Even though the U.S. financial system nearly experienced a total meltdown in late 2008, the truth is that most Americans simply have no idea what is happening to the U.S. economy. Most people seem to think that the nasty little recession that we have just been through is almost over and that we will be experiencing another time of economic growth and prosperity very shortly. But this time around that is not the case. The reality is that we are being sucked into an economic black hole from which the U.S. economy will never fully recover.
The problem is debt. Collectively, the U.S. government, the state governments, corporate America and American consumers have accumulated the biggest mountain of debt in the history of the world. Our massive debt binge has financed our tremendous growth and prosperity over the last couple of decades, but now the day of reckoning is here.
And it is going to be painful.
The following are 20 reasons why the U.S. economy is dying and is simply not going to recover....
#1) Do you remember that massive wave of subprime mortgages that defaulted in 2007 and 2008 and caused the biggest financial crisis since the Great Depression? Well, the "second wave" of mortgage defaults in on the way and there is simply no way that we are going to be able to avoid it. A huge mountain of mortgages is going to reset starting in 2010, and once those mortgage payments go up there are once again going to be millons of people who simply cannot pay their mortgages. The chart below reveals just how bad the second wave of adjustable rate mortgages is likely to be over the next several years....
#2) The Federal Housing Administration has announced plans to increase the amount of up-front cash paid by new borrowers and to require higher down payments from those with the poorest credit. The Federal Housing Administration currently backs about 30 percent of all new home loans and about 20 percent of all new home refinancing loans. Tighter standards are going to mean that less people will qualify for loans. Less qualifiers means that there will be less buyers for homes. Less buyers means that home prices are going to drop even more.
#3) It is getting really hard to find a job in the United States. A total of 6,130,000 U.S. workers had been unemployed for 27 weeks or more in December 2009. That was the most ever since the U.S. government started keeping track of this statistic in 1948. In fact, it is more than double the 2,612,000 U.S. workers who were unemployed for a similar length of time in December 2008. The reality is that once Americans lose their jobs they are increasingly finding it difficult to find new ones. Just check out the chart below....
#4) In December, there were also 929,000 "discouraged" workers who are not counted as part of the labor force because they have "given up" looking for work. That is the most since the U.S. government first started keeping track of discouraged workers in 1949. Many Americans have simply given up and are now chronically unemployed.
#5) Some areas of the U.S. are already virtually in a state of depression. The mayor of Detroit estimates that the real unemployment rate in his city is now somewhere around 50 percent.
#6) For decades, our leaders in Washington pushed us towards "a global economy" and told us it would be so good for us. But there is a flip side. Now workers in the U.S. must compete with workers all over the world, and our greedy corporations are free to pursue the cheapest labor available anywhere on the globe. Millions of jobs have already been shipped out of the United States, and Princeton University economist Alan S. Blinder estimates that 22% to 29% of all current U.S. jobs will be offshorable within two decades. The days when blue collar workers could live the American Dream are gone and they are not going to come back.
#7) During the 2001 recession, the U.S. economy lost 2% of its jobs and it took four years to get them back. This time around the U.S. economy has lost more than 5% of its jobs and there is no sign that the bleeding of jobs is going to stop any time soon.
#8) All of this unemployment is putting severe stress on state unemployment funds. At this point, 25 state unemployment insurance funds have gone broke and the Department of Labor estimates that 15 more state unemployment funds will likely go broke within two years and will need massive loans from the federal government just to keep going.
#9) 37 million Americans now receive food stamps, and the program is expanding at a pace of about 20,000 people a day. The United States of America is very quickly becoming a socialist welfare state.
#10) The number of Americans who are going broke is staggering. 1.41 million Americans filed for personal bankruptcy in 2009 - a 32 percent increase over 2008.
#11) For decades, the fact that the U.S. dollar was the reserve currency of the world gave the U.S. financial system an unusual degree of stability. But all of that is changing. Foreign countries are increasingly turning away from the dollar to other currencies. For example, Russia’s central bank announced on Wednesday that it had started buying Canadian dollars in a bid to diversify its foreign exchange reserves.
#12) The recent economic downturn has left some localities totally bankrupt. For instance, Jefferson County, Alabama is on the brink of what would be the largest government bankruptcy in the history of the United States - surpassing the 1994 filing by Southern California's Orange County.
#13) The U.S. is facing a pension crisis of unprecedented magnitude. Virtually all pension funds in the United States, both private and public, are massively underfunded. With millions of Baby Boomers getting ready to retire, there is simply no way on earth that all of these obligations can be met. Robert Novy-Marx of the University of Chicago and Joshua D. Rauh of Northwestern's Kellogg School of Management recently calculated the collective unfunded pension liability for all 50 U.S. states for Forbes magazine. So what was the total? 3.2 trillion dollars.
#14) Social Security and Medicare expenses are wildly out of control. Once again, with millions of Baby Boomers now at retirement age there is simply going to be no way to pay all of these retirees what they are owed.
