Everyone knows that the United States is bleeding jobs. According to one new study, the private sector in the United States has lost 10.5 million jobs since 2007. The U.S. economy lost 125,000 more jobs during the month of June. Approximately a million frustrated American workers have simply dropped out of the employment market altogether over the past two months. But the question not enough people are asking is why so many jobs are being lost. Yes, the large global corporations have been sending millions of jobs overseas where labor is far, far cheaper. And yes, the U.S. government has accumulated so much debt that it is absolutely suffocating the U.S. economy. But there is another very important factor that has been largely overlooked. Traditionally, about 75 percent of all new jobs are created by small businesses. But today, hundreds of thousands of small businesses are being strangled out of existence by all of the oppressive taxes, fees, rules, regulations, paperwork and demands that government keeps imposing on them. In such a repressive environment, it is getting close to impossible for small businesses to thrive, and if our small businesses can’t succeed, then we simply are not going to see a lot of jobs being created.
You see, the truth is that over the past several decades the game has become dramatically stacked in favor of large businesses. Big corporations have the money to lobby Congress and other governmental institutions, they get almost all the tax breaks and they are the only ones who get bailouts. They even “help” write legislation on the federal level.
Many times large corporations will even lobby for more regulations for their own industry because they know that they can handle all of the rules and paperwork far easier than their smaller competitors can. After all, a large corporation with an accounting department can easily handle filling out a few thousand more forms, but for a small business with only a handful of employees that kind of paperwork is a major logistical nightmare.
When it comes to hiring new employees, the federal government has made the process so complicated and so expensive for small businesses that it is hardly worth it anymore. Things have gotten so bad that more small businesses than ever are only hiring part-time workers or independent contractors.
So what we actually have now is a situation where small businesses have lots of incentives not to hire more workers, and if they really do need some extra help the rules make it much more profitable to do whatever you can to keep from bringing people on as full-time employees.
Can the U.S. economy thrive in such an environment?
Of course not.
Small businesses are slowly being strangled out of existence.
Unless something changes quickly, small businesses are going to continue looking for ways to shed employees rather than hire them.
The U.S. government has become like the 500 pound fat guy who jumps on a horse and then gets angry when it won’t move.
Passing even more ridiculous regulations and raising taxes even higher is not going to fix business in America.
The burdens we have placed on our small businesses have gotten worse under every single presidential administration of the past several decades. Now our great economic machine has become so overburdened and so tired that it is simply refusing to move.
And this is not a short-term problem either. Yes, we have lost a ton of jobs since the beginning of the “Great Recession”, but our problems go back a lot farther than that. The reality is that the U.S. population has grown by about 25 million people since they year 2000, and we needed to create millions upon millions of new jobs to support that increased population. Instead, we have lost a total of 3 million jobs since 2000.
Needless to say, that is not a good trend.
There are simply not enough jobs for everyone.
Today, there are more than 5 unemployed Americans for every single job opening.
It is becoming harder and harder to find a job, and the number of Americans who are chronically unemployed is absolutely exploding.
In America today, the average time needed to find a job has risen to a record 35.2 weeks.
There are millions of Americans out there tonight who feel like punching the walls or drinking themselves under the table out of frustration because they can’t find a job.
And many of those who are “chronically unemployed” are about to experience even more pain.
So far, the U.S. Senate has refused to extend long-term unemployment benefits for about 1.3 million Americans. Without this assistance, these Americans and their families will be forced to survive on food stamps and whatever else they can scrape together.
The tent cities that are popping up all over the United States are about to get a lot more crowded.
So is there much hope that this is going to turn around any time soon?
Unfortunately, no.
Big corporations are not going to pay U.S. workers ten times more money than what they are paying employees in Malaysia, China or the Philippines just because they feel sorry for them.
Small businesses are not going to hire a lot more workers as long as things stay the way that they are. In fact, many small businesses are going to continue to look for ways to cut employees.
The public sector is the one place that had been hiring more workers, but due to growing concern about exploding budget deficits, there isn’t going to be a lot of additional hiring in the public sector either.
The truth is that there is not a lot of reason for optimism right now. The U.S. economy is being battered by a host of economic problems, and with each passing week even more economists warn that we are likely headed for the second half of a double-dip recession.
So if you still have a job, be thankful. If you don’t have a job, you are probably going to have to get really creative.
Times are tough and they are going to get even tougher. But it is in the midst of challenging times that we find out who we really are.
There are quite a few U.S. cities that are complete and utter economic disaster zones in 2010 (Detroit for example), but there is something about the demise of Las Vegas that is absolutely stunning. In recent decades, Las Vegas has become a symbol for the over-the-top affluence and decadence of America. But now it is a microcosm of the economic nightmare that has gripped the entire nation. When the subprime mortgage crisis stuck, no major U.S. city was more devastated than Las Vegas. When the recession went from bad to worse, Americans decided that they really didn’t need to gamble so much and casino revenues plummeted. Suddenly unemployment started to increase dramatically in Vegas and even today it continues to soar. Like so many other cities that are highly dependent on tourism and entertainment, Las Vegas has gone from boom to bust. Local officials are hoping that the worst will soon be over, but the truth is that the worst is yet to come. As the U.S. economy continues to unravel, average Americans will be spending what little money they do have to put a roof over their heads and to feed their families. The truth is that the glory days of Las Vegas are over and they are not coming back.
Already, the number of unemployed in Las Vegas is reaching unprecedented levels. Unemployment rates for the state of Nevada and for the city of Las Vegas both set new records during the month of April. In Las Vegas the unemployment rate in April was 14.2%. For the entire state the unemployment rate was 13.7%.
Of course those are just the “official” numbers. We all know that the “real” unemployment numbers are much higher.
For example, the “official” unemployment figure is about 14 percent in the state of Michigan right now. But if you actually believe that 86 percent of able-bodied workers in the state of Michigan are employed, then perhaps you would be interested in an offer to purchase the Golden Gate Bridge as well.
Elliott Parker, an economist at the University of Nevada, Reno says that the record-setting unemployment numbers in Nevada are just part of a larger trend….
“Nevada has been losing jobs since March 2008, and we are continuing to do so.”
But where the state of Nevada and the city of Las Vegas have really been hammered is in the housing industry.
It is estimated that a whopping 65 percent of all homes in the state of Nevada are underwater.
Let that sink in for a bit.
65 percent of all home owners with a mortgage in the state of Nevada owe more than their homes are worth.
Talk about an implosion.
