As I write this, S&P futures are down 25.50 or 2.13%. The NASDAQ is down 41 (1.87%). The Dow is down 192 (1.68%). This is on top of last week's bloodbath.
Let's just for the sake of argument say that you still have a job, one that pays a living salary, offers health insurance, and even still has a 401(k) match. You've been taking advantage of that match, putting as much as you can into that 401(k), with a good balance of stocks and bonds for your age. You are somewhere between 45 and 57 years old. Let's say you have a house, and you're not underwater because you bought between 1992 and 2004, maybe even earlier. Your house has lost some of its value, but you're still breaking even on it and even have a little equity, becuase when you bought it, you didn't buy more house than you could afford, and whatever updates you've done have been done without equity loans and you've done as much yourself as you could. Maybe you took a small loan right before your oldest graduated high school so you could take your family on a really nice family vacation for the last time, but you paid it back quickly. You drive an older car, get the oil changed regularly, and when something goes wrong you fix it, instead of buying or leasing a new one. Your kids are going to state colleges, or maybe they're starting out at a community college to avoid graduating with a debt the size of a mortgage. When your oldest graduated high school, you managed to find a 10-year-old Civic with 100,000 miles on it that got a clean bill of health from the local mechanic who does your car repairs at a lower cost than the dealer. You've tried, and largely succeeded in living a good middle class life and weathered some rough economic times. You and your kids didn't get everything you wanted when you wanted it, but you live pretty well, you're self-sufficient, and you thought you were prepared for whatever the future held.
Politically, you regard yourself as an independent. If someone asks, you say you vote for the candidate, not the party. But for the most part, you don't pay a lot of attention to politics. You're just too busy working and running around all over the place for your kids that are still at home. You have a vague sense that the system isn't working but you really don't have time to care all that much.
You've been a responsible adult, one who lives pretty well but also prepares for unforseen circumstances -- the baseball that the kids hit through your front window, the water heater that blew on a Sunday, the fender-bender in the supermarket parking lot, the trip to the emergency room when your youngest got bitten by a feral kitten he'd been playing with.
You're hoping to be able to keep your job until you retire, and you've figured that if you can do that, you should be reasonably well set. You don't think much about Social Security because you've been hearing for three decades of its imminent demise so you've worked your savings plan around the possibility that it won't be there. You haven't put away as much as you should, but you think you'll be OK when the time comes -- when you even think about it, which isn't very often.
What you didn't prepare for was for the government of this country to be taken up by a bunch if moronic, ignorant, lickspittle fanatics. You didn't prepare for the 46" flatscreen TV that waited till the price came down to buy feeding out into the ether a constant drumbeat of Tea Party nonsense being presented by so-called sober news people as being a viewpoint equal to demonstrable fact. You didn't prepare for the greed that you always knew was part of the executive suite to complete devour the entire economy. And with everything you've heard about a diversified portfolio of stocks and bonds that usually return around 6-10% a year, you've figured that the money you put into your 401(k) would only grow.
Welcome to your rude awakening, folks, because thanks to our Tea Party friends, you're going tp send the next week watching your best-laid plans disappear.
Oh, wait. Since I started writing this, the futures have changed. Dow futures are now down 280 (2.46%), the S&P is down 31.70, and the NASDAQ is down 56.
People like the one I've described above have been laboring under the delusion that because THEY haven't made the same mistakes that have driven others out of the middle class into poverty, it can't happen to them. They can't understand why Verizon workers went on strike
yesterday against a company that made $2.5 billion in profits last year
and whose CEO scored a cool $18.1 million in compensation
to try to save their benefits. After all, who of us even HAS a defined benefit pension anymore? And while our theoretical middle-class person above is busy shaking his head at teachers and firefighters and the IBEW, the life he's built has been slowly being pulled out from under him. And by the way, the "secure" job our theoretical middle class person has is going to be at risk the minute his employer, reeling from the drop in the company's stock as part of this bloodbath, decides to jettison a few tens of thousands of people in order to cut costs.
I could post that George Carlin video again, but what would be the point? Those who already get what is happening to the middle class in this country don't need to see it again, and the ones who don't, who are still blaming liberals and gays and abortion and the New Deal and blacks and poor people aren't reading this blog anyway.
So fasten your seat belts, folks...because even though S&P made a $2 trillion error in calculating long-term deficits, its decision to side with the teabaggers
means that you and your long-term future are totally and utterly screwed.
Labels: economic death watch