#15) So will the U.S. government come to the rescue? The U.S. has allowed the total federal debt to balloon by 50% since 2006 to $12.3 trillion. The chart below is a bit outdated, but it does show the reckless expansion of U.S. government debt over the past several decades. To get an idea of where we are now, just add at least 3 trillion dollars on to the top of the chart....
#16) So has the U.S. government learned anything from these mistakes? No. In fact, Senate Democrats on Wednesday proposed allowing the federal government to borrow an additional $2 trillion to pay its bills, a record increase that would allow the U.S. national debt to reach approximately $14.3 trillion.
#17) It is going to become even harder for the U.S. government to pay the bills now that tax receipts are falling through the floor. U.S. corporate income tax receipts were down 55% in the year that ended on September 30th, 2009.
#18) So where will the U.S. government get the money? From the Federal Reserve of course. The Federal Reserve bought approximately 80 percent of all U.S. Treasury securities issued in 2009. In other words, the U.S. government is now being financed by a massive Ponzi scheme.
#19) The reckless expansion of the money supply by the U.S. government and the Federal Reserve is going to end up destroying the U.S. dollar and the value of the remaining collective net worth of all Americans. The more dollars there are, the less each individual dollar is worth. In essence, inflation is like a hidden tax on each dollar that you own. When they flood the economy with money, the value of the money you have in your bank accounts goes down. The chart below shows the growth of the U.S. money supply. Pay particular attention to the very end of the chart which shows what has been happening lately. What do you think this is going to do to the value of the U.S. dollar?....
#20) When a nation practices evil, there is no way that it is going to be blessed in the long run. The truth is that we have become a nation that is dripping with corruption and wickedness from the top to the bottom. Unless this fundamentally changes, not even the most perfect economic policies in the world are going to do us any good. In the end, you always reap what you sow. The day of reckoning for the U.S. economy is here and it is not going to be pleasant.
The curse of millions of innocent victims of American imperialistic ways through out the world are slowly casting the darkest cloud all over the States the world has ever seen. Every great empire has come to an end and the judgment day for America is in the horizon.
God causes all things,good and evil,to judge man.there will be NO solution for these events as WAS CLEARLY STATED IN THE BIBLE.deny self and come out of the babylonian,persia/medes/greece,roman catholic money system of self-worship.
Painesright is correct. Government is the problem and the only smart thing for every American to do is vote out every incumbant. Get Independents to run for office, like Ron Paul. Five years ago, I would point out comments Ron Paul expressed and people thought you were crazy. Now, most are starting too see the total corruption problem in politics. Glenn Beck is correct too. We need to go back to the basics and vote out the socialists, they don’t get it and never will.
The book of Zephaniah sums it up accurately:”I will utterly remove all things from off the face of the earth, says the LORD.
I will bring a stumbling block against the wicked; and I will destroy man from the face of the earth, says the LORD.
And those who are turned back from the LORD; and those who have not sought the LORD, nor enquired for him.
Stand in awe at the presence of the LORD God; for the day of the LORD is at hand; yea, the LORD has prepared sacrifices, he has invited his quests.
And it shall come to pass in the day of the LORD’S sacrifice that I will punish the princes and the kings’s children, and all such as are clothed in strange apparel.
In that day I WILL PUNISH ALL THOSE WHO DO VIOLENCE AND WHO DO PLUNDER, WHO FILL THEIR STOREROOMS WITH THINGS ACQUIRED BY MEANS OF EXTORTION AND DECEIT.
THEREFORE THEIR GOODS SHALL BECOME A BOOTY AND THEIR HOUSES A DESOLATION; THEY SHALL ALSO BUILD HOUSES, BUT NOT INHABIT THEM; and they shall plant vineyards, but not drink the wine thereof.
The great day of the LORD is near, it is very near, and hastens fast; even the voice of the day of the Lord; yea, it is bitter, harsh, and severe.
That day is a day of wrath, a day of trouble and distress, a day of confusion and desolation, a day of darkness, and gloominess, a day of clouds and thick darkness,
A day of the trumpet and shouting AGAINST THE FENCED CITIES AND AGAINST THE HIGH TOWERS.
And I will bring distress upon MEN, that they SHALL WALK LIKE BLIND MEN, BECAUSE THEY HAVE SINNED AGAINST THE LORD; and their blood shall be poured out like dust, and their flesh like dung.
NEITHER THEIR SILVER NOR THEIR GOLD SHALL BE ABLE TO DELIVER THEM in the day of the LORD’S wrath; but the whole land shall be consumed in the fire of his indignation; for he shalL make a speedy destruction against all the inhabitants of the earth.” (Zep.1:2-3,6-913-18)
His name is Yeshua, sent from Heaven to be crucified. Those who should have loved, turned and walked away…those who didn’t have eternal life.
His name is Yeshua, GOD’S Salvation Grace. Righteous Holiness, His name implies. For a sin-filled world, he lived,bled and died,raised and ascended to our Father’s Throne.
His name is Yeshua. YAHWEH’S Spirit Son; Wants the world to know that Love is blind. Renews hearts and minds…for His Kingdom come. Let His will be done forever more.