Nationally, the number of homes that are “underwater” is about 24 percent. That is an all-time record for the entire nation, but it doesn’t come anywhere close to the nightmare that is unfolding in Nevada and in Las Vegas.
And the number of foreclosures taking place in Nevada is absolutely breathtaking.
According to RealtyTrac, Nevada is still ranked number one for foreclosure filings. In fact, one out of every 79 Nevada homes received a foreclosure filing in the month of May alone.
Nevada’s foreclosure rate is now five times the national average.
By just about any measure, the economy of Nevada is a complete and total disaster.
A reader recently sent an email describing the economic horror that is unfolding in Las Vegas. No matter what you may think about the city, the truth is that it is sad to see any great U.S. city fall to pieces like this….
“Las Vegas is a goner. The homeless population is out of control. The real estate is far worse than I have seen in the media (no surprise there). The towers of condos are ninety five percent vacant with zero activity. The streets and parks are in decline. Local governments are busy making cuts and fighting unions. When I ride the streets they are deserted, a big change from 2006. The major casino companies have all but moved the casinos out of Nevada. Rooms and restaurants have been closing for years, even while they finished the new projects. The entire town is a skeleton staff providing substandard service and decaying properties. I still work for one of the majors which is in bankruptcy. When the next wave hits there is nowhere to cut. It will be a game of dominoes with the Wynn properties the only ones left standing. I see the ninety nine cent breakfast making a comeback. The bullet train a day late and a few billion dollars short.”
So is there any hope for Las Vegas?
Well, if the U.S. economy gets back up off of the operating table and roars back to life there is little doubt that millions of Americans would once again soon be flying there to gamble away their discretionary income.
But the truth is that any “revival” that is going to happen in Vegas is going to be very short-lived.
The U.S. economy as a whole is caught in a death spiral, and we are about to see a repeat of the housing crash that devastated Las Vegas so badly the first time around.
No, there really isn’t any way that the death of Las Vegas can be avoided. Just like the U.S. economy as a whole, it is inevitably doomed. The numbers don’t lie.
The grand total of all government, corporate and consumer debt in the United States is now equal to 360 percent of GDP. That is a far greater level than the U.S. ever approached during the Great Depression.
The entire U.S. economy is a house of cards built on a gigantic pile of debt and paper money, and it is only a matter of time until it all comes crashing down.
But of course that isn’t stopping the U.S. government from spending even more money and getting us all into even more debt.
But as many of you who have experienced this on a personal level know, getting into continually increasing amounts of debt never ends well.
So do any of you have a tale to tell about the city where you live? Do you find yourself caught in the middle of an economic nightmare? Feel free to leave a comment telling us what is happening in your area of the United States….
****UPDATE****
A number of readers have chimed in with some very insightful comments. A sampling is below….
Vegas Bob:
I lived here in Vegas from 1998-2006 and moved back at the beginning of 2010. I worked in Corporate Finance for one of the largest casino operators up until I retired.
The article is spot on. Compared to its heyday in 2005-2006, Las Vegas today is an economic disaster zone. The condo I sold in 2006 for $172,500 now goes for $48,900 – a 72% haircut.
It’s not getting any better. Real estate prices are resuming their descent, now that the $8,000 homebuyer tax bribe is gone.
The so-called economic recovery is for wealthy people only. Everyday people just keep getting the shaft. Obama is just another Republican with a ‘D’ after his name.
I’m glad I was smart enough to rent a place instead of buying one. I’m getting the hell out of this hellhole when my lease is up at year-end.
Tiara:
I am born and raised Vegas. When I say I was raised in Vegas I don’t mean a casino. I mean the middle of the dessert 30 miles north from the strip with the lizards and tumbleweeds. Vegas and I have a love hate relationship. I have seen this the growth in this town blow up in my face and now it is imploding just like an old worn out casino. It has been a crazy ride but due to the economy I will most likely be leaving Las Vegas soon. Growing up in this town has been interesting and leaving it will be bittersweet.
Craig:
I lived in vegas in 2006 and have been back to visit many times. I was there recently for the first time after the economy imploded in late 2008—That town is a shell of it’s former self.
On any given night there are half the people on the strip that there used to be. The service even in the 5-star hotels has declined. You can see the lack of morale, sucked from the faces of the wokrers.
I loved this town in its hay day. Right now, it’s pretty sad.
Dolly:
Vegas was, and is, easy to understand. I’m in the musical equipment business– audio– and we go to Trade Shows.
These are held all over the world, but let’s contrast just two places, Los Angeles and Vegas:
If you go to Los Angeles, you will visit with the worlds best engineering talent, and a solidly-grounded people that are there to PRODUCE something OF VALUE. You have small manufacturers, Farm and Ranch people, Oil people, the film industry and plenty of unspoiled, honest, clean-living young people who work hard, and then play hard. Many are Surfers, etc., and are a breath of Fresh Air.
In short, a business convention or trade show in this city is a TREAT.
Now, let’s look at Las Vegas. Everything that’s big there is built around money manipulation and power. No one gives a damn about anybody else. Got a brilliant idea? One that Los Angelinos would want to encourage you to develop and succeed at? NOT in Vegas! Any Casino in town handles more money than that in a microsecond. Besides– who are YOU? YOU don’t matter. Vegas gets all the big shows and all the big stuff– so YOU DON’T COUNT.
Want to hold a convention in a DECENT CITY– say L.A., or Denver? SORRY– Vegas will move right in– bribe the show principals and it WILL be held in Vegas. Look at what happened to the National Finals Rodeo– Oklahoma City was GREAT, but VEGAS has STOLEN it.
Vegas deserves the worst that can happen to it– GOOD RIDDANCE!
Bob:
LV was built by losers. I’ve lived in & near LV since ‘89, watched it grow cancerously, and now the tumor is shrinking… good riddance indeed to a grand delusion. This city is not electrified by the dam — it is fed with coal-generated power from Moapa. Fake Lake Mead is dying too ( and the city is fed by one old pipeline that can break down at any time … There is no primary industry here, just gambling and military — everyone here (except me, of course ) is living the Big Lie. The place is a death trap… stay away!
BD:
I recently went back to visit my old neighborhood (moved out of vegas and sold my house in summer of ‘08) and talked with a few of my neighbors. Apparently its so bad they dont even park their cars on the streets anymore because “these damn people siphon gas out of your gas tank”. No lie. And this is a nice gated neighborhood in Henderson….
