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.
Hello,
Awesome article. I am going to throw it up on my website with a link back to yours with a litle commentary from me. Please tell me if this is OK.
People are not at all ready for the coming depression and we’re going to see a post earthquake-Haiti environment in many US cities in the next couple decades — straight out of the movie ROBOCOP — I tell you that!
http://thecomingdepression.net
Sure that is no problem – thanks for checking out our site I hope that you will visit us often!
Social comments and analytics for this post…
This post was mentioned on Reddit by pitofdoom: How much time does a Trillion buy is the only unanswered question….
Yes indeed, A fine article that speaks the truth unlike our media outlets. Please visit my blog for ways you can prepare for the greatest depression of all time. http://www.newamerica-now.blogspot.com and my youtube video that are packed with ideas at http://www.youtube.com/user/newamericanow
The U.S. economy is doomed…. America will not wake up from this coma unless the second great depression is advanced. We need the depression to occur sooner rather than later. So we can make up for the debt driven society that has occurred since America was first introduced to credit cards, adjustable rate mortgages and 100% financing on every doodad on earth…
“straight out of the movie ROBOCOP”
I’ll buy that for a dollar!
The money supply is increasing exponentially because they are monetizing debt– this will quickly spiral beyond the control of anyone– including the government– to do anything about it. One point not mentioned is that ALL governments with shaky financials (i.e., high debt/GDP ratio) will see their fiat money decline too, as people start to think, “If it can happen to the almighty US dollar, it can certainly happen to the peso, ruble, or euro.” Before the crash, please buy anything you and your family will need to survive– food, commodities, hand tools, medicines, band-aids and razor blades– as all will soon be much much more expensive. And don’t be fooled by the pullback in precious metals– those too will be a good store of welath in the months and years to come.
I posted on my website…
The U.S. will virtually need a miracle to pull out of this one unscathed.
In the days when Social Security was truly voluntary, it was considered ‘good form’ to turn it down, since a person was expected, and could EXPECT to stand on his/her own two feet and make enough money during their lifetime to provide for their own retirement.
Now that Social Security is a “birthright” a person can expect and is expected to provide for their own funeral.
You have sited many good reasons for this economy to dissolve, and I agree with all of them. I will add a few more main points that I have reason to believe that will bring about the complete implosion of this holographic monetary system. It will be soon!
We have gone from a working model of capitalism up until1913, when the Federal Reserve came into fruition under the guise of the Rothchilds, who basically from that time until now have seen to the wreckage of our dear Republic thru greed and corruption, and the need for power and enslavement of the human population.
There is always a warning sign of dire things to come. Dubai World was that warning sign. It was the canary in the mineshaft, and is now lying lifeless at the bottom of its gilded cage. It was a sign that this fake holographic system we call a world economy is not real. Its a contrived system brought about by Goldman Sachs and the economic gangsters of the Federal Reserve, and the evil cabinet that presides over this presidency.
There are $600 trillion of derivatives sitting in every major bank of the world. More than all the world GDP combined. It is worhtless hedges of a gambling casino that Wall Street has been thriving on. As the dollar dissolves so does all this worthless paper. It will implode soon, and when it does, it will take down the whole world with it.
World consumption is at a standstill, only being propped up by trillions of dollars loosing its value every day.The bond market will crash soon, as the world tries to unload the dollar, but its too late for them also.
The Dow is overblown and will crash soon, as the Feds can no longer prop it up with fake bottom lines. These corporations are not making money, for the American consumer is lying on a gurney barely breathing. Christmas retail was a joke, and you will see a crush of more retail stores going under. Commercial property will plunge in value as stores and malls sit empty. Unemployment will skyrocket to over 30% soon.
The Comex and the whole Ponzi scheme it represents will go bust soon. As short and long contracts are called in, they don’t have the gold to ship. The US and London are toast. Fort Knox is holding nothing but gold plated tungsten bars, and London is in the same fix, no gold. Hong Kong and Germany have requested their gold, good luck. The con game is over.