His name is Yeshua. Majestic Gloriness. Coming soon to judge the earth. Live to see the Son and His Gospel be done…the reading of GOD’S Word is the only way. Trust and Obey the Holy Spirit way. You’ll find your life transformed and changed as you walk His way.
His name is Yeshua. He’s soon to come as King. The parting of the clouds will be His sign. Look up to the sky and hear the trumpet cry. Always be prepared to be caught up on High.
As Christians who believe that Jesus Christ sacrificed his life for our sins, we have a hope through all of the hardship that once absent from this earth we will be present with our Heavenly Father. This gift is for free and for anyone who will accept it. It’s your choice, life or death. I chose life!
Phyllis and the rest of you idiotic holy rollers. WE are our own MASTERS. We make our life and the world around us.
If there was a God don’t you think he/she would have intervened someplace during the past few thousand years??
NJ guy
February 23rd, 2010 at 7:46 pm
Phyllis and the rest of you idiotic holy rollers. WE are our own MASTERS. We make our life and the world around us.
If there was a God don’t you think he/she would have intervened someplace during the past few thousand years??
(God intervenes everyday and constantly. You have only to have the faith to see it. You are right, we are our own masters with free choice. That free choice was provided by God. The basis of your argument is that we should live in a eutopia for the precense of God to be proven. In your euopia nothing negative would occur. You cannot have a eutopia and free choice because evil is a reality that is proven. The fact that humans have the choice of evil uspets the balance, not God)
You are ignoring the easy answer.
If you simply tax the wealth – not the income – but the WEALTH of the wealth holders inthe US you can quickly pay down the public debt and balance the budget.
If you ALSO decrease working hours while increasing minimum wage you instantly create mor ejobs that pay more which immediately pumps money into consumers hands that spend it and pay off their debt. This expand sthe economy and causes a huge boom.
This is EXACTLy what they did inthe 1930’s which got us out of the depression by 1933. by 1938 the us economy was equal to the overheated debt based economy of the 1929’s however by 1938 it was based on REAL economic activity becuase of highly paid now rich consumers spending their money.
It worked then and will work again.
their just aren’t enough starving people inthe streets yet to demand real chang einstead of the the fake change fronted by Obama who is really a republican (yes he is – look at what he has proposed and done -it’s exactly bush’s plan)
vivzizi
To all the Christians…. get that crap out of here. Wake up, there isn’t a God, a 5th grade science book confirms that. Get educated. Stop being ignorant to science and fact.
Vivzizi… that isn’t what brought us out of the first depression, it was ww2 and all the jobs it created, and all the money generated.
Get educated before posting, thank you.
jacob h -
Your comment is an exaggeration. It is amazing that anyone could think a simple 5th grade science book proves God does not exists. If that is so, then why do people such as Steven Hawking, Einstein, Newton, Dr. Francis Collins, Antony Flew, and many other respected scientists agree that there must be something else, a “superior mind” as they refer to it that created our universe. Whether they believe that mind is the God of the Bible or not is moot. The point is, they are some of the smartest men to ever live, and yet they know there must be something more than just the physical universe we see. I concur with them. Stop listening to Dawkins and other obviously bitter atheists. Dawkins puts his own foot in his mouth many times:
* The account of the origin of life that I shall give is necessarily speculative; by definition, nobody was around to see what happened. – The Selfish Gene (1989) p.14
* Biology is the study of complicated things that give the appearance of having been designed for a purpose. – The Blind Watchmaker (1996)
* It is almost as if the human brain were specifically designed to misunderstand Darwinism, and to find it hard to believe. – The Blind Watchmaker (1996) p.316
* As an academic scientist I am a passionate Darwinian, believing that natural selection is, if not the only driving force in evolution, certainly the only known force capable of producing the illusion of purpose which so strikes all who contemplate nature. – The Devil’s Chaplain (2003) p.10
* Darwinian natural selection can produce an uncanny illusion of design. An engineer would be hard put to decide whether a bird or a plane was the more aerodynamically elegant. So powerful is the illusion of design, it took humanity until the mid-19th century to realise that it is an illusion. – NewScientist (September 17 2005) p.33
Yes, the universe was designed. It is no illusion, as Dawkins likes to try to cover it up. Design and purpose are all around us. The Kalam cosmological argument helps us understand that a “superior mind” was needed for our universe to exist. That which has a beginning must have a first cause. The universe had a beginning, therefore it had a first cause. That first cause must transcend time and space – our universe, by definition. This first cause is therefore God.
The universe is not eternal, science has proven that. Matter and energy came from somewhere. Matter and energy cannot come from absolute nothingness – no time, no space, no energy, no quantum particles, true pure nothingness. Therefore, our universe came from a being – a “superior mind” as Einstein called it. If Francis Collins (Human Genome Project), Stephen Hawking, Newton, Boyle, Planck (Planck’s constant), and Einstein believe(d) in a “superior mind”, then why do you have such a hard time believing it?
At the very least, your comment seems to indicate that these great scientists are all a bunch of idiots, or that they never read a 5th grade science book. Do you see how silly that sounds?