Paycheck to Paycheck
I ran across an article in dsnews(1) the other day. If you own rental property you have known the theme of the article for some time now. A lot of folks are living paycheck to paycheck. I see it with my tenants, you do also. Slow pay, half now half in another week
I have one tenant that is paying weekly. These are good folks, caught in the “tractor’s nuts”.
Between June 2009, when the recession officially ended, and June 2011, inflation-adjusted median household income fell 6.7 percent, to $49,909, according to a study by two former Census Bureau officials.(2) So what really is going on is Negative REAL Wages.
What’s the FIX?
In my opinion, not what the Fed is committed to at this point. Zero Interest Rates for the next 2 years. Here’s what needs to happen:
Income = to debt service
__________________________ = Equilibrium
Loan Write Downs to = Income
This equation would sustain economic growth.
In other words Household Income Must Rise to meet debt service. The misguided thinking is to pump the Equity markets and that will grow the economy and raise Household wages. But, what do I know I don’t have a PhD from an Ivy League School, just one from the school of hard knocks.
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