Federal Reserve Chairman Ben Bernanke has done it. He has succeeded in creating a new housing bubble. By driving mortgage rates down to the lowest level in 100 years and recklessly printing money with wild abandon, Bernanke has been able to get housing prices to rebound a bit. In fact, in some of the more prosperous areas of the country you would be tempted to think that it is 2005 all over again. If you can believe it, in some areas of the country builders are actually holding lotteries to see who will get the chance to buy their homes. Wow – that sounds great, right? Unfortunately, this “housing recovery” is not based on solid economic fundamentals. As you will see below, this is a recovery that is being led by investors. They are paying cash for cheap properties that they believe will appreciate rapidly in the coming years. Meanwhile, the homeownership rate in the United States continues to decline. It is now the lowest that it has been since 1995. There are a couple of reasons for this. Number one, there has not been a jobs recovery in the United States. The percentage of working age Americans with a job has not rebounded at all and is still about the exact same place where it was at the end of the last recession. Secondly, crippling levels of student loan debt continue to drive down the percentage of young people that are buying homes. So no, this is not a real housing recovery. It is an investor-led recovery that is mostly limited to the more prosperous areas of the country. For example, the median sale price of a home in Washington D.C. just hit a new all-time record high. But this bubble will not last, and when this new housing bubble does burst, will it end as badly as the last one did?
Federal Reserve Chairman Ben Bernanke has stated over and over that one of his main goals is to “support the housing market” (i.e. get housing prices to go up). It took a while, but it looks like he is finally getting his wish. According to USA Today, U.S. home prices have been rising at the fastest rate in nearly seven years…
U.S. home prices in the USA’s 20 biggest cities rose 9.3% in the 12 months ending in February. It was the biggest annual growth rates in almost seven years, a closely watched housing index out Tuesday said.
In particular, home prices have been rising most rapidly in cities that experienced a boom during the last housing bubble…
Year over year, Phoenix continued to stand out with a gain of 23%, followed by San Francisco at almost 19% and Las Vegas at nearly 18%, the S&P/Case-Shiller index showed. Most of the cities seeing the biggest gains also fell hardest during the crash.
But is this really a reason for celebration? Instead of addressing the fundamental problems in our economy that caused the last housing crash, Bernanke has been seemingly obsessed with reinflating the housing bubble. As a recent article by Edward Pinto explained, the housing market is being greatly manipulated by the government and by the Fed…
While a housing recovery of sorts has developed, it is by no means a normal one. The government continues to go to extraordinary lengths to prop up sales by guaranteeing nearly 90% of new mortgage debt, financing half of all home purchase mortgages to buyers with zero equity at closing, driving mortgage interest rates to the lowest level in 100 years, and turning the Fed into the world’s largest buyer of new mortgage debt.
Thus, with real incomes essentially stagnant, this is a market recovery largely driven by low interest rates and plentiful government financing. This is eerily familiar to the previous government policy-induced boom that went bust in 2006, and from which the country is still struggling to recover. Creating over a trillion dollars in additional home value out of thin air does sound like a variant of dropping money out of helicopters.
And the Obama administration has been pushing very hard to get lenders to give mortgages to those with “weaker credit”. In other words, the government is once again trying to get the banks to give home loans to people that cannot afford them. The following is from the Washington Post…
The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.
President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.
We are repeating so many of the same mistakes that we made the last time.
But surely things will turn out differently this time, right?
I wouldn’t count on it.
Right now, an increasingly large percentage of homes are being purchased as investments. The following is from a recent Washington Times article…
Much of the pickup in sales and prices has been powered by investors who, convinced that the market is bottoming, are scooping up bountiful supplies of distressed and foreclosed properties at bargain prices and often paying with cash.
With investors targeting lower-priced homes that they intend to purchase and rent out, they have been crowding out many first-time buyers who are having difficulty getting mortgage loans and are at a disadvantage when competing with well-heeled buyers. Cash sales to investors now account for about one-third of all home sales, according to the National Association of Realtors.
And as we have seen in the past, an investor-led boom can turn into an investor-led bust very rapidly.
If this truly was a real housing recovery, the percentage of Americans that own a home would be going up.
Instead, it is going down.
As I mentioned above, the U.S. Census Bureau is reporting that the homeownership rate in the United States is now the lowest that it has been since 1995.
For the average homeowner, the worst news is that these overleveraged and defaulting young borrowers no longer qualify for other kinds of loans — particularly home loans. In 2005, nearly nine percent of 25- to 30-year-olds with student debt were granted a mortgage. By late last year, that percentage, as an annual rate, was down to just above four percent.
The most precipitous drop was among those who owe $100,000 or more. New mortgages among these more deeply indebted borrowers have declined 10 percentage points, from above 16 percent in 2005 to a little more than 6 percent today.
“These are the people you’d expect to buy big houses,” said student loan expert Heather Jarvis. “They owe a lot because they have a lot of education. They have been through professional and graduate schools, but their payments are so significant, they have trouble getting a mortgage. They have mortgage-sized loans already.”
And the truth is that there simply are not enough good jobs in this country to support a housing recovery. In a previous article, I used the government’s own statistics to prove that there has not been a jobs recovery. If we were having a jobs recovery, the percentage of working age Americans with a job would be going up. Sadly, that is not happening…
And as I mentioned above, the “housing recovery” is mostly happening in the prosperous areas of the country.
In other areas of the United States, the devastating results of the last housing crash are still clearly apparent.
And all over the nation there are still “ghost towns” that were created when builders abruptly abandoned housing developments during the last recession. You can see some pictures of some of these ghost towns right here.
So the truth is that this is an isolated housing recovery that is being led by investors and that is being fueled by very reckless behavior by the Federal Reserve. It is not based on economic reality whatsoever.
In the end, will the collapse of this new housing bubble be as bad as the collapse of the last one was?
Please feel free to post a comment with your thoughts below…
Every single year, millions of young adults head off to colleges and universities all over America full of hopes and dreams. But what most of those fresh-faced youngsters do not realize is that by taking on student loan debt they are signing up for a life of debt slavery. Student loan debt has become a trillion dollar bubble which has shattered the financial lives of tens of millions of young college graduates. When you are just starting out and you are not making a lot of money, having to make payments on tens of thousands of dollars of student loan debt can be absolutely crippling. The total amount of student loan debt in the United States has now surpassed the total amount of credit card debt, and student loan debt is much harder to get rid of. Many young people view college as a “five year party“, but when the party is over millions of those young people basically end up as modern day serfs as they struggle to pay off all of the debt that they have accumulated during their party years. Bankruptcy laws have been changed to make it incredibly difficult to get rid of student loan debt, so once you have it you are basically faced with two choices: either you are going to pay it or you are going to die with it.
