Radical leftists have been catapulted to power in Greece, and that means that the European financial crisis has just entered a dangerous new phase. Syriza, which is actually an acronym for “Coalition of the Radical Left” in Greek, has 36 percent of the total vote with approximately 80 percent of the polling stations reporting. The current governing party, New Democracy, only has 28 percent of the vote. Syriza leader Alexis Tsipras is promising to roll back a whole host of austerity measures that were imposed on Greece by the EU, and his primary campaign slogan was “hope is on the way”. Hmmm – that sounds a bit familiar. Clearly, the Greek population is fed up with the EU after years of austerity and depression-like conditions. At this point, the unemployment rate in Greece is sitting at 25.8 percent, and the Greek economy is approximately 25 percent smaller than it was just six years ago. The people of Greece are desperate for things to get better, and so they have turned to the radical leftists. Unfortunately, things may be about to get a whole lot worse.
Once they formally have control of the government, Syriza plans to call for a European debt conference during which they plan to demand that the repayment terms of their debts be renegotiated. But the rest of Europe appears to be highly resistant to any renegotiation – especially Germany.
Syriza says that it does not plan to unilaterally pull Greece out of the eurozone, and that it also intends for Greece to continue to use the euro.
But what happens if Germany will not budge?
Syriza’s entire campaign was based on promises to end austerity. If international creditors refuse to negotiate and continue to insist that Greece abide by the austerity measures that were previously put in place, what will Syriza do?
Will Syriza back down and lose all future credibility with Greek voters?
Since 2010, the Greek people have endured a seemingly endless parade of wage reductions, pension cuts, tax increases and government budget cutbacks.
The Greek people just want things to go back to the way that they used to be, and they are counting on Syriza to deliver.
Unfortunately for Syriza, delivering on those promises is not going to be easy. They may be faced with a choice of either submitting to the demands of their international creditors or choosing to leave the eurozone altogether.
And if Greece does leave the eurozone, the consequences for all of Europe could be catastrophic…
Syriza risks overplaying its hand, said International Capital Strategies’ Rediker. “Given that the ECB controls the liquidity of the Greek banking system, and also serves as its regulator through the SSM (Single Supervisory Mechanism), going toe-to-toe with the ECB is one battle that could end very badly for the Greek government.”
If the ECB were to stop funding the liquidity of the Greek banks, the banks could collapse—an event that could lead to Greece abandoning the euro and printing its own money once more.
Milios didn’t believe it would come to that, saying, “No one wants a collapse of banks in the euro zone. This is going to be Lehman squared or to the tenth. No one wants to jeopardize the future of the euro zone.”
Hopefully cooler heads will prevail, because one bad move could set off a meltdown of the entire European financial system.
Even before the Greek election, the euro was already falling like a rock and economic conditions all over Europe were already getting worse.
So why would the Greeks risk pushing Europe to the brink of utter disaster?
Well, it is because economic conditions in Greece have been absolutely hellish for years and they are sick and tired of it.
For example, the BBC is reporting that many married women have become so desperate to find work in Greece that they are literally begging to work in brothels…
Some who have children and are struggling to support them have turned to sex work, to put food on the table.
Further north, in Larissa, Soula Alevridou, who owns a legal brothel, says the number of married women coming to her looking for work has doubled in the last five years.
“They plead and plead but as a legal brothel we cannot employ married women,” she says. “It’s illegal. So eventually they end up as prostitutes on the streets.”
When people get this desperate, they do desperate things – like voting radical leftists into power.
But Greece might just be the beginning. Surveys show that the popularity of the EU is plummeting all over Europe. Just check out the following excerpt from a recent Telegraph article…
Europe is being swept by a wave of popular disenchantment and revolt against mainstream political parties and the European Union.
In 2007, a majority of Europeans – 52 per cent – trusted the EU. That level of trust has now fallen to a third.
Once, Britain’s Euroscepticism was the exception, and was seen as the biggest threat to the future of the EU.
Now, other countries pose a far bigger danger thanks to the political discontents unleashed by the euro.
At this point, the future of the eurozone is in serious jeopardy.
I have a feeling that major changes in Europe are on the way which are going to shock the planet.
Meanwhile, the rest of the globe continues to slide toward another major financial crisis as well.
So many of the things that preceded the last financial crisis are happening once again. This includes a massive crash in the price of oil. Most people have absolutely no idea how critical the price of oil is to global financial markets. I like how Gerald Celente put it during an interview the other day…
I began getting recognition as a trend forecaster in 1987. The Wall Street Journal covered my forecast. I said, ‘1987 would be the year it all collapses.’ I said, ‘There will be a stock market crash.’ One of the fundamentals I was looking at were the crashing oil prices in 1986.
