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Dramatic Fall in Living Standards
One year ago,
Plain Truth
Editor Herbert W. Armstrong
wrote "Prepare to Great/y
Reduce Your Standard ofLiv–
ing!" The prediction was right
on target- 1980 has seen an
incredi,ble fa// in living stan–
dards. What was behind such
an accurate prediction?
by
Jeft Calkins
N
INETEEN EIGHTY- the
50th a nnive rsary of the
first full year of the Great
Depression- was an incredible–
an incredibly bad- year!
The economic world went cra–
zy. Gold approached U.S . $900
an ounce before receding. S ilver
carne near U.S. $50 an ounce–
and then the bubble burst, wiping
out billions in paper profits. 1nfla–
tion reached unheard-of Ievels in
the United States- 18 percent–
and remains in a disastrous 1
O
percent range. lnteres t rates hit
20 percent- another sign of eco–
nomic madness.
The outcome: 1980 saw a dra–
matic fa ll in the real income of
the average person, just as
Plain
Truth
Editor Herbert W . Arm–
strong predicted in the J anuary,
1980, U.S. issue.
Statlstl cs Conflrm
The raw figures show that living
standards have plummeted .
According to the U.S. Labor
Department , the average (me–
dian) income of families in the
United States rose in the neigh–
borhood of 8 percent. But the
cost o f living for the same period,
March, 1979, to March, 1980,
went up to 13.3 percent. For the
period June, 1979, to June, 1980,
the stat istics were even worse.
Average nonfarm workers pay
rose only 6.4 percent- but infla–
tion in the same period was a
whopping 14.3 percent. In other
words, almost an 8 percent drop
in living standards.
The drop in living sta ndards is
January 1981
best illustrated in housing costs.
Skyrocketing in terest rates have
made monthly housing payments
of U.S. $700 to $ 1,000 a month
not uncommon. Over t he last
decade, the percent of disposable
income spent on housing by the
average worker has doubled.
Bar e Stats and Real Paln
But the statistics don't tell the
personal side of the s tory. Living
standards have dropped in
real,
tangible ways.
A CBS 'News-New York
Times
poli reveals jus t how much
the average family cut back their
standards recently:
• 80 percent of those polled
have cut back on the amount of
gasoline they use.
• 86 percent lowered the heat
in their bornes last winter.
• 54 percent have cut back on
the quality of food they buy.
• 66 percent have cut back on
vacations.
• 44 percent have someone in
the family who is supplement ing
the family income by working
longer hours or getting a second
job.
But the inflation of the pas t
year has taken a devastating toll
on the poor. The National Advi–
sory Council on Economic Op–
portuni ty estimates that house–
holds in the lowest
1O
percent
income tax bracket are spending
nearly a fifth more of their a fter–
tax income
than they have–
actually going into the hole- to
pay for food , shelter, energy and
health.
The cur rent inflation has hit
the poor hard because it is the
price of necessities that have gone
up the most. The worst inflated
arcas are heat, medica) care, gas–
oline and food .
Worst of All Possible Worlds
The best indicator of how the
economy is doing in the present is
the "misery index." The misery
index is the inflation rate plus the
unemployment rate. 1n 1980, the
misery index hit 20. Four years
earl ier, it had been 12.5.
In 1980, as unemployment ap–
proached 8 percent, infl ation set–
tled to a
base
of 1
O
percent, often
going much higher.
Of course, economic conditions
were getting worse befa re 1980.
In 1979, the average weekly earn–
ings of the average worker- his
real standard of living-also de–
clined by more than 8 percent.
And because of a combination
of inflation- pushing worke rs
into higher tax brackets-and
higher social security taxes, the
typical married worker with two
c hildren and a nonsupervisory
nongovernment job had seen his ·
real standard of living go down by
6 percent over the past decade. In
the past three years, there has
been no gain at all in living stan–
dards for the average worker.
Prop hesled for the U.S.A.
A survey this year by the Univer–
si ty of Michigan Survey Research
Center revealed that consumer
att it udes toward their economic
future hit the lowest on record
since 1946. Such gloom reflected
the atrocious state of affairs in
the economy.
Bu~
why? Are mere economic
factors the only reason for all the
bad news?
Lis ten to what Herbert W .
Armstrong wrote
before
the be–
g inning of this incredible year:
"And now, FOR OUR OWN
GOOD, an all-wise and all-loving
God is a bout to PUN ISH our
nat ions, in order fi nally to bring
us to
H1M!"
More than mere economic fac–
tors were at work in making 1980 a
disastrous year economical ly! Di–
vine punishment must be included.
The special reasons for this
punishment are laid bare in our
handsome so.ft -:cover book
The
United States and Britain in
Prophecy.
lts price hasn't inflated
one bit in all the years we've been
publis hi'ng it-it is still
f ree.
Write for you r copy.
o
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