Monday, April 16, 2012

Are you better off than you were 4 years ago?

Important information from War On Terror News:

BushWObamaClintonIn 1992, the Nation was recovering from a recession. Few believed it was over, though the experts said it was. The question asked of voters was: "Are you better off now than you were 4 years ago. Statistically, the answer was yes. Wages had grown 21% on top of the 35% they had grown under Reagan. 6.5 Million jobs had been added to the 7.1 Million added under Reagan, but it didn't feel like things were getting better. Inflation had eaten up the increases in income, not by much, but by enough.

In 2012, we face an era of growing inflation. The effects of the first round of Quantitative Easing are reaching the economy. It's a fancy way of saying the Government started printing money. It's a typical 3rd World way of paying interest on the debt of the government, and nearly always results in inflation. If there were only $500,000 in print, you'd have to work many weeks to earn a dollar. If we tripled the number of dollars in print, you'd need to earn (and likely would) $100+k a year, and still not be able to buy as much.

Inflation has already reduced the value of your money by 8.64% (cumulative inflation rate since Jan 2009, excluding the cost of gas). If you made $38,376/year in 2008, you would need to make $41,692/year today, just to break even, before you pay for gas to get to work. If you drive the typical 15,000 miles/year at 25 miles per gallon, the increase in gasoline alone costs you an additional $1,470/year due to an increase of the price $2.45 per gallon. Since that's not included in inflation calculations, you would need to make $43,162/year to equal an income of $38,376 in 2008.

That's an effective inflation rate of 12.5% for the average worker. Since it's tax day, you can figure out for yourself if you've taken a pay cut or not by multiplying your 2008 tax return by 1.125 and comparing that to your 2012 return. If you aren't making 12.5% more, then you have less purchasing power now than you did then. If you worked more hours to make that money, you are making less. Of course, if you make less than the average American worker, the effective inflation rate is higher (and your miles per gallon more likely lower), while if if you make more the burden of fuel increases lowers the percentage rate or real inflation to you....

As the election rhetoric gathers speed, it is imperative that all potential American voters know the FACTS.

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