Well, we see crashing oil prices today and the banks are much more concentrated and levered up in the oil patch than they were in 1987. From Goldman Sachs to Morgan Stanley banks have been involved in major debt financing, derivatives and energy transactions. But much of this debt has not been sold to investors and now we are going to start seeing some big defaults.
By itself, the Greek election would be a significant crisis.
But combined with all of the other economic and geopolitical problems that are erupting all over the planet, it looks like the conditions for a “perfect storm” are rapidly coming together.
Unfortunately, the overall global economy is in far worse shape today than it was just prior to the last major financial crisis.
This time around, the consequences might just be far more dramatic than most people would ever dare to imagine.
If you were about to take a final exam, would you have more hope or more fear if you didn’t understand any of the questions and you had not prepared for the test at all? I think that virtually all of us have had dreams where we show up for an exam that we have not studied for. Those dreams can be pretty terrifying. And of course if you were ever in such a situation in real life, you probably did very, very poorly on that test. The reason I have brought up this hypothetical is to make a point. My point is that there is hope in understanding what is ahead of us, and there is hope in getting prepared. Since I started The Economic Collapse Blog back in 2009, there have always been a few people that have accused me of spreading fear. That frustrates me, because what I am actually doing is the exact opposite of that. When a hurricane is approaching, is it “spreading fear” to tell people to board up their windows? Of course not. In fact, you just might save someone’s life. Or if you were walking down the street one day and you saw someone that wasn’t looking and was about to step out into the road in front of a bus, what would the rational thing to do be? Anyone that has any sense of compassion would yell out and warn that other person to stay back. Yes, that other individual may be startled for a moment, but in the end you will be thanked warmly for saving that person from major injury or worse. Well, as a nation we are about to be slammed by the hardest times that any of us have ever experienced. If we care about those around us, we should be sounding the alarm.
Since 2009, I have published 1,211 articles on the coming economic collapse on my website. Some people assume that I must be filled with worry, bitterness and fear because I am constantly dealing with such deeply disturbing issues.
But that is not the case at all.
There is nothing that I lose sleep over, and I don’t spend my time worrying about anything. Yes, my analysis of the global financial system has completely convinced me that an absolutely horrific economic collapse is in our future. But understanding what is happening helps me to calmly make plans for the years ahead, and working hard to prepare for what is coming gives me hope that my family and I will be able to weather the storm.
I do not believe in living my life in a state of fear, and I do not want anything that I write to ever cause fear in my readers. The ancient Hebrew greeting “Shalom” is roughly translated as “peace” or “completeness”, and that is what we are constantly pursuing in my household. My wife and I know that incredibly challenging times are coming, but we also know who we are, what our purpose is, and where we are headed. We also believe that the greatest chapters of our lives are ahead even in the midst of all the chaos that is coming.
When times are the darkest, that is when light is needed the most. Just think about it. When you look back over history, what heroes do you admire the most? If you truly think about it, almost all of those heroes arose during times of great adversity and conflict.
The years ahead can be a time of great adventure for you, or they can seem like hell on Earth. It all depends on how you respond to your circumstances.
Do you want to know who is going to respond to the years ahead with fear, panic and depression?
The millions of people that have absolutely no idea what is coming and have made absolutely no preparations are going to be absolutely blindsided by the coming economic collapse. Just like the 1930s, we are going to see people jumping out of windows and jumping in front of trains. Others will sink into a state of despair so deep that nobody will ever be able to shake them out of it.
It doesn’t have to be that way.
Over the past five years I have spent thousands of hours studying the coming economic collapse. In my articles you can find tens of thousands of facts and statistics that prove that the U.S. economy is hurtling toward oblivion.
It is not always the most pleasant thing to write about, but it is the truth. And that is what matters. If you believe that I am wrong, prove it to me. I work very hard to put out the most accurate information that I possibly can. So if you can prove that I am wrong, I will change my mind.
But of course that is not going to happen. As I have stated previously, anyone with half a brain should be able to see that we are living in the greatest debt bubble in human history. Anyone with half a brain should be able to see that the “too big to fail” banks are being extraordinarily reckless (derivatives, etc.). Anyone with half a brain should be able to see that our formerly great manufacturing cities are being transformed into crime-infested hellholes. Anyone with half a brain should be able to see that the middle class is dying. Anyone with half a brain should be able to see that the exact same patterns that led up to the great financial crisis of 2008 are happening again. Anyone with half a brain should be able to see that we simply cannot consume far more wealth than we produce as a nation indefinitely. Anyone with half a brain should be able to see that the incredibly foolish decisions that our politicians have been making for decades have placed us on a road to utter disaster.