Most of the states in this country are bankrupt, with no tax base to keep them going, as is the Federal government and the Federal Reserve, as they are cooking two sets of books.
There is no way for Bernanke to print enough money to bail out every state and keep the major banks upright while a new tsunami of commercial, residential, auto loan, and credit card defaults race their way. AIG, Fannie and Freddie are toast as these tsunamis of bad paper unwind, and the Feds will be hard pressed to bypass Congress to bail them out further. The realstate, auto, and insurance busineesses are all going to tank. And as you have stated, the pension plans will go bust.
There is also food shortages coming this year that will put the average consumer hard pressed to buy any food, as the price goes up, if there is much on the shelves to buy. These will be dire times ahead for the whole world, as hyperinflation is nearing.
[...] Read entire article via infowars.com [...]
it times like these- this is where they release the dogs. In the great depression they would confiscate food from vendors and dump it in the river- and shoot at anyone who attempted to recover the food- now obama proposes to bulldoze neighborhoods- to artificially raise the value of real estate- looks like the whole fema camp theory is going to be implemented shortly. And for those of you who say, “Nah, its just a conspiracy theiry- the government would never hurt us” get ready for your whipping- look around- most prisoners or people under the “justice” ever, no agrarian society, social security money already spent- the tanks are coming…
The writer forgot one thing: perhaps the most important that has been bankrupting us: illegal aliens who have been costing us over $346 BILLION (YOU READ THAT CORRECTLY: BILLION) A YEAR! I truly believe that this was an agreement between Bush and Mexico and the globalists (Bush’s dad made a video where he says how they are going to make a One World Gov’t/Order) and Bush actually signed something “merging” us with Mexico and Canada but got caught at it before it could be implemented. The agenda is to make Unions (as in European Union, S. American Union, Asian Union, African Union, etc. and eventually combine all the Unions to make a One World Gov’t dictatorship! and the Elites want to RULE THE WORLD AND MAKE US INTO THEIR SLAVES! THEY HAVE TO BANKRUPT THE MIDDLE CLASS OF THE U.S. TO TAKE OVER AND THEY HAVE DONE THAT! WAKE UP AMERICA!!!
My dad is a Pole still living in US. He laughed upon my suggestion that US might be corrupt. His answer covered the fact that in fact US has pretty strong anti corruption laws. But this is only on the surface of the grander scheeme of things of this military industrial complex, run by insurance companies and held hostage by Wall St.
Micah 6:11 – Shall I count them pure with the wicked balances, and with the bag of deceitful weights?
Proverbs 20:23 – Divers weights are an abomination unto the LORD; and a false balance is not good
O I want to see real money that has real value and will be glad to see the currupt system fall
Deuteronomy 23:19 – Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury:
Ezekiel 22:12 – In thee have they taken gifts to shed blood; thou hast taken usury and increase, and thou hast greedily gained of thy neighbours by extortion, and hast forgotten me, saith the Lord GOD.
Sub-prime is one of the effects, not the cause. In the present structure of the economics, it is the demand and supply network of the market condition that has reached to the saturation point, not the financial system.
If it is the internal error of the financial system that has reached to the saturation point then there is no doubt that ending the FED or changing the global reserve currency will help humanity to overcome the crisis.
Nevertheless, if it is the demand and supply network of the market condition that has reached to the saturation point then there is a need to take precaution before the sudden meltdown of the global currency system. If you are interested to discuss this matter in-depth, please let me be informed. I have already written about the exact nature of the forthcoming collapse and it’s after shocks.
Please understand that there is no more time left for all of us to handle the situation. Whenever we are talking about the centralized financial system or the FED, we also must know that it is the forefathers of the Fed who gave birth to capitalism by funding the renaissance. Nevertheless, now their appointed term is over.