Perhaps the greatest victims of the economic nightmare that is unfolding right in front of our eyes are our children. The overall economic numbers are really bad, but when you examine the impact that this economy is having on children things get really horrifying. Today, 1 in 5 American children live in poverty and 1 in 4 American children are on food stamps. Experts tell us that about 50 percent of all U.S. children will be on food stamps at some point before they reach the age of 18. Up to half a million American children are homeless even as you read this. And yet we continue to insist that we are the wealthiest nation in the world. Well, if we are so wealthy, then why are so many millions of our children suffering so desperately?
Part of the reason is because an increasing number of parents can’t find work. According to a U.S. Labor Department report, the average duration of unemployment in the United States hit 34.4 weeks in May, which was a big increase from 33 weeks during April. To give you some perspective how incredibly bad that is, the average duration of unemployment was only 16.5 weeks in December 2007.
The truth is that when U.S. workers lose their jobs they are finding it exceedingly difficult to find new ones.
In fact, 45.9% of those currently unemployed in America have been out of work longer than six months. That is the highest percentage since the Labor Department began keeping track of this statistic back in 1948.
So is there much hope that things will turn around soon?
No, not really.
In fact, Federal Reserve Chairman Ben Bernanke says that unemployment is likely to remain “high for a while”.
That means a lot of children are going to continue to suffer.
That means that more than 1 in 5 American children are now living in poverty.
That is a national disgrace.
Not only that, but the same report estimates that up to 500,000 children may currently be homeless in the United States.
Perhaps we should all think about that while we are enjoying our nice dinners tonight.
But most of us don’t think that it is our job to do anything about it. Most of us have been trained that it is the job of the government to fix people’s problems.
We have created a monolithic welfare state and record numbers of Americans are now dependent on it.
In fact, for the first time ever, more than 40 million Americans are on food stamps.
40.2 million Americans received food stamps in March, which was a whopping 21 percent increase from a year earlier.
But it is bad enough that 1 out of every 8 Americans is on food stamps. What is far more tragic is that one out of every four U.S. children is now on food stamps. In fact, as mentioned previously, experts tell us that half of all U.S. children will be on food stamps at some point before they turn 18.
So is anyone still not convinced that the U.S. economic system is broken?
So who is doing well these days?
The wealthy.
In 2009, the number of millionaires in the United States rose 16 percent to 7.8 million.
Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
The rich are getting richer as the poor are getting poorer. According to the United Nations, the United States has the highest level of income inequality of all of the highly industrialized nations.
The poor are left with an increasingly smaller slice of the pie to divide among themselves. In fact, those in the bottom 40 percent now collectively own less than 1 percent of the nation’s wealth.
But the truth is that as the U.S. economy continues to fall apart, we are all going to experience some very difficult times.
In particular, when the U.S. economy finally completely implodes, it is those who are almost entirely dependent on the “system” that will suffer the most pain. The vast majority of Americans live month to month, don’t grow any of their own food and could only last a couple of weeks on the food that they currently have in their homes. So what will happen to those people when the system fails?
And in case you think that this kind of talk is fearmongering, perhaps you should start listening to what some of the top financial analysts around the world are saying.
For example, Anthony Fry, the senior managing director at Evercore Partners, recently told CNBC that things are getting so bad out there that he is “considering investing in barbed wire and guns”.
Yes, things are really getting that bad.
Years ago the old timers would warn us that someday we would see Americans standing in bread lines.
Well, today food stamps are the new bread lines, and 40 million Americans a month find themselves dependent on the U.S. government for the food that they need to survive.
If that doesn’t send a chill down your spine perhaps you should check your pulse.
When a government has to feed 40 million people a month that means that the system is badly broken.
How many tens of millions of people have to be on food stamps before we can all agree that we are in a complete and total economic nightmare?
If you know of family or friends that are hurting, please consider helping them out. The truth is that in the end we are all in this together. The government is not going to save us. The collapsing U.S. economy is not going to save us. But if we all roll up our sleeves and work together perhaps we can make it through the difficult years that are coming.
Hundreds of thousands of college students all over the United States have just graduated and are getting ready for their first taste of the real world. Unfortunately for them, the real world is not always easy and it is not always fair. In fact, for large numbers of recent college graduates, the transition to a world of high unemployment, brutal student loan payments and lowered expectations can be extremely sobering. But the truth is that we have taught these young people to have a completely unrealistic view of the future. We have told them to take out gigantic student loans without worrying about how they are going to pay them back, we have told them that if they get good grades and do everything “right” that the system will reward them with secure, fulfilling careers, and we have made high school and college so “soft and cushy” that most of these young Americans find that they don’t have the discipline and the work ethic to make it when they actually do get out into society.
So needless to say, the first six months after graduation can be a complete shock for many college graduates.
In a piece recently published on MSN Money, journalist Joe Queenan described the tough environment that 2010 college graduates are being thrown into as they enter the real world….
They will enter an economy where roughly 17% of people aged 20 through 24 do not have a job, and where two million college graduates are unemployed. They will enter a world where they will compete tooth and nail for jobs as waitresses, pizza delivery men, file clerks, bouncers, trainee busboys, assistant baristas, interns at bodegas.
But waiting tables, delivering pizzas or greeting customers at the local Wal-Mart is not what most college graduates signed up for when they invested tens of thousands of dollars and four years (if not longer) of their lives in an education.
Unfortunately, that is where our economy is at today.
“Good jobs” are very few and far between and those freshly graduating from college are finding themselves suddenly thrust into an extremely competitive job market.
According to the Bureau of Labor Statistics, in March the national rate of unemployment in the U.S. was 9.7%, but for Americans younger than 25 years of age it was 18.8%.
In fact, according to a recent Pew Research Center study, approximately 37% of all Americans between the ages of 18 and 29 have either been unemployed or underemployed at some point during this recession.
But what makes things even worse for college graduates is that so many of them are coming out of school with absolutely crushing student debt loads.
But it isn’t just that they have student loans. The loan balances that many of these students are graduating with these days are absolutely obscene.
The Project on Student Debt estimates that 206,000 U.S. college students graduated with more than $40,000 in student loan debt in 2008. Using 2008 dollars as a baseline, that represents a ninefold increase over the number of students graduating with that amount of debt in 1996.
Most college students don’t think much about all of the debt that they are accumulating while they are in school.
But once they get out, the sudden realization that they have gotten themselves into student loan payments that they cannot possibly handle can be completely demoralizing.