So it doesn’t take anyone special to do what I am doing. I am just a “watchman on the wall” sounding the alarm the best that I can. And there are lots of others that are doing the same thing. We are deeply concerned about where this nation is heading, and we have been pleading with our leaders to do something about it for a long time but they have not listened to us.
Since our leaders just continue doing “business as usual”, there is not going to be a solution to our problems on the national level.
So that is why I am encouraging people to get prepared for the hard times that are coming on a family level and a community level.
Unfortunately, it seems like some people always have an excuse for not getting prepared. In fact, a few have even gone so far as to accuse me of being “anti-faith” for suggesting that people actually get off their couches and do something to help their families deal with the nightmare on the horizon. They seem to have the attitude that we should all just sit back and wait for God to do everything for us.
So I am not quite sure why those people get up in the morning and go to work, since they should just “trust God” to deposit paychecks into their banks. And I am not quite sure why they ever fill up the tanks of their vehicles with gasoline, because they should be able to “trust God” to put more gas there when they need it.
For now, let me just state that what those people are suggesting is the exact opposite of what the Bible teaches. Trusting God is not about sitting back and doing nothing. In the Scriptures, we are told that faith is about stepping out and taking action on what God has revealed to us. That includes working hard, being wise and providing for our families. For example, just check out Proverbs 6:6-11…
Go to the ant, you sluggard! Consider her ways and be wise. Which, having no guide, overseer, or ruler, provides her bread in the summer, and gathers her food in the harvest.
How long will you sleep, O sluggard? When will you arise out of your sleep? Yet a little sleep, a little slumber, a little folding of the hands to sleep— so will your poverty come upon you like a stalker, and your need as an armed man.
In the end, each one of us needs to make the decisions that we feel are best for our own families.
So that is why it is so incredibly important not to let someone else do your thinking for you.
In America today, the average person watches 153 hours of television a month. In addition to that, we also spend countless hours watching movies, playing video games, listening to music, reading books and surfing the Internet.
What most Americans don’t realize is that there are just six giant corporations that control almost all of that content, and that makes them immensely powerful.
These giant media corporations are constantly manipulating our attitudes, opinions and beliefs. And at this point most Americans seem quite content to remain “plugged into the matrix” and to allow corrupt corporate executives somewhere to do their thinking for them.
I urge you to break free from that system.
Do your own research and do your own thinking.
Don’t take what I say or what anyone else says as truth without critically examining it yourself. This can be difficult at first, because in this nation our young people are no longer trained to think critically. Instead, we are trained to just blindly accept whatever information the system feeds us.
If we can’t even cut federal spending by 2.4 percent without much of the country throwing an absolute hissy fit, then what hope does America have? All of this whining and crying about the sequester is absolutely disgraceful. The truth is that even if the sequester goes into effect, the U.S. government will still take in more money than ever before in 2013 and it will still spend more money than ever before in 2013. So it is a bit disingenuous to call what is about to happen “a spending cut”, but for the sake of argument let’s concede that point. Even if the budget really was being “cut” by 85 billion dollars, that only would only amount to a “cut” of 2.4 percent to federal spending. It would barely make a dent in the federal budget deficit for 2013. The U.S. government would still accumulate about as much new debt in fiscal year 2013 as it did in all the years from the inauguration of George Washington to the inauguration of Ronald Reagan combined. Our debt to GDP ratio would continue to soar. The sequester cuts would essentially only be a minor bump on the road to financial oblivion. But if you listen to Barack Obama and his allies, they would have you believe that we are facing a great national crisis because of these impending cuts. They would have you believe that hundreds of thousands of people will lose their jobs and that many government agencies will no longer be able to operate effectively. They would have you believe that “granny won’t get her lunch” and “roofs blown off by Hurricane Sandy won’t get repaired”. Well, if all of that is true, then what in the world would our country look like if we actually cut a trillion dollars from the federal budget this year and started living within our means?
Have you ever known people that are already hundreds of thousands of dollars in debt and yet go out and regularly blow thousands more dollars on wild shopping sprees?
Such debt addicts may be very proud of their new homes, their new cars, their new clothes and all of their fancy electronic gadgets, but it was all purchased with debt. When a “day of reckoning” finally arrives, many debt addicts lose absolutely everything and end up in the street.
That is what America is like today.
Our politicians like to show off all of the stuff that our government is spending money on, but the truth is that we are spending gigantic mountains of money that we simply do not have. We are literally stealing from our kids and our grandkids so that we can continue to enjoy a massively inflated standard of living that we have not earned.