Karl Marx says, “Each stage is necessary, and therefore justified for the time and conditions to which it owes its origin. But in the face of new, higher conditions, which gradually develop in its own womb, it loses its validity and justification. It must give a way to a higher stage which will also in its turn decay and perish”.
Indeed, the great Renaissance of the 18th century was associated with the attractive character of capital and its birth time gravity. The forthcoming Renaissance of the 21st century will be associated with the repulsive character of capital and its death time gravity. In other words, the law of repulsion is connected with the law of detachment.
In future, the strong compressive wave of financial repulsion will give birth to a sudden change in the psychological velocity, density, pressure and temperature of the entire humanity and will spiritually move towards the absolute truth of the absolute science.
“The constitution of the Universe may be put in first place among all the natural things that can be known”. – Galileo
Note: The day of the collapse will be so horrible that every human being on earth will witness an unpredictable hyper (tension) attack in the brain cells that will kill the human greed forever. Only when the greed fulfills its need; the age of greed will be over. This is an absolute Truth that functions in nature in tune with human psyche.
This above change will occur within a single day when the appointed age of greed will witness a grinding halt on the ‘Day of Judgment’. It is very surplice to know that our ancient ages realized that only the death of money could become the beginning of character.
For a real time look at the numbers I find it disturbing to watch the Real time debt clock. The numbers are ridiculous. The underfunding of medicare, prescription plan, and social security is insurmountable. Using Our current GDP numbers as a guide it would take 107 years to break even.
Additionally Unfunded US gov. responsibility is increasing by 1 million every 11 seconds.
The financial markets, with the derivatives debacle hanging like the sword of Damocles over the entire system could collapse at any second and represents the single greatest threat to worldwide stability. When that shoe falls, 637 trillion dollars, It’s gonna hurt.
Thanks for posting your site to make others aware of their future financial concerns.
http://www.usdebtclock.org/
Thanks for posting. I’m sharing with my family.
You only forgot to mention the reckless spending on wars is rapidly making the World adverse to the US dollar, and US corporations, making everybody dump the dollar and US stocks. It’s NOT about Anti-Americanism, it’s about Anti-Warmongering, and Anti US Federal Corruption. And the fact the world now perceives as reality that 911 was actually an inside job, and that the perpetual War OF Terror can be translated as the perpetual War ON BS spending out the World. Therefore the complete CRASH will come sooner than expected.
God save this world!
I concur with all you’ve said. I only have one question. How does the Massachusetts Miracle impact these projections? Does it mean that the American voters are ready to step up and shoulder responsibility and thus mitigate the negative impacts by going ahead and pulling back from the brink and drastically shrinking government, then living with those consequences? Hmmmm….
for all my patriot friends and christian bible believers that KNOW JESUS IS GOD
buy a cookstove there are all kinds of new cookstoves on the market
I have the pioneer maid cookstove with warming closet and water heater jacket
and water container on the end
get chimney two inch insulated
and get yourself crossbows from http://www.excaliburcrossbow.com
we are going to need to survive this communist take over
wake up buy silver ( real money ) buy gold if you can afford to ( real money)
stop paying your dam credit cards the banks got BILLIONS IN BAILOUTS
and wake up
infowars.com
goodnewaboutgod.com
henrymakow.com
I am fourty three and raised four children alone for fifteen years
so what? you say HE WHO CLOSES HIS EARS TO THE CRY OF THE POOR will himself cry out and not be heard
north americans are nothing but MONEY LOVING GREEDY SELFISH SELF CENTRED DRINKING PARTYING PIGS
and they are blind to whats happening all around them
I AM A PATRIOT christian man
and I am single and live in the country
I will support my brothers if the time comes we have land for food
wood for heat
and we are here
Well, the second wave looks Aproximately the same order of magnitude as the first. [sub prime]. With all of the taxpayer money that was paid to the banks that they haven’t lent out, and they have still not been forced to realize losses on any of the sub prime, what are the chances that they can absorb most of this second wave with that money parked at the fed and keep extending and pretending for god knows how long ? They’ve already proven that they can keep this ponzi scheme afloat much longer than anyone so far has predicted.