But we don’t warn kids about this before they go to school. We just endlessly preach to them that they need a college degree in order to get a “good job”, and that after they graduate they will easily be able to pay off their student loans with the “good job” that they will certainly be able to find.
Sadly, tens of millions of young Americans have left college in recent years only to find out that they were lied to all along.
As I have written about previously, college has become a giant money making scam and the victims of the scam are our young people.
Back in 1952, a full year of tuition at Harvard was only $600.
At every turn our young people are being ripped off.
For example, the cost of college textbooks has tripled over the past decade.
Has it suddenly become a lot more expensive to print books?
Of course not.
The truth is that an entire industry saw an opportunity to gouge students and they went for it.
The amount of money being spent on higher education in this country is absolutely outrageous. One father down in Texas says that he will end up spending about 1.5 million dollars on college expenses for his five daughters before it is all said and done.
Unfortunately, most young adults in America don’t have wealthy fathers so they have to take out large student loans to pay for their educations.
Average student loan debt at graduation is estimated to be about $28,720 right now.
That is a crazy figure and it has absolutely soared in recent years. In fact, student loan debt in America has grown by 511 percent since 1999.
And student loan debt will follow you wherever you go.
If you do not pay your loans when you graduate, you could end up having your wages, your tax refunds and even your Social Security benefits garnished.
In addition, your account could be turned over to the debt collectors and they can be absolutely brutal.
The student loan debt bubble is the best thing to happen to debt collectors in ages. The following is what one professional who works in the industry said in a recent article that he wrote for a debt collection industry publication….
As I wandered around the crowd of NYU students at their rally protesting student debt at the end of February, I couldn’t believe the accumulated wealth they represented – for our industry.
It was lip-smacking.
At my right, to graphically display how she was debt-burdened, was a girl wearing a t-shirt emblazoned with the fine sum of $90,000, another with $65,000, a third with $20,000 and over there a really attractive $120,000 was printed on another shirt. Guys were shouldering their share, with t-shirts of $20,000, $15,000, $27,000, $33,000 and $75,000.
There is no way that our young people can afford to take on those kinds of debt loads, and that is one reason why student loan delinquency rates continue to surge.
In fact, the student loan default rate in the United States has nearly doubled since 2005.
At this point there are about 5.9 million Americans that are at least 12 months behind on their student loan payments.
So could the bursting of the student loan bubble do tremendous damage to our financial system?
Don’t worry – Federal Reserve Chairman Ben Bernanke is promising that the student loan debt bubble won’t cause a crisis.
And you can trust him, right?
For those living with the burden of unpaid student loan debt, life can be really tough. Some try to avoid the debt collectors, but it is easier said than done. The following is from a recent article in the New York Times….
Hiding from the government is not easy.
“I keep changing my phone number,” said Amanda Cordeiro, 29, from Clermont, Fla., who dropped out of college in 2010 and has fielded as many as seven calls a day from debt collectors trying to recover her $55,000 in overdue loans. “In a year, this is probably my fourth phone number.”
Unlike private lenders, the federal government has extraordinary tools for collection that it has extended to the collection firms. Ms. Cordeiro has already had two tax refunds seized, and other debtors have had their paychecks or Social Security payments garnisheed.
The biggest problem, of course, is that there are not nearly enough jobs for the hordes of college graduates that our system produces each year.
During 2011, 53 percent of all Americans with a bachelor’s degree under the age of 25 were either unemployed or underemployed.
So without a good job, how are those young people supposed to service their student loans?
Sadly, those days are long gone. Today, millions upon millions of college graduates have taken jobs that do not even require a college education. The following is from a recent CNBC article….
In the last year, they were more likely to be employed as waiters, waitresses, bartenders and food-service helpers than as engineers, physicists, chemists and mathematicians combined (100,000 versus 90,000). There were more working in office-related jobs such as receptionist or payroll clerk than in all computer professional jobs (163,000 versus 100,000). More also were employed as cashiers, retail clerks and customer representatives than engineers (125,000 versus 80,000).
You probably know young people who have experienced the “wake up call” that comes as a result of entering the “real world” in this horrible economic environment.
It is not easy out there.
And this can be extremely disappointing for parents as well. How would you feel if your daughter got very high grades all of the way through college and ended up working as a waitress because she couldn’t find anything else?
Even those that pursue advanced degrees are having an extremely challenging time finding work in this economy.
For example, a Business Insider article from a while back profiled a law school graduate named Erin that is actually on food stamps….
She remains on food stamps so her social life suffers. She can’t afford a car, so she has to rely on the bus to get around Austin, Texas, where she lives. And currently unable to pay back her growing pile of law school debt, Gilmer says she wonders if she will ever be able to pay it back.
“That has been really hard for me,” she says. “I have absolutely no credit anymore. I haven’t been able to pay loans. It’s scary, and it’s a hard thing to think you’re a lawyer but you’re impoverished. People don’t understand that most lawyers actually aren’t making the big money.”
And the really sad thing is that the quality of the education that our young people are receiving is very poor. I spent eight years attending U.S. universities, and most parents would be absolutely shocked at how little our college students are actually learning.
Going to college really has become a ticket to party for four or five or six years with a little bit of “education” thrown in.
But our society has put a very high value on those little pieces of paper called “diplomas” so we all continue to play along with the charade.
Some college students are finding other “creative” ways to pay for their educations other than going into tremendous amounts of debt. For example, an increasing number of young women are seeking out “sugar daddies” who will “sponsor” their educations. The following is from a Huffington Post article about this disturbing trend….
On a Sunday morning in late May, Taylor left her Harlem apartment and boarded a train for Greenwich, Conn. She planned on spending the day with a man she had met online, but not in person.
Taylor, a 22-year-old student at Hunter College, had confided in her roommate about the trip and they agreed to swap text messages during the day to make sure she was safe.
Once in Greenwich, a man who appeared significantly older than his advertised age of 42 greeted Taylor at the train station and then drove her to the largest house she had ever seen. He changed into his swimming trunks, she put on a skimpy bathing suit, and then, by the side of his pool, she rubbed sunscreen into the folds of his sagging back — bracing herself to endure an afternoon of sex with someone she suspected was actually about 30 years her senior.
Of course that young woman will probably deeply regret doing that later on in her life.
Once graduation comes, millions upon millions of our young people are discovering that it is really hard to be financially independent if you are drowning in student loan debt and you can’t find a good job.
So what are they doing?
They are moving back in with Mom and Dad.
One poll discovered that 29 percent of all Americans in the 25 to 34 year old age bracket are still living with their parents.
So what do you think about all of this? Please feel free to post a comment with your thoughts below….