But we can’t stop ourselves. Americans are absolutely addicted to big government. They want a gigantic government that sends out free money to more than 100 million Americans every month, but they absolutely do not want to pay for it. They would rather steal money from their children and their grandchildren to pay for it.
This has got to stop, because we are literally destroying the future of this country.
If Americans really want a massively bloated government that takes care of everyone from the cradle to the grave then they should pay for it.
If Americans don’t want to pay for it, then they should reduce the size of the government to a level where they are willing to pay for it.
But stealing money from future generations of Americans to pay our bills is absolutely disgraceful.
As I talked about in a previous article, we are stealing more than 100 million dollars from our children and our grandchildren every single hour of every single day.
Is there anyone out there that is willing to stand up and defend that kind of theft?
But the vast majority of Americans don’t want to do anything to stop it, because they don’t want to harm “the economy” (i.e. our ridiculously bloated standard of living).
Will the sequester cuts hurt the economy a bit?
Government spending cuts always hurt the economy.
If we raised taxes to help pay the bills that the federal government has been racking up, would that hurt the economy?
Tax increases always hurt the economy.
But if we continue on the path that we are today, America is doomed.
The U.S. national debt is the biggest single debt in the history of the world. It is now more than 16.6 trillion dollars, and it has gotten more than 23 times larger since Jimmy Carter first entered the White House.
If our politicians suddenly decided to go to a balanced budget today, our debt-fueled “bubble economy” would disappear and we would immediately plunge into a deep economic depression.
Do the American people have the character to be able to handle that kind of an “adjustment” to our standard of living?
Of course not.
That is why so many of our politicians are scared to death of doing anything about the debt.
And even these small sequester “cuts” are freaking everyone out. Many of our politicians and many in the mainstream media are openly declaring that “the sky is falling”. Just check out the following short excerpt from a recent New York Times article…
The owner of a Missouri smokehouse that makes beef jerky is worried about a slowdown in food safety inspections. A Montana school district is drawing up a list of teachers who could face layoffs. Officials at an Arizona border station fear that lines to cross the border could lengthen. And if Olympic National Park in Washington cannot hire enough workers to plow backcountry trails, they may stay closed until the snow melts in July.
But that is nothing compared to what others are saying. CNN is declaring that if the sequester cuts happen, “granny won’t get her lunch” and “roofs blown off by Hurricane Sandy won’t get repaired”.
And check out these ominous warnings from Barack Obama about what will happen if the sequester cuts go into effect…
“Emergency responders like the ones who are here today — their ability to help communities respond to and recover from disasters will be degraded. Border Patrol agents will see their hours reduced. FBI agents will be furloughed. Federal prosecutors will have to close cases and let criminals go. Air traffic controllers and airport security will see cutbacks, which means more delays at airports across the country. Thousands of teachers and educators will be laid off. Tens of thousands of parents will have to scramble to find childcare for their kids. Hundreds of thousands of Americans will lose access to primary care and preventive care like flu vaccinations and cancer screenings.”
Immigration and Customs Enforcement officials have released “several hundred” immigrants from deportation centers across the country, saying the move is an effort to cut costs ahead of budget cuts due to hit later this week.
Announcing the news Tuesday, ICE officials said that the immigrants were released under supervision and continue to face deportation. After reviewing hundreds of cases, those released were considered low-risk and “noncriminal,” officials said.
The claims about the sequester cuts just seem to get more ridiculous with each passing day. Homeland Security Secretary Janet Napolitano is warning that the cuts will make the U.S. more vulnerable to terrorist attacks, and Obama recently decided not to send an aircraft carrier to the Persian Gulf because of “budget concerns“.
Apparently he sees no problem with using the U.S. military to score political points.
And Federal Reserve Chairman Ben Bernanke says that the budget cuts will result in “less actual deficit reduction in the short run”.
How stupid do they think we all are?
Yes, the sequester cuts will have an impact on the economy, but they won’t cause the sky to fall.
The following is what the CBO says the economic impact of the cuts is likely to be…
The Congressional Budget Office estimates the cuts will cost 750,000 jobs and hit growth by 0.6 percentage points, assuming the cuts remain in effect for the remainder of the fiscal year. Some economists expect a slightly bigger impact.
Remember, these are actually very small cuts.
In fact, according to U.S. Representative Lynn Jenkins, the U.S. government will actually be spending more money in 2013 than it did in 2012 even if the sequester cuts go into effect…
“There’s a fact that says we are going to take in more money this fiscal year than we have ever taken in before,” Jenkins said. “The budget this year, we will spend more money this year than we spent last year even if the sequester goes into effect. We will spend more money even if the sequester goes into effect.”
So why is everyone whining and crying over such a very small amount of money?
