Weakest Economic Recovery on Record Means the Rich Get Richer, the Poor Get Poorer in America

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By Michael Lombardi, MBA for Profit Confidential

130913_PC_lombardiAccording to a study by economists at the University of California, Berkeley, the Paris School of Economics, and Oxford University, the income gap in the U.S. economy in 2012 was similar to what it was in 1920s! (Source: Associated Press, September 10, 2013.)

In 2012, the income of the top one percent of earners increased by almost 20%; for the bottom 99%, their income only increased by one percent.

But that’s not all…

The top 10% of all the income earners in the U.S. economy had more than 48% of all the net earnings in 2012. Going back further, since the Great Recession’s end in June of 2009, 95% of all increases in net earnings in the U.S. economy have gone to the top one percent.

Dear reader, this is not economic growth, it’s just a classic example of the rich getting richer and the poor getting poorer. When a country experiences real economic growth, you will see a steady rise in all incomes.

As I stated earlier, in 2012, almost 50% of all the net earnings went to the top 10%, meaning only 50% went to the bottom 90%. Will this increase consumer spending in the U.S. economy? Of course not. The top 10% can only buy so much and the economy can only go so far on that. For economic growth to happen, you need the middle class to be spending.

What we are witnessing today is the slowest post-recession recovery most living economists have ever experienced. If you take out the rally in stock prices since 2009, there has been no real economic growth.

Auto sales have risen, but auto loans have gone through the roof. (See “Scary Story on the Booming Auto Sales No One Is Talking About.”)

Housing has come back somewhat, but rising interest rates have resulted in a big decline in mortgage applications (the collapsing homebuilder stocks are telling us there’s a problem with the housing recovery).

Retailers from the low end of the market to mid-market are complaining that sales are not growing—their stock prices, a leading indicator, are again trending downward. Retailers are not seeing economic growth in this country.

And the unemployment picture in the U.S. economy remains a problem for economic growth. Add in people who have given up looking for work and those who want full-time jobs but are only able to find part-time work, and the unemployment rate sits at almost 14%—and it’s been there or higher for years now! How can you have economic growth with the unemployment level so high?

As I have written before, the U.S. is headed in the same direction as Europe, where there are only the rich and poor—the middle class no longer exists. You won’t hear politicians talking about this depressing trend, but it’s the doomed road that America is on, and it’s not leading to economic growth.

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Michael Lombardi has been in stock market dealings since his young ages and he bought his first stock at the age of 17. His first investment was not so profitable and this made him research about the factors that affect the market conditions and better ways to invest in the stock market.

After gaining years of experience in this field he felt like helping out investors so that they can invest their hard earned money in better stocks. This led to the establishment of a stock newsletter and alerts service. Newsletters released by him and his suggested stocks have shown excellent response and have been useful and profitable a lot many of investors.

Apart from releasing newsletters, he also has passion in writing about financial investment and providing suggestions to the investors. His articles and press releases are result of years of experience and the analysis that he makes as per the present market conditions. For any suggestion regarding the stock market he can be reached at [email protected]

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