The New York Times recently profiled Cortney Munna – a recent college graduate who has not been able to get a “good job” and who now finds herself in student loan hell. She recently told the New York Times that she would be more than glad to give back her education if she could just get out of all this debt….
“I don’t want to spend the rest of my life slaving away to pay for an education I got for four years and would happily give back.”
In recent years, millions of young college graduates have found that the “great education” that they thought they were getting actually doesn’t get them very far at all in the real world.
In fact, they often find themselves taking jobs where they work right next to other people their age who never even went to college.
So a lot of young college graduates find themselves wishing that they could just “return” their education and get all that money back.
But there is no walking away from student loan debt.
Basically, once you get into student loan hell there is no escape.
So now we have hundreds of thousands of college graduates that can’t get good jobs and that have brutal student loan payments that they can’t possibly handle.
No wonder so many of them seem so angry and depressed.
But the funny thing is that so many that are still in college are so unbelievably optimistic about the future.
Edwin Koc, director of research for the National Association of Colleges and Employers says that those approaching college graduation are an extremely confident bunch….
“Over 90 percent think they have a perfect résumé. The percentage who think they will have a job in hand three months after graduation is now 57 percent. They’re still supremely confident in themselves.”
So have we done a good job of teaching them to have confidence in themselves or have we done them a disservice by allowing so many of them to live in complete denial?
The truth is that the U.S. economy is in the process of collapsing, and we need to prepare our young people for the tough times that are ahead. Life is going to require an extreme amount of hard work and discipline in the years ahead, and unfortunately those qualities are not in great supply among young Americans right now.
Actually, the “real world” is not going to be getting easier for any of us. We are all going to require an attitude adjustment if we are going to successfully navigate the difficult times that are coming. So let’s not be too hard on new college graduates and other young Americans. The truth is that the vast majority of us are “soft” at least to some degree because of the decadent society in which we live. Let’s just hope that somehow we can all find enough inner strength to endure the great challenges that are going to confront us in the years ahead.
It is incredibly hard to put into words the absolute horror that is happening in the Gulf of Mexico right now. The millions of gallons of oil that have gushed into the Gulf of Mexico and BP’s efforts to fight the massive leak are turning the Gulf into a lifeless toxic stew of oil and chemicals. The damage caused to wildlife in the Gulf by this spill will be incalculable. Entire species are at risk of being wiped out. Scientists are telling us that the primary dispersant being used by BP ruptures red blood cells and causes fish to bleed. This is by far the greatest environmental disaster in U.S. history, and there is no end in sight. It is a worse environmental and economic disaster than all of the hurricanes of the past ten years combined. The great wetlands and beaches along the Gulf of Mexico will never be the same in our lifetimes. The seafood and tourism industries in the Gulf are being completely destroyed. The thousands of jobs and businesses being wiped out by this disaster could potentially throw the entire Gulf coast region into a depression. The damage already caused by this oil spill is beyond measure and yet the government tells us that up to 19,000 barrels (798,000 gallons) of oil a day continue to flow into the Gulf of Mexico.
Federal officials have expanded the “no fishing” area in the Gulf of Mexico to 75,920 square miles. That is 31 percent of all federal waters in the Gulf. As the oil continues to spread out there may soon be nowhere to fish.
And the oil is starting to come ashore in more places. Red-brown oil was found on Alabama’s Dauphin Island on Tuesday. As Gulf coast residents slowly watch this oil destroy everything around them they are starting to realize that this is it.
Life along the Gulf of Mexico will simply never be the same again.
The following are 30 shocking quotes about the Gulf of Mexico oil spill that reveal the soul-crushing horror this disaster is causing….
“They’ve been used at such a high volume that it’s unprecedented. The worst of these – Corexit 9527 – is the one they’ve been using most. That ruptures red blood cells and causes fish to bleed. With 800,000 gallons of this, we can only imagine the death that will be caused.”
#5)Dr. Larry McKinney, director of the Harte Research Institute for Gulf of Mexico Studies in Texas:
“Bluefin tuna spawn just south of the oil spill and they spawn only in the Gulf. If they were to go through the area at a critical time, that’s one instance where a plume could destroy a whole species.”
#6)Carol Browner, Barack Obama’s adviser on energy and climate:
“This is probably the biggest environmental disaster we have ever faced in this country. It is certainly the biggest oil spill and we are responding with the biggest environmental response.”
“It is so big and expanding so fast that it’s pretty much beyond human response that can be effective. … You’re looking at a long-term poisoning of the area. Ultimately, this will have a multidecade impact.”
“I just started crying. I couldn’t quit crying. I’m shaking now. To know that our beach may be black or brown, or that we can’t get in the water, it’s so sad.”
#18)Qin Chen, an associate professor of civil and environmental engineering at Louisiana State University in Baton Rouge on the possibility that a hurricane could push massive amounts of oil ashore along the Gulf:
“A hurricane in the Gulf of Mexico this year would be devastating.”
“I’m sure, every time they hear a negative word, their skin crawls, ’cause they need these jobs. … This is what’s going to put their kids in school, and what pays the rent.”
“The greatest environmental disaster with no end in sight! Eleven workers dead. Millions of gallons of oil gushing for months (and possibly years) to come. Jobs vanishing. Creatures dying. A pristine environment destroyed for generations. A mega-corporation that has lied and continues to lie, and a government that refuses to protect the people.”
“There has been failure, particularly with the effort to protect our coast and our marsh. And that was the biggest topic of discussion in a very frank meeting we had with the president.”
“You get hit by a hurricane and you can rebuild. But when that stuff washes up on the white sands of Pensacola Beach, you can’t just go and get more white sand.”
#25)Wilma Subra, a chemist who has served as a consultant to the Environmental Protection Agency:
“Every time the wind blows from the south-east to the shore, people are being made sick.”
“We’ll see dead bodies soon. Sharks, dolphins, sea turtles, whales: the impact on predators will be seen in a short time because the food web will be impacted from the bottom up.”
The summer of 2010 promises to be the most tumultuous summer in the short history of the European Union. The sovereign debt crisis sweeping the continent threatens to cause economic and political instability on a scale not seen in Europe for decades. The truth is that governments across the eurozone have accumulated gigantic piles of debt that simply are not sustainable. Prior to the implementation of the euro, these European governments often “printed” their way out of messes like this, but now they can’t do that. Now they either have to dramatically cut government expenses or they have to default. But the austerity measures that the IMF and the ECB are pressuring these European governments to adopt are likely to have some very painful side effects. Not only will these austerity measures cause a significant slowdown in economic growth, they are also likely to cause the same kinds of protests, strikes and riots that we saw in Greece to erupt all over Europe.
