Next year is likely to be one of the most pivotal for America in decades, mostly because of where the economy is headed. For Christmas, I put together a list of some of the crazy facts about America's economy - so we can truly understand what's at stake.
Strangely enough, the U.S. economy is chugging along well, albeit at a very anemic rate, and we've been out of a recession for a few years. But it doesn't feel like it because, for most of us, it has been a jobless recovery, with unemployment still in the high single digits.
On Wall Street, corporate profits are at record highs, mostly from cost-cutting, and it's unclear if those profit margins can stay aloft once Europe enters a recession in 2012, which many pundits contend is likely.
And so, on to the fun statistics:
America's gross-debt-to-GDP ratio now totals more than 100 percent - only the second time in U.S. history that has happened (the first time was during World War II). That means we as a nation borrow more than $1 for every $1 of stuff we produce.
While that sounds bad, it's not as bad as some other countries: Japan's debt to GDP is 127 percent, (it's even higher in Greece or Italy), but we are worse off than France and Germany. In short, we still borrow more in dollars than we make and more than we can afford.
That crazy headline is backed up by a BlackRock Investment Institute study showing that our ratio of household debt to personal income is now 154 percent, according to the Economic Collapse blog (www.theeconomiccollapseblog.com).
Median household income has declined 6.8 percent since December 2007 once you account for inflation, according to the Economic Collapse. So if it feels as if your paycheck isn't going as far as it did four years ago, it's not. The Federal Reserve recently announced that the total net worth of U.S. households declined 4.1 percent in the third quarter of 2011 alone.
Why are savings rates low? One out of three Americans, a recent survey found, would not be able to make a mortgage or rent payment if he or she suddenly lost a job.
Health care takes a huge bite out of our take-home pay. According to the Bureau of Economic Analysis, health-care costs in 1980 accounted for 9.5 percent of all personal consumption. Today, health care accounts for about 16.3 percent. Another study found that 41 percent of all working-age Americans either have medical-bill problems or are paying off medical debt. (Invest in health care, drug companies, and device manufacturers - they're making money hand over fist!)
Not only is there a wage gap, but there is an age gap, too. The six heirs of Wal-Mart founder Sam Walton have a net worth that is roughly equal to the bottom 30 percent of all Americans combined. The median net worth for households led by someone age 65 or older is 47 times greater than the median net worth for households led by someone younger than 35, according to an analysis of Census Bureau data done by the Pew Research Center.
Youth is choking on debt: 37 percent of all U.S. households led by someone under age 35 have a net worth of zero or less than zero.
Finally, it's not just individual Americans who will struggle to cut back on debt in 2012. The U.S. government has now accumulated a total debt of $15 trillion, vs. $10.6 trillion when Barack Obama first took office.
During the Obama administration, the government has accumulated more debt than it did from the time George Washington took office to the time Bill Clinton took office. The day of reckoning draws nigh.