If you want to get upset about something, why not get upset about things that are increasing our debt by trillions of dollars?
For example, according to a Government Accountability Office report that was just released, Obamacare is going to cause the federal debt to rise by $6.2 trillion.
Why aren’t more people getting upset over that?
Sadly, it is because America is a debt addict. Most Americans don’t really care much when federal spending skyrockets out of control, but if anyone tries to slow down the spending a little bit they throw hissy fits.
And please don’t tell me that “the big government Republicans” are much better than “the big government Democrats” on budget issues. The Republicans have caved in and have gone along with all of this wild spending every single time.
On March 27th, they will have another opportunity to do something. That is when the current continuing resolution expires.
At that time, the Republicans could refuse to pass anything but a balanced budget.
Or they could at least refuse to pass anything except a budget that would cut the federal budget deficit in half.
But they won’t do anything once again. They will cave in and go along with the status quo because they are cowards.
So we will continue to rip off future generations to fuel our current bloated standard of living.
Thomas Jefferson understood that government borrowing is theft from future generations. He once made the following statement….
And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.
Shame on you Democrats.
Shame on you Republicans.
Shame on you America.
You are destroying the future of America for your own selfish reasons.
If future generations get the chance, they will look back on what you did to them and they will curse you for it.
Like I said, it would mean a deep economic depression, and it would also likely mean a tremendous amount of societal chaos.
Even now, while we are still living in the boom times, things are really starting to get crazy out there. Just check out what is going on in Oakland…
Oakland’s crime problems have gotten so bad that some people aren’t even bothering to call the cops anymore; instead, they’re trying to solve and prevent crimes themselves.
KPIX 5 cameras caught up with a half dozen neighbors in East Oakland’s Arcadia Park neighborhood Monday as they walked the streets on the lookout for crime. The vigilance has never seemed more necessary than now; 25 homes in the neighborhood have been burglarized over the last two months alone.
In a neighborhood that has started to feel like the wild west, people have even started posting “wanted” signs.
“You have to walk around in your house with a gun to feel safe here,” said Alaska Tarvins of the Arcadia Park Board of Directors.
If this is how bad things are now, how bad will they be when a day of reckoning for our economy arrives?
And a day of reckoning is coming.
Our politicians can try to keep kicking the can down the road for as long as they can, but eventually time will run out. Just take a look at what is happening in Greece and Spain. Meanwhile, all of this can kicking is just making the eventual crisis even worse.
We can borrow our way to prosperity for a while, but in the end there is always a very bitter price to pay for doing so.
I would love to tell you that there is a chance that all of this will be turned around, but the truth is that all of this whining and crying about the sequester shows that America is doomed.
Do you have friends, neighbors and relatives that can’t find work? Well, unfortunately the current U.S. jobs famine is about to get a whole lot worse. Right now there are approximately 13.9 million unemployed Americans. That does not count those that “are not looking for work”. That does not count those that are working part-time jobs but that are desperate for full-time work. The truth is that we need tens of millions more full-time jobs in order to give one to everyone that wants one. Sadly, the long-term trends that have caused this mess continue to get worse. Unless truly dramatic changes are made, the U.S. economy is going to continue to bleed jobs and that is going to suck the hope right out of this country. It is time to wake up America! It is not a big mystery why we don’t have enough jobs. But sadly, very few of our leaders are talking about the real issues.
Something has got to be done. Unemployment is already at epidemic levels, and this country can’t afford for things to get much worse. Just check out how a recent article in The Wall Street Journal summarized our current predicament….
There are more unemployed than the combined populations of Wyoming, Vermont, North Dakota, Alaska, South Dakota, Delaware, Montana, Rhode Island, Hawaii, Maine, New Hampshire, Idaho and the District of Columbia.
If they were a country, the 13.9 million unemployed Americans would be the 68th largest country in the world, bigger than the population of Greece or Portugal (each of which has 10.8 million people) and more than twice the population of Norway (4.7 million.)
Isn’t that incredible?
The number of unemployed Americans is larger than the entire population of Greece.
There are millions of Americans that will be sitting at home in front of their televisions tonight wondering why they can’t find jobs. Last month, only 58.1% of Americans over the age of 16 were employed. Our economy should be able to do far better than that.
All over the Internet there are stories of people that have sent out hundreds (or even thousands) of resumes and nobody even wants to interview them. One recent survey found that approximately 80 percent of all Americans believe that it is “difficult” to find a job right now.
Unfortunately, things are going to get much, much worse before all this is over.
The following are 10 very obvious reasons why the devastating U.S. jobs famine is going to suck the hope right out of America….