Who ever imagined that Ben Bernanke would become a poster child for the student loan debt problem in America? Recently Bernanke told Congress that his son will graduate from medical school with about $400,000 of student loan debt. For most Americans, such a staggering amount of debt would almost certainly guarantee a lifetime of debt slavery. Unfortunately, Bernanke’s son is not alone. According to the Federal Reserve Bank of New York, approximately 167,000 Americans have more than $200,000 of student loan debt. The cost of a college education has increased much more rapidly than the rate of inflation over the past several decades, and most students enter the “real world” today with a debt burden that will stay with them for most of their working lives. In an economy where there are so few good jobs for college graduates, it can be incredibly difficult to get married, buy a house or afford to have children when you are drowning in student loan debt. It would be hard to overstate the financial pain that student loans are causing many young adults in America today. The student loan debt problem is a national crisis and it is not going away any time soon.
The Federal Reserve Bank of New York says that the total amount of student loan debt in America now exceeds the total of all credit card debt in the country. It also exceeds the total of all auto loans.
The New York Fed says that there is a total of $870 billion owed on student loans in the United States right now. Other sources claim that the total amount of student loan debt in the United States will soon exceed one trillion dollars.
Either way, we are talking about an extraordinary amount of money.
Sadly, approximately two-thirds of all U.S. college students graduate with student loan debt these days. The average amount of student loan debt at graduation is approximately $25,000.
That might not be so bad if the economy was full of good paying jobs for college graduates, but that simply is not the case.
As college tuition continues to soar, the student loan debt problem continues to get even worse. U.S. college students are borrowing about twice as much money as they did a decade ago after adjusting for inflation.
That is not a good trend.
The truth is that it has simply gotten way too expensive to go to college.
Back in 1952, a full year of tuition at Harvard was only $600.
“I pay almost $1,000 a month just in student loan repayment. I will have to do so for the next 30 years. How will I ever afford to buy a house, have children or save for the future?”
After working so hard all the way through school, is that any kind of a “future” to look forward to?
The system is failing our young people.
Many young college graduates have found themselves unable to make their payments or have simply decided to quit making payments.
Officially, the student loan default rate has nearly doubled since 2005. But a new report from the Federal Reserve Bank of New York says that things may be even worse than that. According to the New York Fed, approximately one out of every four student loan balances are past-due at this point.
But it isn’t just young people getting into trouble with student loan debt.
These days, financial institutions are increasingly targeting parents. Federal student loans often do not cover all of the expenses of college in this day and age, and so increasingly loans are being made to parents to make up the difference. Student loans made to directly to parents have increased by 75 percent since the 2005-2006 academic year.
Unfortunately, what students and parents are getting in return for all of this money is not that great.
I spent eight years of my life studying at U.S. colleges and universities. The institutions that I attended were supposed to be better than most. But most of the classes that I took were a total joke. A 6-year-old child could have passed most of them.
Almost everyone agrees that the quality of college education in America is in a serious state of decline. The goal is to get these kids through the system and to keep collecting the big tuition checks.
When I was in school, I could hardly believe how little was being required of me. But being as lazy as I was, I certainly did not complain.
If only more parents realized what was really going on.
The following are some facts about the quality of college education in the United States from a USA Today article….
-“After two years in college, 45% of students showed no significant gains in learning; after four years, 36% showed little change.”
-“Students also spent 50% less time studying compared with students a few decades ago”
-“35% of students report spending five or fewer hours per week studying alone.”
-“50% said they never took a class in a typical semester where they wrote more than 20 pages”
-“32% never took a course in a typical semester where they read more than 40 pages per week.”
Are you starting to get the picture?
If you are in college right now, enjoy the good times while they last, because when you graduate you will find that there are very few good jobs available for the hordes of new college graduates that are pouring into the labor market.
For a new college graduate, things can be rather depressing. Just consider the following statistics….
*About a third of all college graduates end up taking jobs that don’t even require college degrees.
*In the United States today, there are more than 100,000 janitors that have college degrees.
How do you decide whether you are wealthy or not? Do you determine that by how much money you spend at the stores? Of course not. You can tell if you are wealthy or not by comparing your assets (the money in your bank account, equity in your home, etc.) to your liabilities (your mortgage, credit card debt, student loan debt, etc.). Well, a lot of Americans seem to believe that just because a lot of money is circulating in our economy that it must mean that we are a wealthy nation. But that is simply not true. To tell whether or not America is a wealthy nation, you need to look at the balance sheet numbers. And when you look at the balance sheet numbers, a very sobering story emerges. Over the past three decades, government debt, business debt and household debt have absolutely exploded, but our assets have not. That means that we are getting poorer as a nation. Hopefully the shocking charts and statistics in this article will help a lot of Americans to wake up. Yes, we once were the wealthiest nation on earth, but today America is no longer a wealthy nation.
We live during a time when U.S. households are becoming poorer. This week the Federal Reserve announced that the total net worth of U.S. households declined by 4.1 percent in the 3rd quarter of 2011 alone.
That is a staggering decline. The total net worth of U.S. households plummeted by $2.2 trillion during those three months. When you break that down, it comes to approximately $7,800 for every single U.S. citizen.
But this is not the first time we have seen a huge decline in U.S. household wealth in recent years.
A recent article posted on CNN detailed the stunning drop in U.S. household wealth that we saw from 2007 to 2009….
Household wealth plunged $16.3 trillion in the two years from early 2007 to the first quarter of 2009, and has slowly been climbing since then. But with the drop in the third quarter of this year, households find their net worth still $9.4 trillion, or 14%, below the high they hit in early 2007, before the bursting of the housing bubble.
So right now the total net worth of U.S. households is $9.4 trillion below what it was back in 2007.
That certainly is not good news.
But not only is the total net worth of U.S. households going down, our incomes are going down as well.
Since December 2007, median household income in the United States has declined by a total of 6.8% once you account for inflation.
Not that incomes were rising very quickly prior to that time either.
Between 1979 and 2007, income growth for the bottom 90 percent of all U.S. income earners was only about 5 percent for that entire time period.
Meanwhile, household debt was absolutely skyrocketing. Take a look at the following chart which shows what total U.S. household debt has done over the last three decades….
So income growth has been pretty much flat over the past three decades but household debt has been rising at an exponential pace for most of that time.
Yes, there has been a little bit of deleveraging during this economic downturn, but there are now signs that the deleveraging is rapidly coming to an end.
According to a recent CNN article, credit card use in the United States is experiencing a major upswing once again….
Purchases made with credit cards rose 8.2% in the first quarter of 2011, 9% in the second quarter and 10.6% in the third quarter, according to First Data.
That is not good news.
The truth is that U.S. households owe way, way too much money already. According to a recent study conducted by the BlackRock Investment Institute, the ratio of household debt to personal income in the United States is now 154 percent.
We are up to our eyeballs in debt, and our incomes are not keeping up.
In addition, we have seen massive amounts of home equity wiped out in recent years.
An unusual thing has happened during this economic downturn. For the first time in U.S. history, the banks have more equity in our homes than we do. If you do not believe this, just check out this chart.