You see, most Europeans have become very accustomed to the social welfare state. Tens of millions of Europeans aren’t about to let anyone cut their welfare payments or the wages on their cushy government jobs. In most of the European nations that are experiencing big financial problems there are very powerful unions and labor organizations that do not want anything to do with austerity measures and that are already mobilizing.
As the IMF and the ECB continue to push austerity measures all over Europe this summer, the chaos that we witnessed in Greece could end up being repeated over and over again across the continent. This could truly be Europe’s summer of discontent.
The following are just a few of the countries that we should be watching very carefully in the months ahead….
Spain
In many ways, the economic situation in Spain is now even worse than the economic situation in Greece. Spain’s unemployment was already above 20 percent even before this recent crisis. There are now 4.6 million people without jobs in Spain. There are 1.6 million unsold properties in Spain, six times the level per capita in the United States. Total public/private debt in Spain has reached 270 percent of GDP.
But this past week things really started to spin out of control in Spain. Ambrose Evans-Pritchard of The Telegraph describes the current situation in Spain this way….
For Spain it has been a horrible week. The central bank seized CajaSur and imposed draconian write-down rules on banks to restore confidence. The Spanish Socialist and Workers Party (PSOE) of Jose Luis Zapatero then rammed a 5pc cut in public wages through the Cortes by a single vote, shattering consensus. The government cannot hope to pass a budget. Its own trade union base is planning a general strike.
The austerity measures that Spain has been pressured to implement have proven so unpopular in Spain that many are now projecting that Spain’s socialist government will be forced to call early elections.
Spain finds itself in a very difficult position. They have a debt that they cannot possibly handle, the IMF and the ECB are pressuring Spain to implement austerity measures which are wildly unpopular with the public, and if Spain does implement those austerity measures it may send the Spanish economy into a downward spiral.
In addition, the fact that Fitch Ratings has stripped Spain of its AAA status has pushed Spain to the edge of financial oblivion.
A recent editorial inEl Pais spoke of the “perverse spiral” that Spain’s economy is entering….
“The Fitch note drives home the apparently unsolvable contradiction in which the Spanish economy finds itself. To maintain debt solvency Spain must squeeze public spending: yet this policy undermines the chances of recovery which itself causes further loss of confidence.”
And Spain’s very powerful labor organizations are not about to take these austerity measures sitting down. In fact, the two largest trade unions in Spain are already calling for a general strike.
But French citizens are not too keen on belt-tightening. We all remember the massive riots in France a few years ago when it was proposed the the work week should be shortened. It certainly seems unlikely that the French will accept “tough budget decisions” without making some serious noise.
Italy
The Italian government recently approved austerity measures worth 24 billion euros for the years 2011-2012. But the Italian public is less than thrilled about it.
In fact, Italy’s largest union has announced that it will propose to its members a general strike at the end of June to protest these measures.
Portugal
Under pressure from the IMF and the ECB, Portugal has agreed to impose fresh austerity measures that include much higher taxes and very deep budget cuts.
And the truth is that Portugal desperately needs to do something to get their finances under control. Recent EU data shows that Portugal’s total debt is 331 percent of GDP, compared to only 224 percent for Greece.
So will the Portuguese public accept these austerity measures?
It doesn’t seem likely.
In fact, Fernando Texeira dos Santos, Portugal’s finance minister, says that he expects “violent episodes” comparable to those in Greece but insists that there is no other option.
“Either we come up with a very strong reaction or we will be reduced to bread and water.”
Romania
They have already been rioting in the streets in Romania.
Tens of thousands of workers and pensioners recently took to the streets in Romania to protest the harsh austerity measures that the Romanian government is imposing at the request of the International Monetary Fund.
The Romanian people have been through incredibly hard times before, and they aren’t about to let the IMF and the ECB impose strict austerity measures on them without a fight.
Germany
It is being reported that Germans are bracing themselves for a “bitter” round of government budget cuts. It seems that even Germany has some belt-tightening to do.
In addition, resentment is rising fast in Germany as the population there realizes that it is Germany that is going to be the one funding a large portion of the bailouts for these other European nations.
How long will the German people be able to control their tempers?
Well, the Irish have gotten into a ton of debt, and they are now finding it very expensive to finance new debt. The Irish government is now paying approximately 2.2 percentage points more than Germany is to borrow money for 10 years, while Spain (even with their economy in such a state of disaster) only has to pay 1.6 percentage points more than Germany.
But if “austerity measures” come to Ireland, how do you think the public will react?
It likely would not be pretty.
The United Kingdom
The exploding debt situation in the U.K. was a major issue in the most recent election. David Cameron promised the voters to get the U.K.’s exploding debt situation under control. But the coming budget cuts are likely to be incredibly painful. In fact, Bank of England governor Mervyn King has even gone so far as to warn that public anger over the coming austerity measures will be so painful that whichever party is seen as responsible will be out of power for a generation.
But it isn’t just national governments that are in trouble in Europe. The European Central Bank is warning that eurozone banks could face up to 195 billion euros in losses during a “second wave” of economic problems over the next 18 months.
The truth is that almost everyone is expecting the next couple of years to be very tough economically all across Europe.
But the vast majority of the European public is not going to understand the economics behind what is happening. All most of them are going to know is that the budget reductions, tax increases and pay cuts really, really hurt and that is likely to result in a whole lot of anger.
When Europeans get really angry it isn’t pretty. If what happened in Greece is any indication, this upcoming summer and fall could be a really wild one throughout Europe.
“Euroland, burned down. A continent on the way to bankruptcy” -The front page of Der Spiegel, May 5th, 2010
One of the great joys that men in free societies have long enjoyed is the ability to earn an honest wage for an honest day of work. In particular, the amazing capitalist engine that powered the U.S. economy for decade after decade greatly rewarded the incredible hard work and industriousness of the American people. America was known as the land of opportunity, and we built the largest middle class in the history of the world by working incredibly hard. But today, all of that is fundamentally changing. Thanks to rapid advances in technology, and thanks to the globalization of the work force, the labor of American workers is rapidly losing value. Automation, robotics and computers have made many jobs obsolete. Today one man can do the work that a hundred men used to do. Not only that, but today American workers literally have to compete against workers from all over the globe. Global corporations often find themselves having to choose whether to build a factory in the United States or in the third world. But in the third world workers often earn less than 10% of what American workers earn, corporations are often not required to provide any benefits to workers, and there are usually hardly any oppressive government regulations. How can American workers compete against that?
