Recently, there was an article written in a major publication that discussed the decline in the number of Americans filing bankruptcy in 2012 and its effect on the debt relief industry including the profession of a bankruptcy attorney. The mainstream media continues to pump the economy giving out phony numbers that show only a partial truth. To get a true picture of what's going on in our current economy we need to include all of the economic factors, not removing and add numbers at will to achieve the results that they want us to see. Over the years this has become a standard practice to make the economy look either bad or good for political reasons. An example of that was when recently they added housing to the inflation numbers because everyone knows the price of real estate has gone into the tank. This number was removed early 2000's when housing prices were doubling. The reasoning behind this is if they included the housing number in the early 2000's we would have seen huge inflationary numbers that would force the Fed into increasing interest rates and consequently driving the housing market down. Now, this number is then added because the cost of everything has gone up 40% to 100%. Back in 2008, a gallon of gasoline was about $1.75 and now the nationwide averages over three dollars. Adding this number in will bring down the averages of the inflationary numbers reported to us.
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That's why when the media comes out with the number of Americans filing for bankruptcy and says it decline, while in most circles it sounds like good news, you can bet that the whole story is not being told. When it comes to those filing for bankruptcy, it's pretty hard to cook the books on that number. What we need to really look at is other economic factors to see why the number of Americans using bankruptcy has declined. What's interesting is the debt ratios of the average American continues to rise as the income continues to decline. The consumer debt has now surpassed $2.75 trillion and is continuing to rise. Back in 2010, the US saw a record number of Americans filing for bankruptcy because they had nowhere else to turn. That year we also saw a record number of homes being lost to foreclosure. Around that time, quantitative easing by the Fed started cranking up and banks were being inundated with new money. Consequently, banks started lending once again to the American consumer. Prior to that, available balances were taken away from even those people with good credit. The folks that were lucky enough to make enough money to continue to make ends meet, didn't have to file bankruptcy when their credit dried up. Many others weren't so lucky.
Now that we have turned the page and entered into 2013, the mainstream media would like us to believe that the worst is behind us and everything will now be rosy. To get an idea of what is really going on we need to look at what is keeping the economy moving. There was a recent study done by Patrick Tyrell and William Beach that had some very interesting statistics. In that report that stated that the federal government gives money to 41.3% of the entire population in the United States every month. Added to that, 70% of all federal spending goes to dependence creating programs. With the debt of the US government coming up on $17 trillion, can they really afford to support 128 million Americans every month? The study covered the entitlement programs the government currently funds. First covered was food stamps. Back in 2000, there were only 17 million Americans receiving food stamps. Today, there are 47.5 million receiving benefits. The next program that was looked at was Medicaid. There were more than an unbelievable 70 million Americans receiving Medicaid and Obamacare is expected to add 16 million more to its rolls. After that Social Security has been shown to have more than 53 million Americans receiving benefits and as large numbers of Americans coming of age to receive benefits, this number is expected to explode soon. Lastly, Medicare was looked at and showed that there are currently 50.7 million people on Medicare. This number is expected to grow to 73.2 million by 2025.
If things are getting better, why are so many people receiving government aid? It seems to me, that if you are a bankruptcy attorney, you have nothing to worry about. From the view I am seeing many Americans will still be using bankruptcy for numerous reasons including foreclosure, unemployment and just plain old too much debt and not enough money. People need to open their eyes and do their own research, don't believe what you're told on the news. In this day and age, becoming debt-free has really started to sound pretty good.
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