#1 Our politicians simply do not care that America is bleeding jobs. Amazingly, even with rampant unemployment plaguing this nation, Obama administration officials continue to declare that it is okay that we are losing manufacturing jobs because a lot of cheaper products are things that “we don’t want to make in America” anyway. The following is what U.S. Trade Representative Ron Kirk told Tim Robertson of the Huffington Post the other day….
Let’s increase our competitiveness… the reality is about half of our imports, our trade deficit is because of how much oil [we import], so you take that out of the equation, you look at what percentage of it are things that frankly, we don’t want to make in America, you know, cheaper products, low-skill jobs that frankly college kids that are graduating from, you know, UC Cal and Hastings [don’t want], but what we do want is to capture those next generation jobs and build on our investments in our young people, our education infrastructure.
The economic negligence that recent administrations have demonstrated has been absolutely mind boggling. Blue collar male workers in particular are being absolutely devastated by the loss of manufacturing jobs. Back in 1967, 97 percent of men with a high school degree between the ages of 30 and 50 had jobs. Today, that figure is down to 76 percent.
#2 The Obama administration has now instituted a policy of “backdoor amnesty” for illegal immigrants by executive fiat. Janet Napolitano has announced that from now on there will be a case-by-case review of all deportation cases. Cases involving criminals will be prioritized and most others will be thrown out. A list of 19 factors that will allow government officials to use “prosecutorial discretion” in immigration cases has been distributed. Recently, I listed a few of those “factors” on The American Dream website….
-arrival in the U.S. as a young child
-actively “pursuing an education”
-serving or served in the U.S. military
-spouse of someone in the U.S. military
-18 years old or younger
-pregnant or nursing
-victim of a “serious crime”
-serious disability or health problem
-caring for a family member with a serious disability or health problem
Obviously, it is not going to be too difficult for most illegal immigrants to fit into at least one of those categories.
On top of everything else the Obama administration has announced that it will now allow illegal immigrants to apply for work permits….
Illegal aliens living in the United States typically don’t apply for work permits for fear of deportation, but under the new policy, they could apply for work permits if granted deferred action or parole and compete with 22 million Americans who can’t find a full-time job.
So now blue collar Americans workers will have even more competition for the dwindling number of jobs.
#3 State and local governments all over the country are dead broke, and an atmosphere of austerity is sweeping the nation. Right now state and local governments are slashing jobs at an unprecedented rate.
In the past, government jobs were considered to be very secure and they definitely paid a lot higher than average. But now that era is coming to an end, at least on the state and local government levels.
According to the Center on Budget and Policy Priorities, state and local governments have eliminated more than half a million jobs since August 2008. UBS Investment Research is projecting that state and local governments in the U.S. will cut 450,000 more jobs by the end of 2012.
#4 U.S. businesses are being absolutely crushed by mountains of nightmarish regulations, and yet the federal government, the state governments and local governments just continue to pile them on. For example, the U.S. Food and Drug Administration is projecting that the food service industry will have to spend an additional 14 million hours every single year just to comply with new federal regulations that mandate that all vending machine operators and chain restaurants must label all products that they sell with a calorie count in a location visible to the consumer. Due to these kinds of ridiculous regulations, many business owners have simply given up and many other potential business owners figure that owning a business is just not worth the hassle.
#5 As I have written about so many times before, the “global economy” is really bad for American workers. When we merged our economy with the economies of nations where it is legal to pay slave labor wages, we made it inevitable that we would start losing massive amounts of jobs.
Why would a giant corporation pay a U.S. worker 10 to 20 times as much as a worker on the other side of the globe? Investors actually expect big companies to have an “outsourcing” strategy today. When more jobs get shipped out of the country, profits go up, stock prices go up and executive bonuses go up.
Big corporations don’t exist to provide you with jobs. They exist to maximize shareholder wealth. If taking your job away and giving it to someone in Asia will make more money for them, then that it exactly what they are going to do.
#6 Unfair trade is absolutely killing our economy. It would be one thing if the U.S. was running a massive trade deficit solely because we were incompetent. But the truth is that a big factor is that a number of our “trade partners” are economic predators that are purposely trying to prey on us.
China massively subsidizes their biggest corporations, they brazenly steal technology from anyone that they can, they openly manipulate exchange rates and they allow their workers to be paid slave labor wages.
Today, we spend about 4 dollars on imports from China for every 1 dollar that China spends on imports from us. China now even makes more beer than we do. Even the new Martin Luther King, Jr. Memorial on the National Mall was made in China.
Until our politicians start insisting on a level playing field, all of this is going to continue.