The truth is that labor is now a global commodity. How can an American worker compete against a desperate, half-starving worker in the third world that will work like mad for a dollar an hour?
But this is what we get for letting the politicians push “free trade” down our throats.
Most American workers had no idea that free trade would mean that they would suddenly be competing for jobs against workers in the Philippines and Malaysia.
But that is the cold, hard reality of globalism.
All of this free trade has been very hard on American workers as factory after factory has closed, but it has allowed the big corporations to get exceedingly wealthy.
The top executives at the big global corporations are certainly enjoying all of this free trade. Their salaries have soared.
In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. Since the year 2000, that ratio has ranged between 300 to 500 to one.
The rich are getting richer and the poor are getting poorer.
That is what globalism is all about.
The elite make out like bandits as they exploit third world labor pools, while the American middle class finds itself slowly being crushed out of existence.
According to the United Nations Gini Coefficient (which measures distribution of income), the United States has the highest level of inequality of all of the highly industrialized nations.
Increasingly, all of the rewards are going to those at the top, while the vast majority of Americans are left wondering why things just don’t seem to work out for them.
Instead, the American middle class is gradually being pushed into lower paying service jobs. But it is really hard to feed a family by cutting hair or by greeting the folks who come walking into the local Wal-Mart.
If you talk to many Americans, they just can’t seem to figure out why they can’t make things work out even though they are working as hard as they can. Millions of Americans have found themselves taking on second (and in many cases third) jobs in an attempt to provide for their families.
But what they don’t understand is that the global elite have turned labor into a globalized commodity.
American workers are not faced with a level playing field. Just check out some of the pay levels around the world that American workers must compete against….
In Bangladesh, a garment worker makes 22 cents an hour. The wage in Cambodia is 33 cents an hour; in Pakistan, 37 cents an hour; in Vietnam, 38 cents; in Sri Lanka, 43 cents; Indonesia, 44 cents; India, 55 cents; China, 86 cents; the Philippines, $1.07; and Malaysia, $1.18.
Do any of you want to work for $1.18 an hour with no benefits?
But that is your competition.
Wages are being driven down and big global corporations are loving it.
This isn’t capitalism.
This is the global elite pushing us into a cruel system of economic slavery where they control all of the wealth and the rest of us struggle to survive as we work our tails off for them.
Already we are seeing large numbers of Americans becoming absolutely desperate to get even a low paying job.
For example, over one three day period, approximately 10,000 people showed up to apply for 90 jobs making washing machines in Kentucky for $27,000 a year.
Can your family live on $27,000 a year?
But that is considered a good wage now.
Actually, the folks who are making really good wages now are those who work for the U.S. government.
Yes, life is good if you are a servant of the system.
Of course government employees basically produce next to nothing except red tape.
The U.S. government doesn’t seem to care if they are productive or not. They just keep borrowing more money and getting us into even more financial trouble.
But at least there is somewhere for middle class families to get decent jobs.
In fact, it is getting really hard to live a middle class lifestyle in America without relying on the government in some way.
The truth is that good jobs are becoming increasingly scarce.
That is why it is absolutely imperative for all of us to try to become as independent as possible.
That means getting out of debt.
That means starting our own businesses.
That means learning how to grow a garden.
Many of those who continue to blindly rely on the system to provide them with a “job” (“just over broke”) will end up bitterly disappointed in the end.
Millions of Americans have already lost their jobs and millions more Americans will lose their jobs as we move along through the next few years.
In fact, with all of the amazing advances in technology that we have seen over the past couple of decades, the global elite are starting to realize that they really don’t need 6 billion workers after all.
Instead, those among the global elite are increasingly viewing all of us as a burden. They openly ask why they should have to take care of so many “useless eaters”. After all, if the system does not need all of us to keep functioning, then what good are we to them?
In fact, just over one year ago Bill Gates, David Rockefeller, Warren Buffett, George Soros, Michael Bloomberg, Ted Turner, Oprah Winfrey and other very wealthy power brokers held a clandestine meeting in New York.
Instead of being viewed as valuable workers, now we are being viewed by the elite as pests that have multiplied to the point where we are now out of control.
What a strange world we live in now.
We need to get back to the America where good workers are valued and where hard work is rewarded.
We need to get back to the America where having a large middle class is an important national goal.
We need to get back to the America where we build American businesses, where we hire American workers and where we buy American products.
But unless the American people wake up, American workers are going to continue to be devalued.
Are we actually going to sit back and let American living standards decline to third world standards?
It is up to this generation to reject globalism and to reclaim the great free enterprise principles that this nation was founded on.
If someday our children and grandchildren exist in a world where they are considered just another part of the third world labor pool they will know who to blame.
When Barack Obama visited Buffalo recently, he was greeted by a billboard advertisement with a very pointed message about unemployment. In just a few words it summarized the frustrations of an entire region. The billboard along I-190 had this very simple message for Obama: “Dear Mr. President, I need a freakin job. Period. Sincerely, inafj.org.” As word about this billboard got out, it quickly made headlines all over the United States. Why? Well, the truth is that millions of hard working Americans are extremely frustrated about their lack of work right now. When you don’t have a job and you can’t provide for your family, very little else seems to matter. In fact, according to a recent Gallup poll, unemployment is now the second most important issue to American voters. The number one issue is the economy.
The reality is that the American people don’t want excuses.
They want jobs.
And some are getting so desperate that they are even putting up billboards to express their frustrations.
So who sponsored the billboard in Buffalo?
Well, it was actually sponsored by a group organized by Buffalo businessman Jeff Baker. It turns out that Baker lost his own small business 15 months ago. His business had employed 25 people, and when he was forced to close it he described it as “the most heartbreaking situation” of his entire life.
Baker’s group, INAFJ (“I Need A Freakin Job”), says that they are not about playing politics. What they want is only one thing.
Jobs.
They want someone to put the American people back to work. Baker recently explained it this way….
“Nothing else matters unless the American people are working.”
In some areas of the United States, the situation is beyond desperate. Detroit is a great example of this. Not only does the city resemble a war zone at this point, but Detroit’s mayor says that the unemployment rate in his city is somewhere around 50 percent.
So how in the world is a major city supposed to function when 40 to 50 percent of the people living there can’t get the work that they need?