The truth is that the American people are not becoming wealthier. They are becoming poorer.
And a shocking number of Americans are falling into poverty. In 2010, 2.6 million more Americans fell into poverty, which set a new all-time record for a single year.
But this is not a new thing. This is a trend that we have seen building for many years. Back in the year 2000, 11.3% of all Americans were living in poverty. Today, 15.1% of all Americans are living in poverty.
So obviously U.S. households are not doing well.
But what about the government?
The U.S. national debt is completely and totally out of control. Right now it is sitting at $15,046,397,725,405.16. That means that it is nearly 15 times higher than it was just 30 years ago. Just check out this almost unbelievable chart….
So is our ability to pay these debts 15 times greater than it was back then?
Of course not.
Our liabilities are exploding at an out of control rate but our assets are not.
Whether you are a running a family or running a government, that is a recipe for financial disaster.
The U.S. government has been running budget deficits of over a trillion dollars for several years now, and there is no sign that these trillion dollar deficits are going to stop any time soon.
So how much money is a trillion dollars?
If right this moment you went out and started spending one dollar every single second, it would take you more than 31,000 years to spend one trillion dollars.
Yet somehow the U.S. government has accumulated a debt that is well over 15 trillion dollars.
The Bush administration was a nightmare when it came to running up debt, but they have definitely been outclassed by the Obama administration….
*Since Barack Obama was sworn in, the share of the national debt per household has increased by $35,835.
And most U.S. government spending does not do a thing to build real wealth for this country. For example, the total compensation that the federal government workforce brought in during 2010 is estimated to be about 447 billion dollars.
So did federal workers create 447 billion dollars of real wealth last year?
Of course not.
The truth is that our bloated federal government is a massive drain on our society.
But the federal government is not the only one with a debt problem.
State and local governments all over America are also drowning in debt. In fact, state and local government debt in America is now sitting at an all-time high of 22 percent of U.S. GDP.
The following chart from the Federal Reserve combines government debt, business debt and consumer debt. As you can see, America is swimming in an ocean of more than 50 trillion dollars of debt….
To get an idea of how bad that is, just look at where total debt was at back in 1970 or 1980.
Over the last three decades we have seen an orgy of debt that has been absolutely unprecedented.
Meanwhile, we are bleeding national wealth at a staggering rate.
Every single month, tens of billions of dollars more goes out of this country than comes into it.
This represents a transfer of wealth that is so vast that it is almost impossible to believe.
Our dependence on foreign oil is greatly contributing to this. It is being projected that for the first time ever, the OPEC nations are going to bring in over a trillion dollars from exporting oil this year. Their biggest customer is the United States.
When we send hundreds of billions of dollars overseas, that is hundreds of billions of dollars that does not go into the pockets of American business owners or American workers.
For a moment, imagine a giant map of the world. Then imagine a pile of 7.5 trillion dollars sitting on the United States of America.
That looks pretty good, eh?
Well, then start taking big chunks of that money and start exchanging it for oil and for cheap plastic products until the entire pile is gone.
Are you starting to understand?
We burn up the foreign oil in our cars and most of the cheap plastic products end up being discarded fairly quickly.
But our loss of national wealth is permanent.
Meanwhile, we are facing national financial obligations in the years ahead that are absolutely nightmarish.
According to Boston University Professor Laurence J. Kotlikoff, the U.S. government is facing a “fiscal gap” of $211 trillion in the decades ahead. The following comes from an article that Kotlikoff wrote for CNN earlier this year….
The government’s total indebtedness — its fiscal gap — now stands at $211 trillion, by my arithmetic. The fiscal gap is the difference, measured in present value, between all projected future spending obligations — including our huge defense expenditures and massive entitlement programs, as well as making interest and principal payments on the official debt — and all projected future taxes.
If you went out and liquidated all of the assets owned by all American citizens, all U.S. businesses and all levels of government in America, it would only cover about a third of that bill.
Are you starting to get the picture?
America is no longer a wealthy nation.
We are like that family down the street that is always throwing around tons of money but that is always on the verge of bankruptcy.
So when they tell you that the economy “grew” by 1 or 2 percent, please don’t think that means that America is becoming wealthier.
The truth is that our debts are growing at a far, far faster rate than our assets are.
That means that we are getting poorer.
Is there anyone out there that disagrees with that?
Today, millions of smart, hard working Americans are flipping burgers, waiting tables or working dead end retail jobs not because they want to, but because they have no other options. According to the U.S. Bureau of Labor Statistics, about 14 million Americans are currently unemployed and another 9.3 million Americans are currently “underemployed”. During this economic downturn, a lot of Americans have been forced to take part-time jobs because they have been unable to find full-time jobs. For many, this can be a soul-crushing experience. It can be easy to become very bitter when you have worked very hard all your life and yet you find yourself having to take a job that only pays you a fraction of what you used to make. A lot of young college graduates end up hating life because the only jobs that they can seem to find do not even require a college degree and don’t even come close to enabling them to keep up with their crippling student loan debt payments. Sadly, the underemployment problem continues to grow even worse. In September alone, the number of underemployed Americans rose by close to half a million.
There are other measurements that indicate that unemployment in America is even worse that the Bureau of Labor Statistics is indicating.
Damian Birkel, of Winston-Salem N.C., found himself in similar circumstances. He was a marketing manager at Sarah Lee in the early 1990s when he was downsized. Since then, he has been laid off from three other jobs, including one at a recruiting firm.
“I felt like I had ‘loser’ tattooed to my forehead, and ‘will work for food’ tattooed to my chest,” he says.
The hardest part was telling his young daughter that there might not be enough money to pay the bills — among them, sending her to summer camp. “She brings her piggy bank and says, ‘Daddy, why don’t you break into the piggy bank so that you can pay some of the bills.’”
How would you feel if your little daughter said that to you?
Unfortunately, the number of good jobs just continues to decrease.
There are fewer payroll jobs in the United States today than there were back in 2000 even though we have added 30 million extra people to the population since then.
And the mix of jobs that our economy is producing continues to change.
Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.
A lot of young people are coming out of college right now and are having their dreams absolutely crushed. Large numbers of them are entering the “real world” with nightmarish student loan debt burdens and only a limited number of them can find decent jobs.
Well, unfortunately they continue to fumble the football very badly.
According to a recent ABC News report, the U.S. government actually gave a $529 million loan guarantee to an electric car company that decided to make its cars in Finland….
Vice President Joseph Biden heralded the Energy Department’s $529 million loan to the start-up electric car company called Fisker as a bright new path to thousands of American manufacturing jobs. But two years after the loan was announced, the job of assembling the flashy electric Fisker Karma sports car has been outsourced to Finland.
If we don’t figure out how to stop millions of jobs from leaving this country we are going to be in a world of hurt.
