Financial dependence is a vicious trap.
It kills incentive.
It kills innovation.
It kills the spirit.
It kills achievement.
It kills cultures and societies.
Right now, there are three things Americans are most dependent on. Here is a breakdown of each:
#1: Dependence on the government.
More and more people are relying on the government to take care of them… like a parent taking care of their children. They rely on the government to take care of them from cradle to grave, without contributing anything.
These people live off others, and the government is happy to oblige because it increases their power and control. After all, the money comes from those who work hard and produce, only to be taken by the government in the form of taxation and redistributed to those in political favor.
Most are healthy and can work, but why should they work when they can get everything they want without effort or struggle?
As of 2022, the federal government spends roughly $1.6 trillion on welfare, including $823 billion for Medicaid and $870 billion for other welfare programs. State and local governments spend $1.4 trillion on public welfare, or 22% of total government spending.
Welfare spending accounts for 6.3% of GDP, and it’s growing.
There are over 60 million people in the United States on welfare — That’s approximately 20% of the U.S. population.
And although the amount of welfare received varies from state to state, most states pay more than an $8-per-hour, 40-hours-per-week job. Some states pay even more than that— an equivalent to a $29.13 dollar-an-hour job.
This is killing incentive… Why work if you can get what you need from the government?
It’s also unsustainable… Eventually, you run out of other people’s money.
#2: Dependence on credit cards.
Debt can be a crushing force that has led many people to commit suicide and even lose everything they own.
Right now people are spending money they don’t have because of inflation, the growing recession, personal overspending, using credit instead, and paying off the minimum payments every month… as the balance on the debt rises and the interest also rises.
They’re not cutting back on spending… They’re putting everything on the credit card.
But eventually, the piper must be paid.
Americans have over $887 billion in credit card debt alone – this doesn’t include other debts like student loans, mortgages, etc.
The average unpaid balance on credit cards is $6,569.
54% of credit card accounts carry balances from month to month.
The average APR in 2022 is 16.27% — more if your credit is bad.
For cards accruing interest, the average APR is 18.43%.
For poor credit or first-time credit cards, the ARP is 22.21%.
30-day delinquencies rose from 1.66% to 1.81% in 2022.
It’s getting harder and harder to pay the bills on time, as debt climbs, inflation rises, and people lose their jobs due to the slowing economy.
What happens when most of these people can’t pay their debt?
Remember the economic crash of 2008? We’re due for another one.
#3: Dependence on Parents.
Today, more and more young adults are living off the wealth generated by their parents.
They live in homes that their parents bought.
And they live off the money their parents worked all their lives for…
But eventually, the money will run out and the “kids” will not be able to afford to live in their parents’ homes.
They won’t be able to pay the property taxes or the mortgage… They’re living on borrowed time.
Here are some of the latest statistics:
- According to the U.S. census, over 26 million young adults (18 to 34) live with their parents—that’s 52% of young adults—more than during the Great Depression (at 48%).
- Conversely, due to the failing economy and high inflation, 79 million adults in the United States, or 31.9%, live in a “shared household” with a child or relative.
This has a big impact on the housing market.
A healthy housing market is one major factor in overall economic growth. As the housing market shrinks, it has a negative effect on the economy.
When too many homes go into foreclosure, there will be another housing crash, which will lead to another overall economic crash.
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Read another article here: How the Silicon Valley Bank Collapse Occurred So Fast