The sad thing is that Detroit used to be one of the most prosperous areas in the United States. Once upon a time, the auto industry was booming and there were lots of great jobs available for blue collar workers.
But that all seems so far away now.
For decades, the politicians in Washington D.C. have allowed (or even encouraged) the offshoring of our manufacturing jobs, and now we are a nation with a dwindling manufacturing base that is rapidly bleeding cash.
In fact, the U.S. trade deficit widened for the second consecutive month in March to its highest level since December 2008. Every single month we buy much more from the rest of the world than they buy from us. That means that wealth is constantly flowing out of this nation, and no end to the bleeding is in sight.
The truth is that America’s twin deficits (the trade deficit and the massive U.S. government budget deficit) are absolutely destroying the financial condition of this nation. For years and years economists have warned that these deficits would bring about a day of reckoning at some point, and now that day is here.
We are told by the media that we have entered an economic recovery, but with tens of millions of Americans not able to get the work that they need, most people are not convinced. In fact, a new poll shows that 76 percent of Americans believe that the U.S. economy is still in a recession.
But this is nothing compared to what is coming.
The truth is that the United States is rapidly becoming a service economy. Service jobs pay less than manufacturing jobs do, and the rapid advance of technology in recent decades has made human labor increasingly unnecessary.
That means that the “system” does not need our labor as much as it once did.
This is leading to a situation where there is a widening gap between the “haves” and the “have nots”. In fact, the bottom 40 percent of those living in the United States now collectively own less than 1 percent of the nation’s wealth.
But not everyone has been hurting during this financial crisis.
Did you know that the number of millionaires in the United States rose 16 percent to 7.8 million in 2009?
Not only that, but an analysis of income-tax data by the Congressional Budget Office a few years ago found that the top 1% of households in the United States own nearly twice as much of the corporate wealth as they did just 15 years ago.
The elite are getting richer, while at the same time tens of millions of other Americans are finding it increasingly more difficult to survive.
That is why groups like INAFJ are becoming so popular. They are tapping into the frustration of the growing number of Americans who are desperately trying to make it from month to month. The following is a short video that INAFJ posted on YouTube about their organization….
So do have a story of economic frustration that you would like to share with the world?
Have you found yourself working harder and harder for less and less?
Does it seem like you come up short at the end of every month no matter how hard you try?
If you have a story, we would love to share it with our readers. Please feel free to post your tale of economic frustration in the comments section below….
Most Americans have no idea what the term “Keynesian economics” means, but the truth is that it has been deeply influencing U.S. economic policy for decades. Essentially, it is an economic theory that originated with a 20th century British economist named John Maynard Keynes, and it advocates government intervention in the economy in order to smooth out economic cycles. The general idea was that lower interest rates and increased government spending could be used to increase aggregate demand when the economy was experiencing a downturn, thus increasing economic activity and reducing unemployment.
And you know what?
To a certain degree, Keynesian economic theory actually does work.
Increased government spending DOES stimulate the economy.
But the problem is that governments all over the world decided that they would just run constant budget deficits and stimulate the economy all the time.
All of this debt has brought a temporary prosperity to many of the nations around the globe, but there is one huge problem with debt.
It has to be paid back eventually.
With interest.
So what happens when nations have to start spending huge chunks of their national budgets just to service all the debt that they have piled up?
Well, that is when they taste the bitter side of Keynesian economics.
In fact, we see that starting to happen all over the world right now.
All of a sudden, governments all over the globe are talking about huge budget cuts, pay decreases, and higher taxes.
We all know about what is going on in Greece right now, but suddenly it seems like “austerity measures” are being implemented all over the place. Just consider the following examples….
*Barack Obama is personally pressuring Spain to make severe austerity cuts.
*It’s not just Southern Europe that is facing these austerity measures either. It is being reported that Germans are bracing themselves for a “bitter” round of budget cuts.
*The exploding debt situation in the U.K.was a major issue in the most recent election. Bank of England governor Mervyn King has even gone so far as to warn that public anger over the “austerity measures” that soon must be implemented in the U.K. will be so painful that whichever party is seen as responsible will be out of power for a generation.
*Federal Reserve Chairman Ben Bernanke says that United States citizens will soon have to make difficult choices between higher taxes and reduced government spending.
*California Governor Arnold Schwarzenegger is reportedly planning to seek “terrible cuts” to eliminate an $18.6 billion budget deficit facing the most-populous U.S. state through June 2011.
So what happens when austerity measures are implemented?
Well, just as Keynesian economics correctly predicts that economic growth goes up when government spending increases, it also correctly tells us that economic growth goes down when government spending decreases.
So all of these austerity measures are going to mean economic pain for a whole lot of people.
Not only that, but there are now whispers that this European debt crisis could potentially cause the break up of the euro.
Whether or not that is actually the case, officials in Europe are sure seizing on this crisis to advocate for increased centralization of power in the EU.
But not only that, the Governor of the Bank of England, Mervyn King, has come right out and said that he believes that the European Union must become a federalized fiscal union if it is to survive.
Doesn’t it seem like whenever there is a crisis the solution that is always being proposed is to give centralized institutions even more power?
There has also been talk that nations such as Greece could end up being ejected from the euro, but the reality is that such a scenario is not very likely.
For one thing, the ECB has already come out and said that under current EU law, ejection of a nation from the monetary union is “legally next to impossible”.
In addition, leaders throughout Europe realize that if the euro fails then the entire EU may fail as well. German Chancellor Angela Merkel made this very clear when she recently warned that if the euro collapses, “then Europe and the idea of European union will fail.”
For many in Europe that would seem like a disaster, but the truth is that it would be a wonderful, wonderful thing if the euro failed.
Why?
Because it would represent a major defeat for those who are seeking to drag us towards a “world currency” and a “global government”.
It would also be a huge victory for those who still believe in national sovereignty and the decentralization of economic power.
So let us hope that the euro breaks up.
But don’t count on it.
Meanwhile, the one thing that we can count on is all of the economic pain that all of these new austerity measures are going to bring.