The trade policies of the federal government are neither “free” nor “fair” and they are causing the standard of living of American workers to rapidly sink toward the level of the rest of the world.
We are told that it is “inevitable” that we are going to be deindustrialized and that we are going to become a service economy.
But guess what?
Service jobs generally pay a lot less than manufacturing jobs do.
A “one world economy” where our labor force is merged with the labor forces of the rest of the globe is not a good thing for the average American worker and it is not a good thing for America.
But of course trade is not the only reason why we are losing good jobs. There are a whole bunch of reasons why this is happening. For many more reasons, just check out this article.
A lot of you that are reading this article are unemployed or underemployed right now.
Unfortunately, there is not much hope that the U.S. economy is going to experience a significant turnaround any time soon.
In fact, it is likely that things are going to be getting even worse.
Our economic system is dying. Now is the time to try to get as independent of it as you can.
Don’t count on a job (“just over broke”) as your only source of income. In this economy, no job is safe.
There are millions upon millions of unemployed and underemployed Americans that never dreamed that their lives would go so horribly wrong.
But they did.
Our nation is experiencing the consequences of decades of very bad decisions.
There is no help on the horizon and the cavalry is not on the way to rescue us.
If you think the U.S. economy is bad now, just wait for a few months. Things are about to become absolutely nightmarish. None of the long-term economic trends that are hollowing out our economy have been addressed and more bad economic news seems to come out virtually every single day. Now there is constant talk of the “next recession” in the mainstream media. But did the last recession ever truly end? The number of good jobs continues to decline, more stores are closing, incomes continue to go down, credit card debt and student loan debt are soaring, the housing market resembles a corpse, the number of Americans living in poverty continues to rise and government debt is at unprecedented levels. We are losing blood fast, and almost all of our leaders are either too corrupt or too incompetent to be able to do anything about it. The U.S. economy really and truly is about to go into the toilet, and if something is not done very quickly we are going to experience a complete and total economic disaster in this nation.
Americans have been promised over and over that this economic downturn is just “temporary” and that things will return to normal soon. During this upcoming election cycle, the Democrats will swear that they have all the answers and that if we just elect them everything will be okay. The Republicans will also swear that they have all the answers and that if we just elect them everything will be okay.
Well, both sides are lying. The economic plans of both major political parties are a joke. Neither of them can restore economic prosperity to this nation.
Our politicians could delay the coming economic collapse by borrowing gigantic piles of money and pumping all of that cash into the economy. But stealing from our children and our grandchildren is not exactly sound economic policy.
Yes, the U.S. economy is in bad shape right now, but things are about to get even worse. The long-term problems that are destroying our economy have not been fixed, and the leaks in our ship are going to continue to grow.
The following are 30 signs that the U.S. economy is about to go into the toilet….
#1 An increasing number of unemployed Americans have become so desperate that they have started to look for work overseas. For example, the number of Americans that are submitting applications for temporary work visas in Canada has approximately doubled since 2008. Other Americans are willing to learn foreign languages and travel to the other side of the world if that is what it takes to land a decent job. Just consider the following quote from a recent USA Today report….
Job placement firms are reporting a surge in American worker interest in booming economies such as Hong Kong, Singapore, China and, increasingly, India. Hunt Partners, an executive search firm, estimates that it’s getting 50% to 100% more unsolicited résumés from Americans looking for Asia-based positions today than before the recession.
#2 When Barack Obama first took office, the official U.S. unemployment rate was 7.6 percent. Today it is 9.1 percent.
#3 The number of Americans that are concerned that they will lose their jobs continues to hover near record highs. According to Gallup, 30 percent of all employed Americans are worried that they will soon be laid off.
#4 After three straight years of very high unemployment, you can feel frustration and desperation in the air almost everywhere that you go. Many unemployed Americans are now at the end of their ropes. The following is from a testimonial that was recently posted on The Atlantic….
The most difficult part of the job search is:
1. that I don’t live near a factory or outsource outlet in China, India, or Malaysia.
2. trying not to appear desperate for a job when I am, in fact, quite desperate for a job.
3. that I am subject to everyone’s advice on how to get a job, but no real job leads.
4. that I am reminded that having a good job is not an entitlement.
5. that when I become depressed from my job search, I’m told told to cheer up or else give a bad vibe to prospective employers … yet when I become happy through non-search related activities, I am reminded that I should be looking for work
7. that when I confide to friends and family that I have “given up” to pursue more fruitful interests, it elicits a crushing look of disbelief, disappointment, and disgust
8. waiting for permission to give up.
#5 The percentage of American men that are employed continues to plummet. In July, only 63.5 percent of all men in the United States had a job. Since 1948, that number has only been lower one time (63.3 percent in December 2009).
#6 Back in the 1950s, manufacturing accounted for about 28 percent of U.S. GDP. Last year, it accounted for just 11.7 percent. Meanwhile, manufacturing now accounts for about 25 percent of GDP in China and they now actually have more factory production each year than we do. Sadly, Barack Obama is pushing for even more trade agreements that will send millions more of our jobs overseas.
#7 The percentage of Americans that are working low paying jobs continues to relentlessly march upwards. Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.
#8 According to John Williams of shadowstats.com, after you add in all short-term discouraged workers, all long-term discouraged workers and all Americans that are working part-time because they cannot find full-time employment, the real unemployment rate should be approximately 23 percent.
#9 We are starting to see another huge wave of store closings and layoffs. For example, the parent company of Payless stores has announced that it will be permanently closing 475 stores. Borders is in the process of closing every single one of its 399 stores. Also, Bank of America has just announced that it will be closing about 600 branches, and that could result in the loss of about 30,000 good jobs.
The share of federal student loan defaults rose sharply last year, especially at for-profit colleges and universities, where 15 percent of borrowers defaulted in the first two years of repayment, up from 11.6 percent the previous year.
#13According to a chart in The Economist, whenever the number of newspaper articles in the Financial Times and the Wall Street Journal that mention the word “recession” goes over 1,500 in a particular quarter, the U.S. economy almost always goes into a recession.
#14 The U.S. housing crash just continues to get worse. The index of home builder sentiment put out by the National Association of Home Builders fell once again during the month of September. With such a glut of unsold foreclosed homes on the market, it is making things really hard of home builders. Things have gotten so bad that even the U.S. government now owns nearly a quarter of a million foreclosed homes. The impact of this housing nightmare on families has been absolutely devastating. Just check out what a recent Time Magazine article had to say about what has been going on in California….
The impact on children has been brutal: since 2007, 7% of the state’s children have had a foreclosure process started on their homes, the fourth-highest level in the nation, according to a study released this month by the Annie E. Casey Foundation.
#15 Many believe that due to much tighter lending standards, it is now harder to be approved for a mortgage than at any other time since World War II. This is absolutely crushing the housing market.