Normally I read these articles and laugh at the “Doom & Gloom” all while saying, “The US has overcome these problems before with innovation”… But I’ve got to say, due to the reasons presented in this article—- As a nation—As a people—We’re in very big trouble…..
You have some very interesting and accurate observations, but I don’t necessarily concur with your conclusion. The American people are awakening. I think that there are going to be a lot of changes (for the better) made. If we can quickly pass the Fair Tax, we can then begin to work on how our government is spending money. Don’ minimize the revolution that is taking place now.
My, you’re quite the optimist, aren’t you?
I was talking to a friend here in the philippines this afternoon who has two young adult children who are both working full time jobs. He is worried that they will NEVER be able to have a home of their own or even ever an apartment. They both work for Call centers and their jobs USED to based in the USA. They are happy to have a job but they are only earning 13,000 pesos a month. That is about $300 !!!
The same exact job in the states is paying over $400 a week! The of living is less in the Philippines BUT things are NOT so cheap that you could have a home of your own. $300 a month is NOT very much money NO MATTER where in the world you live. The cost of gasoline is MORE here, about $4.00 a gallon. Going out to eat at McDonalds appears to cost less BUT the serving sizes are less so in the long run you pay the same. The wages for a McDonalds employee is about $7 a day so the employees can not even afford to eat at McDonalds!
The employers are making MILLIONS off of the cheap labor. The jobs that used to be in the states are NOW here but the BOSS MAN is making even MORE PROFIT. The employers do not have the misc. taxes to pay like they would in the states. The wages are obviously several hundred dollars or more LESS than the same job in the states. These employers have NOT reduced the cost of their products or services so they are really raking in the bucks.
The american people have lost their jobs and they will NOT see them return. And the people here who are now doing those same jobs are not much better off. The filipino employees are wise enough to understand they are being taken advantage of but there is nothing they can do. They need a job also, so complaining about the low wages does nothing. There are thousands that will take the job you do not want.
Many areas in the Philippines are incrediable wealthy. You see housing developments that the average american could not afford to live in. I see cars that cost tens of thousands of dollars on the road everyday. They have huge shopping malls that are bursting at the seams with stores in EVERY retail location. Unlike the mall in my home town of Cedar Rapids Iowa. The mall there looks like a GHOST TOWN.
The only people that are winning are the CORPORATIONS that are raking in huge profits while the little guy suffers.
Educator
Your article is informative with excellent data, comprehensive, and through in presenting the true situation in our country today.
Most students, when presented with what is happening are refusing to accept that such an economic situation of this magnitude is taking place in our country. Many are just waiting for a hand out.
With no jobs, loosing homes, and other material things, staying positive is difficult for young families trying to make ends meet.
TAX THE BANKS!
Hi, linked to your site from Alex Jones. Very sobering article and I concur with all of your common-sense points. I have been watching the situation in the States for the last 2 years. I have a question and would very much appreciate a response; How do you think the situation in the States will impact on the UK? I believe it will be profound but would like to get your opinion.
Regards,
Cary UK
Great article, up until the 20th point. “Evil” and “wickedness” and “blessed” are more concepts relating to religion, and not economics or justice. Fact of the matter is, to quote Robert Heinlein – “Never attribute to malice what can be explained by stupidity.” It’s not really evil that’s driven this situation, it’s stupidity.
Dear Jack:
Whatever makes you think this failure of our (non)-elected officials will take as much as one or two decades?? With the next wave of mortgage failures we may see “tent-cities” several times the size of the ones in Orange county, CA and Sacramento, CA in our own back yards in 2010.