#7 Small businesses are traditionally one of the primary engines of job growth in this country. But right now, small businesses all over America are having a really hard time getting anyone to loan them money. A big reason for this is that the Federal Reserve is actually paying banks not to make loans. Unfortunately, if small businesses can’t get the money that they need, then they can’t hire people.
#8 A lot of people may not want to hear this, but businesses in the United States are being absolutely taxed into oblivion. The U.S. now has the highest corporate tax rate in the world, but that is only a very small part of the story.
Michael Fleischer, the President of Bogen Communications, wrote an op-ed last year for the Wall Street Journal entitled “Why I’m Not Hiring”. The following is how Paul Hollrah of Family Security Matters summarized the nightmarish taxes that are imposed when Fleischer hires a new worker….
According to Fleischer, Sally grosses $59,000 a year, which shrinks to less than $44,000 after taxes and other payroll deductions. The $15,311 deducted from Sally’s gross pay is comprised of New Jersey state income tax: $1,893; Social Security taxes: $3,661; state unemployment insurance: $126; disability insurance: $149; Medicare insurance: $856; federal withholding tax: $6,250; and her share of medical and dental insurance: $2,376. Roughly 25.9 percent of Sally’s income is siphoned off by Washington and Trenton before she receives her paychecks.
But then there are the additional costs of employing Sally. In addition to her gross salary, her employer must pay the lion’s share of her healthcare insurance premiums: $9,561; life and other insurance premiums: $153; federal unemployment insurance: $56; disability insurance: $149; worker’s comp insurance: $300; New Jersey state unemployment insurance: $505; Medicare insurance: $856; and the employer’s share of Social Security taxes: $3,661.
Over and above her gross salary, Bogen Communications must pay an additional $15,241 in benefits and state and federal taxes, bringing the total cost of employing Sally to approximately $74,241 per year. Sally gets to keep $43,689, or just 58.8% of that total.
After reading all that, can you really blame business owners for not wanting to hire additional workers?
#9 The national debt is like a giant albatross around the neck of the economy. The U.S. national debt has increased by more than 4 trillion dollars since Barack Obama took office. The rampant government spending that has been going on has not done much to create new jobs, but it will be a massive burden that will weigh down economic growth for many years to come.
When a nation is drowning in debt, a tremendous amount of economic resources must go to servicing that debt. Right now, hundreds of billions of dollars a year that could be used to build up our economy are instead being used to pay interest on the national debt. If interest rates go up significantly, we could soon be paying over a trillion dollars a year just in interest on the national debt.
#10 Right now America is very deeply divided and a tremendous sense of pessimism has set in. One recent survey found that 48 percent of Americans believe that it is likely that another great Depression will begin within the next 12 months. With such a negative feeling in the air, it is going to make it even less likely that business owners will be in the mood to hire people.
I know that I pick on Detroit a lot, but it really is a microcosm of what is happening to America. The following video contains some absolutely amazing footage of the ruins of Detroit….
Sadly, what is happening to Detroit is happening in hundreds of other communities across the United States.
All over America, neighborhoods that were once teeming with hope and prosperity are now falling apart. Hopelessness is rampant and it is spreading. The number of Americans on food stamps has increased 74% since 2007. If not for our increasingly overwhelmed “safety net”, we would already have mass rioting in the streets.
Sadly, we are already seeing all sorts of signs that society is collapsing. As the economy continues to fall apart, the violence in our neighborhoods is going to get even worse.
Moments before she was slain last week on Chicago’s Southwest Side, 17-year-old Charinez Jefferson begged the gunman not to shoot because she was pregnant, prosecutors said today.
Despite her plea, Timothy Jones, 18, opened fire on Jefferson anyway, yelling an expletive at her as he shot her in the head, prosecutors said. He then stood over her as she lay on the ground and fired several more times, striking her in the chest and back.
America is changing. The country that so many of us have loved all of our lives is becoming unrecognizable. Large numbers of communities have had all of the hope sucked right out of them. Tens of millions of Americans that want to do things the “right way” are rapidly losing faith in the system.
When you can’t get a decent job after months and months of trying it can be absolutely soul-crushing.
What do you tell someone that has spent a year sending out resumes and has used up all of their savings?
The era of endless prosperity for America is at an end. The cold, hard consequences of decades of bad decisions are starting to set in.
Unless a dramatic change of course happens, the long-term trends noted above are going to get progressively worse. It won’t matter who is running Congress and it won’t matter who is in the White House.
Right now our economy is rapidly hurtling downhill on a bus without brakes and we are headed directly for a cliff.