#16 Most Americans don’t seem to expect housing prices to recover for an extended period of time. One recent survey found that 54 percent of Americans believe that there will not be a housing recovery until “2014 or later“.
#17 The combined debt of the largest GSEs (Fannie Mae, Freddie Mac and Sallie Mae) has increased from 3.2 trillion in 2008 to a whopping 6.4 trillion in 2011. If that debt goes bad, U.S. taxpayers will be left holding the bill.
#18 There are now nearly 50 million Americans that do not have health insurance, and the percentage of Americans covered by employer-based health plans has fallen for 11 years in a row. Meanwhile, Americans now spend about 3 times as much on health care as they did back in 1990.
#19 The Postal Service has publicly announced that it is “on the verge” of financial collapse.
The number of “self-employed” Americans continues to rapidly shrink. According the Bureau of Labor Statistics, 16.6 million Americans were self-employed back in December 2006. Today, that number has shrunk to 14.5 million. Even though we have 14 million unemployed people in this country and jobs are incredibly difficult to come by, the number of people trying to work for themselves continues to decrease because the environment for small businesses in this country has become so incredibly toxic.
#21 American consumers have become tremendously pessimistic. According to one recent survey, 61 percent of all Americans believe that they will not return to their “pre-recession” lifestyles until at least 2014. According to a different recent survey, 39 percent of Americans actually believe that the U.S. economy has now entered a “permanent decline”.
#22 Many U.S. investors certainly seem to believe that trouble is coming. According to CNN, last month the number of bets against the S&P 500 was the highest that we have seen in about a year.
#23 The number of U.S. households that are “doubling up” continues to grow. According to the U.S. Census Bureau, the number of combined households has increased by 10.7 percent since 2007.
#24 When Barack Obama moved into the White House, the average price of a gallon of gasoline in the United States was $1.83. Today it is $3.58.
#25 The number of Americans living in poverty grew by 2.6 million last year. That was the largest increase since the U.S. government began calculating poverty figures back in 1959.
#26 Back in the year 2000, 11.3% of all Americans were living in poverty. Today, 15.1% of all Americans are living in poverty.
#27 On Barack Obama’s first day on the job, there were about 32 million Americans on food stamps. Today, there are more than 45 million Americans on food stamps.
#28 If there is a financial collapse in Europe, that will definitely plunge us into another recession. Right now, things do not look promising. At this point, headlines all over the world are proclaiming that Greece is dangerously close to defaulting.
#29 At some point soon, investors all over the globe may decide that it is time to start dumping U.S. government debt. For example, Chinese officials are now openly talking about the need to “liquidate” their holdings of U.S. Treasuries.
#30 The U.S. national debt continues to explode in size and spiral out of control. According to Professor Laurence J. Kotlikoff, the U.S. “fiscal gap” increased by about 6 trillion dollars last year. In fact, Kotlikoff makes a compelling argument that Greece is actually in better shape financially than the United States is.
Do you now understand how much trouble we are in?
The long-term trends that are destroying us continue to get worse.
The United States is steamrolling directly toward an economic collapse.
When this economy hits bottom and splatters all over the place, it is not going to be easy to fix.
The America that we know today is going to be wiped out by a gigantic mountain of debt and by the consequences of decades of really bad decisions.
We were handed the keys to the greatest economic machine in the history of the world and we have wrecked it.
Is going to college a worthwhile investment? Is the education that our young people are receiving at our colleges and universities really worth all of the time, money and effort that is required? Decades ago, a college education was quite inexpensive and it was almost an automatic ticket to the middle class. But today all of that has changed. At this point, college education is a big business. There are currently more than 18 million students enrolled at the nearly 5,000 colleges and universities currently in operation throughout the United States. There are quite a few “institutions of higher learning” that now charge $40,000 or even $50,000 a year for tuition. That does not even count room and board and other living expenses. Meanwhile, as you will see from the statistics posted below, the quality of education at our colleges and universities has deteriorated badly. When graduation finally arrives, many of our college students have actually learned very little, they find themselves unable to get good jobs and yet they end up trapped in student loan debt hell for essentially the rest of their lives.
Across America today, “guidance counselors” are pushing millions of high school students to go to the very best colleges that they can get into, but they rarely warn them about how much it is going to cost or about the sad reality that they could end up being burdened by massive debt loads for decades to come.
Yes, college is a ton of fun and it is a really unique experience. If you can get someone else to pay for it then you should definitely consider going.
There are also many careers which absolutely require a college degree. Depending on your career goals, you may not have much of a choice of whether to go to college or not.
But that doesn’t mean that you have to go to student loan debt hell.
You don’t have to go to the most expensive school that you can get into.
You don’t have to take out huge student loans.
There is no shame in picking a school based on affordability.
The truth is that pretty much wherever you go to school the quality of the education is going to be rather pathetic. A highly trained cat could pass most college courses in the United States today.
Personally, I have had the chance to spend quite a number of years on college campuses. I enjoyed my time and I have some pretty pieces of parchment to put up on the wall. I have seen with my own eyes what goes on at our institutions of higher learning. In a previous article, I described what life is like for most “average students” enrolled in our colleges and universities today….
The vast majority of college students in America spend two to four hours a day in the classroom and maybe an hour or two outside the classroom studying. The remainder of the time these “students” are out drinking beer, partying, chasing after sex partners, going to sporting events, playing video games, hanging out with friends, chatting on Facebook or getting into trouble. When they say that college is the most fun that most people will ever have in their lives they mean it. It is basically one huge party.
If you are a parent and you are shelling out tens of thousands of dollars every year to pay for college you need to know the truth.
You are being ripped off.
Sadly, a college education just is not that good of an investment anymore. Tuition costs have absolutely skyrocketed even as the quality of education has plummeted.
A college education is not worth getting locked into crippling student loan payments for the next 30 years.
Even many university professors are now acknowledging that student loan debt has become a horrific societal problem. Just check out what one professor was quoted as saying in a recent article in The Huffington Post….
“Thirty years ago, college was a wise, modest investment,” says Fabio Rojas, a professor of sociology at Indiana University. He studies the politics of higher education. “Now, it’s a lifetime lock-in, an albatross you can’t escape.”
Anyone that is thinking of going to college needs to do a cost/benefit analysis.
Is it really going to be worth it?
For some people the answer will be “yes” and for some people the answer will be “no”.
But sadly, hardly anyone that goes to college these days gets a “good” education.
#6 According to very extensive research detailed in a new book entitled “Academically Adrift: Limited Learning on College Campuses”, 45 percent of U.S. college students exhibit “no significant gains in learning” after two years in college.
#18 In the United States today, approximately 365,000 cashiers have college degrees.
#19 In the United States today, 24.5 percent of all retail salespersons have a college degree.
#20 Once they get out into the “real world”, 70% of college graduates wish that they had spent more time preparing for the “real world” while they were still in school.