I graduated from college in the 1980s with a degree in finance and everything that we were warned about has been coming true; devaluation of the dollar, the dumping of the dollar by other nations, federal debt that can never be paid, and so on. What is so reprehensible is that our congress for decades has known what has been happening and yet they would never stop the insane spending and debt levels. The coming collapse is more complicated that what I just mentioned but the Feds play the largest part of it.
~~~ Chuck S
Alexandria, Virginia
When the voters return incumbents to office 94% of the time that are doing a bad job, then you get bad government. People need to start replacing incumbents with legislators who will do a good job. The voters have no one to blame but themselves for returning war criminal incumbents to office.
Greetings.
Many good points were made in this article, and the last one is the most salient of all.
There are some who still deny the path that is leading to the end of this nation, decrying the ‘far-off’ ‘possibility’, that perhaps in 10 years, or 20, we MIGHT have to face the consequenses…
I realize that this assesment from the author’s standpoint is purely economic, and discounts the geo-political decisions made in the past 60 years or so by the ‘leaders’ in this nation of mine.
Such things as Iran-Contra (‘war on drugs), 9/11 (uh-huh, YOU know the truth, but can’t mention it here!), the ‘war on terror’ (oh, yeah, war on an EMOTION works for most!), and the emnity with which the entire REST of the world regards us, given our actions to date…
Even the author believes that there will be a ‘partial’ recovery. I respectfully DISAGREE. This has been coming for a LONG time.
I don’t know, precisely, when the inevitable collapse actually STARTED, but I am led to believe that the Kissinger/Nixon ‘OPEC’ accords were the lighting of the fuse…
Good luck, and may God be with you.
Thank God for HEAVEN !!
I agree with all the facts in this article but I don’t agree with the attitude that it is too late to do anything about it. I don’t see Americans as deer in the headlights of an oncomming catastrophe because there is a movement afoot in America to put things right. The author would do us a big favor if he could show us that he is more than just a number cruncher – that is to say outline what has to be done, no matter how radical, to avert an economic black hole, whether possible or not in his mind. There are other times in history when the impossible was accomplished. If the left could get the countries of the world to try to save the planet from the HOAX of manmade global warming why can’t America be mobilized to save the economy when armed with the truth. Or are possible solutions just too daunting a task for an unimaginative, defeatist number cruncher? Granted, we do need to see the tidal wave comming but not to say “Oh woahis me,” but in order to do something about it!
Great article! I think Americas eyes have been bigger than their wallet for too long, and we are begining to see the results of it.
I like how the chart shows the debt going through the roof about the time Reagan became President. Yeah, raise spending and cut taxes, especially for the rich elites seemed to work out pretty well for us.
I think that the U.K. is headed for similar trouble, but of course the focus on the article was the U.S.
We can certainly hope that what happened in Massachusetts will help in Washington, but the truth is that both parties have been fumbling the ball for decades.
“justice forall” illegal immigration is not the cause of the financial breakdown in the united states, in fact it plays no role at all. The $300 billion number is a SMALL portion of all funds used in the united states, and what you are not taking into consideration is the money being spent in the economy by illegals. I in no way support illegal immigration, but the constant argument that if illegal immigration stopped all the problems in the united states would be solved. It is not the case. The illegals work for cheaper rates and even less than minimum wage saving the businesses they work for millions of dollars. The illegals pay rent, electric, buy food, go to movies, buy clothes, and everything else the general population does.
with the US economy being an economy based almost solely on the service industry then it needs all the spending consumers it can find, even illegal. So removing 30-million or so illegals from the country is also removing 30-million spenders. If my calculations are right we can assume each illegal spends $100.00 a week (and with the cost of living I can assume $100.00 a week is really low estimate), if there are 30-million illegals then they are ADDING $1.56 Billion to the economy each year. So while they are adding that $1.56 billion they are also creating more jobs by spending that money on good and services, and by creating more jobs then more people are able to buy houses or turn their new jobs into spending within the service sector. It is a vicious but true fact of the economy.