If you want to feel better about America, just spend some time in some of the really great small towns and rural communities that are scattered across this country. Over the past several days, that is exactly what I had the privilege to do. I have often written about how the “America” that so many of us love is fading away, but in many small towns throughout the United States that “America” is still very much alive. The truth is that there are millions of Americans that still place a tremendous amount of value on God, family and country. My wife and I are accustomed to big city ways, and so we were amazed at how friendly and how open the people that we encountered during our travels were. A lot of times the elitists that run this country look down their noses at those that live in rural communities and small towns, but the reality is that those are some of the greatest people this country has.
Did you know that there are still some Americans in 2011 that do not lock their homes or their cars?
It’s true – my wife and I met some of these people during our travels. They do not fear crime because very, very little crime ever happens where they live.
Of course if someone does try to rob them, let’s just say that the thieves would be in for some very unpleasant surprises.
My wife and I have also found that people in small towns are so much friendlier. Everywhere we went people were saying hello and were eager to get into conversations. We ended up talking with one hotel clerk for 15 to 20 minutes and he shared with us much of his life story. He was a real “salt of the earth” type of guy and it was interesting to hear his unique perspective on life. Every summer he makes jam and sells it in the hotel lobby and he encouraged us to stop by the next time we are in town to get some.
But he was not the only one that was extremely friendly. People were eager to talk to us and were genuinely interested in what we were doing wherever we went.
Also, people sure seemed to smile a whole lot more in these small towns. They just seemed happier.
This is so much different from what I have been used to. Most of my life I have lived either in or near big cities.
When I worked as a lawyer in Washington D.C., I took the metro to work every morning. Often the passengers were crammed into the metro cars like cattle, but most of the time there was absolutely no conversation among the passengers. Usually it was just dead silence all the way into D.C.
In fact, if you did try to strike up a conversation with someone it usually created an awkward moment.
The truth is that in most big cities there is an unwritten rule that you really aren’t even supposed to make eye contact with people. If someone tries to interact with you, it is usually because they want something from you.
So is living in a city with several million people really better than living in a town with only a few thousand people?
During our trip, my wife and I stopped in a little community store where they actually had cats for adoption scattered throughout the store. We also ventured into a pizza parlor that could have been straight out of the 1970s or 1980s. The floor of the pizzeria was a classic red and white checkerboard pattern and there was an old jukebox sitting in the corner. It was great.
Today most of our big box stores are so “corporate” and so “sterile” that something gets lost. When we eliminate the “human element” from everything the world becomes a colder place.
There are still places in America where people will take you at your word.
There are still places in America where people will invite you to stay with them even though they just met you.
There are still places in America where the air is clean, the people are authentically friendly and where the corporations don’t own all the businesses.
The other night my wife and I ordered some food at a “real” family restaurant and it was so much different from what we were used to.
Yes, the decor was a bit dated and the environment was not as “clinical” as you will find in most corporate-owned restaurants, but we had a great time.
I ordered some chicken, and when they brought it out it was not anything like the little bony pieces of chicken that they give you most places. I had probably the thickest chicken breast that I have ever seen. There was as much meat on that one chicken breast as there would be on five or six “tv dinner” chicken breasts.
So is small town life preferable?
Well, it is undeniable that living near a big city is much more convenient and most of the good jobs are in or near the big cities.
But as the economy collapses and as society becomes increasingly unstable, do you really want to find yourself in the middle of one of our urban areas?
This is a theme I have been talking about a lot recently. The following are just a few of the articles that I have put out about the breakdown of society in recent weeks….
It would be nice if things would calm down for a while, but that is just not happening.
In fact, what have we seen just this week?
A horrifying riot in Vancouver.
Aren’t Canadians supposed to be calmer than us?
You can see video of the shocking riots in Vancouver right here, or you can just view the video below….
Yes, there is nothing new about sports riots.
However, what is new is the level of the violence.
15 vehicles, including two police cruisers, were set on fire. Windows were smashed and stores were openly looted in front of television cameras. Police were pelted with rocks and debris. A huge section of the city of Vancouver turned into a war zone.
And for what?
A hockey game?
So what is going to happen someday when those people have real problems?
Part of preparing for hard times is evaluating where you live.
Do you really want to live smack dab in the middle of a major urban area if we do see major rioting in this country someday?
What happened in Vancouver this week was absolutely mindless.
But thankfully, while all of this was going on my wife and I were also reminded that there are still large numbers of really wonderful people out there too.
Small town America is alive and well. Yes, huge numbers of families are really struggling in this economic environment, but that does not mean that they have given up. They still believe in America and they still believe in each other.
Yes, an economic collapse is coming. But that doesn’t mean that all Americans are going to respond to it the same way. If you don’t have a lot of faith in the community where you currently live, you might want to take a closer look at some of the truly great small towns scattered throughout this country.