Everyone knows that the United States is bleeding jobs. According to one new study, the private sector in the United States has lost 10.5 million jobs since 2007. The U.S. economy lost 125,000 more jobs during the month of June. Approximately a million frustrated American workers have simply dropped out of the employment market altogether over the past two months. But the question not enough people are asking is why so many jobs are being lost. Yes, the large global corporations have been sending millions of jobs overseas where labor is far, far cheaper. And yes, the U.S. government has accumulated so much debt that it is absolutely suffocating the U.S. economy. But there is another very important factor that has been largely overlooked. Traditionally, about 75 percent of all new jobs are created by small businesses. But today, hundreds of thousands of small businesses are being strangled out of existence by all of the oppressive taxes, fees, rules, regulations, paperwork and demands that government keeps imposing on them. In such a repressive environment, it is getting close to impossible for small businesses to thrive, and if our small businesses can’t succeed, then we simply are not going to see a lot of jobs being created. 
Europe’s Coming Summer Of Discontent
You see, most Europeans have become very accustomed to the social welfare state. Tens of millions of Europeans aren’t about to let anyone cut their welfare payments or the wages on their cushy government jobs. In most of the European nations that are experiencing big financial problems there are very powerful unions and labor organizations that do not want anything to do with austerity measures and that are already mobilizing.
As the IMF and the ECB continue to push austerity measures all over Europe this summer, the chaos that we witnessed in Greece could end up being repeated over and over again across the continent. This could truly be Europe’s summer of discontent.
The following are just a few of the countries that we should be watching very carefully in the months ahead….
Spain
In many ways, the economic situation in Spain is now even worse than the economic situation in Greece. Spain’s unemployment was already above 20 percent even before this recent crisis. There are now 4.6 million people without jobs in Spain. There are 1.6 million unsold properties in Spain, six times the level per capita in the United States. Total public/private debt in Spain has reached 270 percent of GDP.
But this past week things really started to spin out of control in Spain. Ambrose Evans-Pritchard of The Telegraph describes the current situation in Spain this way….
For Spain it has been a horrible week. The central bank seized CajaSur and imposed draconian write-down rules on banks to restore confidence. The Spanish Socialist and Workers Party (PSOE) of Jose Luis Zapatero then rammed a 5pc cut in public wages through the Cortes by a single vote, shattering consensus. The government cannot hope to pass a budget. Its own trade union base is planning a general strike.
The austerity measures that Spain has been pressured to implement have proven so unpopular in Spain that many are now projecting that Spain’s socialist government will be forced to call early elections.
Spain finds itself in a very difficult position. They have a debt that they cannot possibly handle, the IMF and the ECB are pressuring Spain to implement austerity measures which are wildly unpopular with the public, and if Spain does implement those austerity measures it may send the Spanish economy into a downward spiral.
In addition, the fact that Fitch Ratings has stripped Spain of its AAA status has pushed Spain to the edge of financial oblivion.
A recent editorial inEl Pais spoke of the “perverse spiral” that Spain’s economy is entering….
“The Fitch note drives home the apparently unsolvable contradiction in which the Spanish economy finds itself. To maintain debt solvency Spain must squeeze public spending: yet this policy undermines the chances of recovery which itself causes further loss of confidence.”
And Spain’s very powerful labor organizations are not about to take these austerity measures sitting down. In fact, the two largest trade unions in Spain are already calling for a general strike.
So could Spain end up being the next Greece?
France
France admitted on Sunday that keeping its top-notch credit rating would be “a stretch” without some tough budget decisions.
But French citizens are not too keen on belt-tightening. We all remember the massive riots in France a few years ago when it was proposed the the work week should be shortened. It certainly seems unlikely that the French will accept “tough budget decisions” without making some serious noise.
Italy
The Italian government recently approved austerity measures worth 24 billion euros for the years 2011-2012. But the Italian public is less than thrilled about it.
In fact, Italy’s largest union has announced that it will propose to its members a general strike at the end of June to protest these measures.
Portugal
Under pressure from the IMF and the ECB, Portugal has agreed to impose fresh austerity measures that include much higher taxes and very deep budget cuts.
And the truth is that Portugal desperately needs to do something to get their finances under control. Recent EU data shows that Portugal’s total debt is 331 percent of GDP, compared to only 224 percent for Greece.
So will the Portuguese public accept these austerity measures?
It doesn’t seem likely.
In fact, Fernando Texeira dos Santos, Portugal’s finance minister, says that he expects “violent episodes” comparable to those in Greece but insists that there is no other option.
So it promises to be a wild summer in Portugal. The CGTP trade union federation in Portugal has promised to mobilize their members….
“Either we come up with a very strong reaction or we will be reduced to bread and water.”
Romania
They have already been rioting in the streets in Romania.
Tens of thousands of workers and pensioners recently took to the streets in Romania to protest the harsh austerity measures that the Romanian government is imposing at the request of the International Monetary Fund.
The Romanian people have been through incredibly hard times before, and they aren’t about to let the IMF and the ECB impose strict austerity measures on them without a fight.
Germany
It is being reported that Germans are bracing themselves for a “bitter” round of government budget cuts. It seems that even Germany has some belt-tightening to do.
In addition, resentment is rising fast in Germany as the population there realizes that it is Germany that is going to be the one funding a large portion of the bailouts for these other European nations.
How long will the German people be able to control their tempers?
Ireland
The Wall Street Journal is warning that Ireland could be Europe’s next financial basket case.
Why?
Well, the Irish have gotten into a ton of debt, and they are now finding it very expensive to finance new debt. The Irish government is now paying approximately 2.2 percentage points more than Germany is to borrow money for 10 years, while Spain (even with their economy in such a state of disaster) only has to pay 1.6 percentage points more than Germany.
But if “austerity measures” come to Ireland, how do you think the public will react?
It likely would not be pretty.
The United Kingdom
The exploding debt situation in the U.K. was a major issue in the most recent election. David Cameron promised the voters to get the U.K.’s exploding debt situation under control. But the coming budget cuts are likely to be incredibly painful. In fact, Bank of England governor Mervyn King has even gone so far as to warn that public anger over the coming austerity measures will be so painful that whichever party is seen as responsible will be out of power for a generation.
But it isn’t just national governments that are in trouble in Europe. The European Central Bank is warning that eurozone banks could face up to 195 billion euros in losses during a “second wave” of economic problems over the next 18 months.
The truth is that almost everyone is expecting the next couple of years to be very tough economically all across Europe.
But the vast majority of the European public is not going to understand the economics behind what is happening. All most of them are going to know is that the budget reductions, tax increases and pay cuts really, really hurt and that is likely to result in a whole lot of anger.
When Europeans get really angry it isn’t pretty. If what happened in Greece is any indication, this upcoming summer and fall could be a really wild one throughout Europe.
“Euroland, burned down. A continent on the way to bankruptcy”
-The front page of Der Spiegel, May 5th, 2010