Is the economy doing better?

Call me cynical, but I don’t share the Federal Reserve’s optimism about the economy. Unless of course, everyone else got a raise and I was left out of the loop. I concede that October’s employment figures look promising, but what exactly do they represent? The Economic Policy Institute is a non-partisan think tank that promotes a more financially secure middle class. They have an interesting paper, released in October 2004, that addresses the financial realities middle class families are facing. Their findings mirror my experience, everything gets more expensive but there seems to be little change in take home pay.

I have to wonder as interest rates go up how people with large equity lines of credit and credit card bills are going to be able to make minimum monthly payments. Who didn’t take a second mortgage to avoid PMI? I know I did. At this point I am willing to concede that America’s taxation system is fundamentally flawed, but if Bush institutes a flat tax that places an even higher burden on the middle class, and interest rates continue to rise, we will see an exponential increase in the number of middle class Americans declaring personal bankruptcy. I just hope I’m not one of them.