The main issue with the economy is that it is almost solely an economy made up of the service sector. This last “crash” has shaken many Americans to their core and they have reevaluated how they spend money, this is why savings have increased. The American’s will not easily turn back to the consumer’s they once were. So because American’s have chosen to not spend and live week to week the economy is in danger. But not only does the greedy, money happy, overspending habits of the American’s support the US economy it also supports large exporters such as China.
So if the American’s do not easily turn back to their overspending and debt driven ways not only does the US economy teeter, so does the world economy. America needs to find a new way for its economy because the spending habits of the people have changed and can not support a service industry focused economy. I do not think that change will happen fast enough.
this is fixable, we need to put america back to work. take it from reagan’s playbook, print a trillion dollars and put all in defense spending. u can’t outsource an f18 super hornet to china,and building those things pays alot better than hanging solar panels and cutting grass (green jobs).reagan was one smart sob
This is nothing that cannot be resolved by a) merging the 50 separate states into eight regional superstates run far more efficiently for taxpayers and b) raising income taxes back to the level of the Eisenhower era, the time when the great American middle class was formed. Why do we need 50 separate tax codes, governors, state legislators, etc…it’s ridiculous and far too inefficient economically. Europe and Asia have figured this out and are benefitting. Also, the current income tax laws favor the extremely rich at the expense of the middle class… that should change.
This article fails to show what Americans are doing to avoid this from happening. Many Americans are moving to other countries. Check those statistics.
Sure we can fix it..if we give up all federal payouts ie social security, medicare, medicade slash 80% of federal jobs and pensions (including all past and present politicians) ,do away with most federal agencies, resend all unfunded mandates to the states, stop educating and medicating illegal aliens and poor people END ALL FOREIGN AID and pull out of all military bases around the world including Iraq and Afghanistan.. maybe we could recover. Otherwise, life is about to get hard. I just hope some of the clowns in government and banking who caused this mess wanders into the tent city that I’m livin in!
This should be a New York Times headline, but it won’t be.
I would like to see Dodd, Franks, Wall Street, The Bank CEO’s, and the Short Traders in PRISON.
How long has Ron Paul been warning us of this BIG PROBLEM.Time To file the PETITION OF REDRESS TO OUR GOVT.IMMEDIATLY!STOP the TRAITORS in office,they are still destroying our COUNTRY as we read this Article.Like its some kinda game to them
Start drilling our own oil.Build Nuclear power plants,Build oil refineries,All made with American steel&products,with AMERICAN labor.Impose strict tariffs on imported goods.End the Mexican Invasion,send every last one packing.Thats the way we are going to put this Country back.Thats the only way.End the tree hugging PC BULLShiss Too.That costs us billions too.Get our proud soldiers back home to protect us all!
Just remember Folks that our wonderful Politicians have created 99.9% of this!
I liked what you had to say TimeTravellor and agree with most of it except your argument is very flawed when you lay all the blame on the current Presidents cabinet. You seem to completely be in a state of denial of George W “Dumb ass” Bush, Cheney, and Rowe.
Please remember that the chairman of the fed was appointed by “W” and the Treasury Sec is a hold over from Bush, and if you look at the little Chart the main deficit spending was ballooned the most during Republican administrations. Now People want to lay all the latest debt on Obama but the pain truth is that over 50% of his debt is left overs from George “W” the idiot and his shady accounting practices, and his little war mongering which until Obama was never factored into the debt.
You know George “W” the man who undid everything when he took office. The US had started running a surplus and was actually starting to pay down the deficit, but little George was unhappy with his allowance so he wrote rubber check after rubber check ?
Now, I hate Obama’s spending just as much as everyone but the one thing I hate are individuals who write from a state of denial in regards to shared responsibility of past administrations. Especially the most recent past idiot who spent 8 years being totally clueless!