#21Approximately 14 percent of all students that graduate with student loan debt end up defaulting within 3 years of making their first student loan payment.
There are millions of young college graduates running around out there that are wondering where all of the “good jobs” are. All of their lives they were promised that if they worked really hard and got good grades that the system would reward them.
Sometimes when you do everything right you still can’t get a job. A while back The Huffington Post featured the story of Kyle Daley – a highly qualified UCLA graduate who had been unemployed for 19 months at the time….
I spent my time at UCLA preparing for the outside world. I had internships in congressional offices, political action committees, non-profits and even as a personal intern to a successful venture capitalist. These weren’t the run-of-the-mill office internships; I worked in marketing, press relations, research and analysis. Additionally, the mayor and city council of my hometown appointed me to serve on two citywide governing bodies, the planning commission and the open government commission. I used to think that given my experience, finding work after graduation would be easy.
At this point, however, looking for a job is my job. I recently counted the number of job applications I have sent out over the past year — it amounts to several hundred. I have tried to find part-time work at local stores or restaurants, only to be turned away. Apparently, having a college degree implies that I might bail out quickly when a better opportunity comes along.
The sad truth is that a college degree is not an automatic ticket to the middle class any longer.
But for millions of young Americans a college degree is an automatic ticket to student loan debt hell.
Student loan debt is one of the most insidious forms of debt. You can’t get away from student loan debt no matter what you do. Federal bankruptcy law makes it nearly impossible to discharge student loan debts, and many recent grads end up with loan payments that absolutely devastate them financially at a time when they are struggling to get on their feet and make something of themselves.
So are you still sure that you want to go to college?
Another open secret is that most of our colleges and universities are little more than indoctrination centers. Most people would be absolutely shocked at how much unfiltered propaganda is being pounded into the heads of our young people.
At most colleges and universities, when it comes to the “big questions” there is a “right answer” and there is virtually no discussion of any other alternatives.
In most fields there is an “orthodoxy” that you had better adhere to if you want to get good grades.
Let’s just say that “independent thought” and “critical thinking” are not really encouraged at most of our institutions of higher learning.
Am I bitter because I didn’t do well? No, I actually did extremely well in school. I have seen the system from the inside. I know how it works.
It is a giant fraud.
If you want to go to college because you want to have a good time or because it will help you get your career started then by all means go for it.
It seems like wherever you turn there is bad news for the U.S. economy. Unemployment is rampant, the cost of gasoline is going up, the cost of food is going up and American families are getting poorer. Millions of jobs continue to leave the country and everyone is wondering why it seems like the “American Dream” is dying. American consumers are absolutely swamped with staggering levels of credit card debt, student loan debt and mortgage debt and each year the consumer debt crisis only seems to get worse. For millions of American families the money problems never seem to end. Meanwhile, our politicians are doing next to nothing to fix our horrific national debt problem. So yes, there are a whole lot of reasons to be absolutely disgusted with the U.S. economy. We are living in the greatest debt bubble in the history of the world, and anyone with half a brain can see that we are heading for complete and total disaster.
A lot of Americans do not like to read about economics, but what has been going on over the last few years has been nothing short of extraordinary. The Federal Reserve has basically tripled the adjusted monetary base. We have now been conditioned to accept that trillion dollar deficits are “normal”. The U.S. dollar is being systematically destroyed right in front of our eyes and most Americans don’t even seem alarmed about it.
Our entire financial system is coming apart.
The signs are everywhere.
The following are 25 reasons to be absolutely disgusted with the U.S. economy….
#4 Over the past 12 months the average price of gasoline in the United States has gone up by about 30%.
#5 In the 8 days leading up to the “historic” $38.5 billion budget deal, the U.S. national debt increased by $54.1 billion dollars.
#6 The $38.5 billion in budget cuts that the Republicans and the Democrats have agreed to represent approximately one percent of the federal budget.
#7 During the 2010 campaign, the Republicans promised voters they would cut $100 billion from the budget for 2011. Instead, they gave in when the Democrats offered just $38.5 billion.
#8 The Obama administration had been estimating that the federal budget deficit for fiscal 2011 would be approximately 1.6 trillion dollars. Now it will likely be somewhere around 1.55 trillion dollars which will still be an all-time record.
#9 According to numbers released by Deloitte Consulting, a whopping 875,000 Americans were “medical tourists” in 2010.
#11 Thanks to globalism, U.S. workers now must directly compete for jobs with workers in places such as Indonesia. In Indonesia, full-time workers make as little as two dollars a day. So how are Americans supposed to compete with that?
#17 According to the New York Times, as of 2009 the wealthiest 5 percent of all Americans had 63.5 percent of all the wealth in America. Meanwhile, the bottom 80 percent had just 12.8 percent of all the wealth.
#18 According to a recent report from the National Employment Law Project, higher wage industries accounted for 40 percent of the job losses over the past 12 months but only 14 percent of the job growth. Lower wage industries accounted for just 23 percent of the job losses over the past 12 months and a whopping 49 percent of the job growth.
That last statistic really gets me. During the month of April the American people are going to be spending massive amounts of time and money to prepare their taxes.
But what do Americans get in return for their taxes?
What they get is a government that is completely and totally incompetent. Our “leaders” are running the greatest economy in the history of the world into the ground, but unfortunately most Americans have no idea what is happening.
Why are Americans so clueless?
Well, the truth is that over time we have been turned into a nation of idiots and morons.
If you haven’t noticed lately, America is literally falling apart all around us. Decaying infrastructure is everywhere. Our roads and bridges are crumbling and are full of holes. Our rail system is ancient. Our airports and runways have definitely seen their better days. Aging sewer systems all over the country are leaking raw sewage all over the place. The power grid is straining to keep up with the ever-increasing thirst of the American people for electricity. Dams are failing at an unprecedented rate. Virtually all of our ports are handling far more traffic than they were ever intended to handle. Meanwhile, our national spending on infrastructure is way down. Back during the 1950s and 1960s we were spending between 3 and 4 percent of our national GDP on infrastructure, but today we are spending less than 2.5 percent of our national GDP on it. According to the American Society of Civil Engineers, we need to spend approximately $2.2 trillion on infrastructure repairs and upgrades just to bring our existing infrastructure up to “good condition”.
Does anyone have an extra $2.2 trillion to spare?
If you get the feeling that America is decaying as you drive around this great country of ours, it is not just your imagination. It is literally happening.
You should not read the list of facts below if you want to keep feeling good about the condition of America’s infrastructure. There really is no way to sugar-coat what is happening. Previous generations handed us the greatest national infrastructure that anyone in the world has ever seen and we have neglected it and have allowed it to badly deteriorate.
#1 One-third of America’s major roads are in poor or mediocre condition.
