life. We are an aging society and I suspect it’s because the boomers (and even later age groups as well) were so fond of aborting all those little inconviences of life. Old consumers like meyself pretty much have just about anything we need. Other than healthcare and eating out, us oldtimers do not do a whole lot to fuel consumer demand. In a perfect world (Congress actually did its job and the President abided by the Constitution), all those little darlings our nation so blithely aborted would now be in that stage of life that is most useful for driving consumer demand… May God forgive us for such stupidity!

  • concerned Reader

    I agree with this article, but if you go to malls or major retailers like Wal-mart you see hundreds of people in there shopping all the time. I understand that the spending power of the American consumer has diminished, but go check out some of these retailers and see for yourself.

    Since the 1980s wages have slowly stagnated against inflation. This stagnation was mainly brought on by the mass exodus of jobs being off shored to over seas nations where the labor is much cheaper. The 1980s also saw the introduction of the credit card into the consumer masses and for the first time poor people, or low income, were eligable for credit. Credit cards were handed out like candy because paper money had lost its value in society and all consumers, both middle class and lower class, helped turn the 1990s into a boom town with their credit backed spending habits.

    Then in the 1990s, Alan Greenspan and Bill “Horny Toad” Clinton introduced the home equity loan. This loan basically allowed people of all income brackets to put up the most valuable asset at their disposal, their home, for a line of credit. Their home was put up for collatoral and the banks alloted the borrower a certain amount of money based on their own idea of what the house is worth.

    These home equity loans and credit cards helped the American people spend more money that they could have done alone with money. People took out massive loans to buy consumer goods, cars, motorcycles, speed boats and jet skies, college tuition and countless other things. During this time major retailers off shored their work force to over seas factories while the American people used credit, or fake money, to basically help the retailers get big and strong. The 1990s was the boom time for Wal-mart.

    In the 2000s, consumer spending and credit borrowing were still going strong. Then along came the dot.com bubble and eventually 9/11. These two incidentcies were critical in shaking the economy loose enough that the poison of hte over extension of credit would start to seep out onto the service. Afterwards, President Bush encouraged Americans to continue to go out and spend like mad(Disney Land?). Of course by this point the vast majority of Americans had zero savings.

    By the 2000s, however, the consequences of the over extension of credit, home equities and the variable interest rate almost crippled the world’s strongest economy and the entire world. What had happened is that the banks administered out too much credit and thanks to the variable interest rates, no one had enough money to pay the banks back. Since the banks could not be paid back, many of them went under and many of them are still going under as we speak.

    To summarize everything, without good paying, high waged jobs, the economy is only going to gey worse. If the American people had more spending power, they could turn this debacle around, but unless jobs return to this country, retailers are going to go under in mass droves. Wal-mart is too strong to under unless there is a total financial collapse, but I do for see retailers like K-Mart, Meijers, Best Buy, various smaller retails, and maybe Target before all of this is over.

  • Greg

    Amen Owen. I first stated 20 years ago to a woman picketing for the right to murder babies that we baby boomers who brought in the legal death sentence for millions of babies were going to be aborted by the same generation of babies we were slaughtering. That statement stopped her from chanting her right-to-murder nonsense but she kept her sign in the air. There are many things we need God’s forgiveness for but unfortunately we are not repenting but instead are adding to the atrocities daily.

  • bro43

    This is the result of monopolized fiat currency, any other excuse is a scapegoat to obscure the real problem, The Federal Reserve. And how some people tie abortion to this is beyond my intellectual scope. Hah, I guess it’s the product of our state-controlled educational system.

  • Gary

    Again-Tax the rich and spread the wealth! Tax the rich HARD-91%

    lots of wealth to spread then.

    This WILL solve these issues.

  • Owen

    It’ just basic economics, bro, supply and demand. Shrink the population at the wrong stage of life and demand curves dip below the supply curves. For example, look at social security. It will work if the older retired group is smaller than the younger actively working group. Normally, a large-sized generation begets an even larger generation. Abortion proved to be very significant factor in our current situation. IMHO, abortion will prove to be just one of the prongs in a multi-pronged assault on the human race by the same guilty parties that gave us the fiat currency (which is being purposely destroyed to usher in a cashless global society). Expect more wars (including the real mother of all wars), more famines, and more plagues. The handwriting is already on the wall, and more importantly, in the Word of God.

  • Stray Cat

    Since the majority of people refuse to return to the God that created them, the only remaining solution is to bend over, grab the ankles in a firm grip and kiss your ass GOODBYE.

  • james

    Well its good to see 40 years of abortion and the sex revolution is paying off.

  • Danny

    I really doubt SO many babies were aborted that it is now resulting in the collapse of our economy. No, the economy seems to be systematically taken apart. I’m not “into” abortion, but c’mon. These pro-life types will blame ANYTHING and EVERYTHING on abortion. This is being done on PURPOSE. The middle class is being destroyed intentionally. Until we can face the real people causing this, the real reasons we are where we are at, and stop being distracted by abortions and gay marriage and illegal aliens, we are doomed. And ya know what, I’m starting to think we all deserve this.