THE WEDGE (CHECKBOOK ECONOMICS)

Some moons ago I started calling common sense economics Checkbook Economics, however , now thinking it needs a more catchy name I will call it the WEDGE which is the simplest tool ever designed by man.  That’s exactly what this economics system is about SIMPLE.

The basic premise  what  can the average family realistically expect on their $46K/yr income.

The blog My Budget 360 lays out item by item what you can do on this budget.

Here http://www.mybudget360.com/how-much-does-the-average-american-make-breaking-down-the-us-household-income-numbers/

What is starkly laid out in the above post is a long ways away from what we are told we should do.

What has prompted me to explore this subject is the repeated media drumming of how screwed up we are and that we have built our own nest and now must lie in it.  Total Bull.  When 50% of the families earn less than 50K they are not going to have health insurance, or a retirement fund or much fun either.  As My Budget 360 says up front you can find fault on a line to line  dissection  of his budget but it does give you a basis to compare your own experiences.  You can plainly see that you are not going to live up to the guidelines given us.  For instance you are not going to save a lot of money, you are not going to have health  insurance, you are not going to have a retirement account and above all you will probably have to work till you drop.

A few articles on where we are actually at in the retirement savings race.

http://www.zero2rich.com/average-retirement-savings.html

http://www.bargaineering.com/articles/average-retirement-savings-by-age.html

About 7% of workers are union members and have retirement programs and some companies do also.  The companies with plans are disappearing rapidly and those that do exist are having benefits lowered .  Is some cases of late companies are just cancelling the retirements they are paying their retirees.  So realistically you are looking at what you will get from Social Security and your meager savings.  Note: Social Security is under attack as we speak.  Before Social Security 80% of seniors lived in poverty and it looks like they are trying to put us back in poverty in the future.

THE WEDGE (SOME BASIC PRINCIPLES)

If you work for wages you are not going to be rich.

Your house is not an investment, it’s merely a place to live.

You will not be able to save a lot of money.

You most likely will not have a college fund for your kids.

Your wife will work.

You will never retire. (unless you work  as a union member)

You will have credit card debt, there’s no way you can avoid it.

You will have to adapt a “Can I afford it by the month”?  attitude. Saving to buy a car, or a house is out of the question.    Doctor and dentist bills are a  waiting terror for every family without insurance.   A trip to the dentist can put you in hock for years.

You will have to figure out what the Rich Folk will let you have and be happy with that.  That is actually not as bad as it seems.  If you can enjoy the simple things in life you’ll be fine.  Only if you keep up with the Johns will you get in trouble.

If your above average in income with your wife working you will average $67.800/yr. Check this chart comparing a 1973 family to today’s family from My Budget 360

This little chart is depressing as hell, it how takes two people working with the same $17K after basic expense, housing, insurance, taxes, cars and daycare.  $17K to do everything else , roughly $1400/mo  dollars to do everything else.  Good luck with that.  This should plainly show you the expectations laid on us by the Media and the Powers That Be are totally unrealistic.

Even if your in the top 15% in wage earnings ($100,000) and you live in a high rent district like California you will barely be making it.  Check out this My Budget 360 post “Going Broke on $100,000/yr.

http://www.mybudget360.com/family-budget-how-to-go-broke-on-100000-a-year-why-the-middle-class-has-a-hard-time-living-in-expensive-urban-areas/

As shown by the budget links provides that there is a long, long way between the median income and the top 15% wage earners.

The single purpose of “THE WEDGE” is to restore your self confidence , you are not as screwed up as the Politicians and the Media make you out to be.  You hear daily how you are responsible for the current financial crisis because you bought a house you couldn’t afford, or you bought those two SUV’s,  or all you do is watch TV and go to the Mall to shop.

The average family was suckered into a huge trap by the housing bubble and easy credit.  You were told hey, just buy this house , look you can afford this low, low payment and in a few years you can flip it or refinance into a more affordable loan, meantime you can take any gained equity out of a Equity Loan and spend it. Alan Greenspan didn’t see any bubble he says and thought that real estate would go up forever.    It’s your money use it.  And then the Merry Go Round stopped and the sky fell.

Meantime back at the DEAR OLE BANK , that screwed you to begin with, they jack your credit card interest up to 30%, change the due date so they can charge you late fees, impose all kinds of fees that didn’t exist before and of course get several million bucks per year in their fat greedy little hands.  The hell of it is , they packaged and sold your mortgage and now they don’t get nailed when you get foreclosed on.

So the bottom line is quite simply this.  Quit believing everything your told about this being your fault.  Sure you bear some of the blame, but you were suckered in.  Plenty of rich guys were suckered along with you, pension funds, investment advisors, foreign buyers of our funny money derivatives .   The Bernie Madoff’s of the world took no prisoners, they screwed everybody , friends and enemies alike.  The average guy was screwed by the biggest crooks of all times,  BANKS.

An old saying comes to mind, DON’T GET PISSED , GET EVEN.

Mike Malloy (a wild eyed talk show host) suggests we just stay home from work.  He figures it will only take one day if we all do it.  It might just work.  Work a day, stay home a day till the changes we need take place.  The hell of this idea is it doesn’t take a big organization, it just takes you and me and somebody to name a starting date.  It’s in our hands , it’s obvious no politician will come to our rescue.  If it’s going to get done, WE HAVE TO DO IT.



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2 Comments on “THE WEDGE (CHECKBOOK ECONOMICS)”


  1. The best is just to open up your own biz and forget about this.

    • The Grey Tiger Says:

      Nothing like missing the point. The average citizen has been made to feel like it’s his fault we are entering into the Second Great Depression. Not everybody can have their own business. Cheap imported goods sold at your friendly Walmart keep you from being price competitive. Only so many burger stands, land scape co, and hardware stores can be locally owned.

      So no I won’t forget about it my purpose is to have you not forget about it. And yeah my wife and I have had a business or two, but that doesn’t pay the bills now, just a few earned retirements all earned by working for wages.


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