#2 Traffic on more than half the miles of interstate highway exceeds 70 percent of capacity, and nearly 25 percent of the miles are strained at more than 95 percent of capacity.
#3 Americans waste 4.2 billion hours and 2.8 billion gallons fuel a year sitting in traffic – equal to nearly one full work week and three weeks’ worth of gas for every traveler.
#4 Over the next 30 years, our nation is expected to grow by 100 million and highway traffic will double again. Even if highway capacity grows no faster than in the last 25 years, Americans can expect to spend 160 hours – 4 work weeks – each year in traffic by 2035.
#5 Nearly a third of all highway fatalities are due to substandard road conditions, obsolete road designs, or roadside hazards.
#6 Over 4,095 dams are “unsafe” and have deficiencies that leave them more susceptible to failure, especially during large flood events or earthquakes.
#7 Rolling blackouts and inefficiencies in the U.S. electrical grid cost an estimated $80 billion a year.
#8 By 2020, every major U.S. container port is projected to at least double the volume of cargo it was designed to handle. Some East Coast ports will triple in volume, and some West Coast ports will quadruple.
#9 Other countries are leapfrogging past us by investing in world-class ports. China is investing $6.9 billion; the port of Shanghai now has almost as much container capacity as all U.S. ports combined.
#10 By 2020, China plans to build 55,000 miles of highways, more than the total length of the U.S. interstate system.
The rest of these facts were compiled from various sources around the Internet. The more research that you do into America’s decaying infrastructure the more depressing it becomes….
#11 According to the U.S. Department of Transportation, more than 25 percent of America’s nearly 600,000 bridges need significant repairs or are burdened with more traffic than they were designed to carry.
#13 All across the United States, conditions at many state parks, recreation areas and historic sites are deplorable at best. Some states have backlogs of repair projects that are now over a billion dollars long. The following is a quote from a recent MSNBC article about these project backlogs….
More than a dozen states estimate that their backlogs are at least $100 million. Massachusetts and New York’s are at least $1 billion. Hawaii officials called park conditions “deplorable” in a December report asking for $50 million per year for five years to tackle a $240 million backlog that covers parks, trails and harbors.
#15 All over America, asphalt roads are being ground up and are being replaced with gravel because it is cheaper to maintain. The state of South Dakota has transformed over 100 miles of asphalt road into gravel over the past year, and 38 out of the 83 counties in the state of Michigan have transformed at least some of their asphalt roads into gravel roads.
So why don’t our state and local governments just spend the money necessary to fix all of these problems?
Well, they can’t spend the money because they are flat broke.
Just consider some of the financial problems that state and local governments around the nation are facing right now….
#19 Major cities such as Philadelphia, Baltimore and Sacramento are so desperate to save money that they have instituted “rolling brownouts” in which various city fire stations are shut down on a rotating basis throughout the week.
#20 Detroit Mayor Dave Bing has come up with a unique way to save money. He wants to cut 20 percent of Detroit off from essential social services such as road repairs, police patrols, functioning street lights and garbage collection.
But it just isn’t local governments that are in deep trouble right now. In fact, there are quite a few state governments that are complete and total financial disaster zones at this point.
According to 60 Minutes, the state of Illinois is at least six months behind on their bill payments. 60 Minutes correspondent Steve Croft recently asked Illinois state Comptroller Dan Hynes how many people and organizations are waiting to be paid by the state, and this is how Hynes responded….
“It’s fair to say that there are tens of thousands if not hundreds of thousands of people waiting to be paid by the state.”
But if states get cut off from all the debt that they need to operate, things are going to get a lot worse very quickly.
Already we are seeing all kinds of troubling signs. For example, the state of Arizona recently decided to stop paying for many types of organ transplants for people enrolled in its Medicaid program.
Sadly, as much as our politicians try to “fix” our problems, things just only seem to keep getting worse.
One prominent illustration of this is our health care system. Our health care system is absolutely falling apart all around us. Thanks to the new health care reform law, doctors are flocking out of the profession in droves. According to an absolutely stunning new poll, 40 percent of all U.S. doctors plan to bail out of the profession over the next three years.
Our economy continues to fall apart as well. The number of personal bankruptcies in the United States continues to set stunning new highs. According to the American Bankruptcy Institute, more than 1.53 million Americans filed bankruptcy petitions in 2010. This was up 9 percent from 1.41 million in 2009.
Not only that, but the housing crisis shows no signs of abating. 382,000 new foreclosures were initiated during the third quarter of 2010. This was up 31.2 percent from the previous quarter and it was 3.7 percent higher than the third quarter of 2009.
The U.S. banking system is also falling apart. In 2006, no U.S. banks failed. In 2009, 140 U.S. banks failed. So did things get better in 2010? No. In 2010, 157 U.S. banks failed.
Unemployment continues to remain at depressingly high levels, and in many areas of the country it is getting even worse. According to the U.S. Labor Department, the unemployment rate rose in two-thirds of America’s largest metro areas during November.
Millions of Americans have become so disgusted with the job market that they have given up altogether. The number of people who are so discouraged that they have completely given up searching for work now stands at an all-time high.
So who is doing a booming business during these hard times? Welfare agencies and food banks are. During this economic downturn, millions of American families have found themselves going to a food bank for the very first time ever.
It is getting harder and harder for average American families to feed themselves. A recent survey conducted by the Pew Research Center found that 29 percent of Americans say that it is hard to afford food, and 48 of Americans say that it is hard to afford their heating and electric bills.
So is there any hope for the future? Well, our new college graduates are supposed to lead us into the future, but most of them are saddled with overwhelming amounts of student loan debt. Those who graduated during 2009 had an average of $24,000 in student loan debt. This represented a 6 percent increase from the previous year.
Not only that, but these new college grads are not finding jobs. According to the one recent report, the unemployment rate for recent college graduates was 8.7 percent in 2009. This was up from 5.8 percent in 2008, and it was the highest unemployment rate ever recorded for college graduates between the ages of 20 to 24.
As if all of this was not bad enough, now the Baby Boomers are starting to reach retirement age. Beginning January 1st, 2011 every single day more than 10,000 Baby Boomers will reach the age of 65. That is going to keep happening every single day for the next 19 years.
So where in the world are we going to come up with all of the money to give them the retirement benefits that they are due?
The truth is that we are flat broke as a nation and so America’s decaying infrastructure is going to continue to decay. We don’t have the money to repair what we already have, much less add desperately needed new infrastructure.
But perhaps it is only fitting. The decay of our roads and cities will match the deep social, moral and political decay that has already been going on in this country for decades.
So will the American people awaken soon enough to be able to recapture the legacy of greatness that previous generations tried to pass on to us?
Unfortunately, the vast majority of our politicians are completely incompetent. Posted below is a short video from Tim Hawkins that is absolutely hilarious but that also demonstrates just how incompetent our government really is….