Why New York Times Economist Paul Krugman Is Partly Right But Mostly Wrong

In recent days, New York Times economist Paul Krugman has been doing a whole bunch of interviews in which he has declared that the solution to our economic problems is very easy.  Krugman says that all we need to do to get the global economy going again is for the governments of the world to start spending a lot more money.  Krugman believes that austerity is only going to cause the economies of the industrialized world to slow down even further and therefore he says that it is the wrong approach.  And you know what?  Krugman is partly right about all of this.  The false prosperity that the United States and Europe have been enjoying has been fueled by unprecedented amounts of debt, and in order to maintain that level of false prosperity we are going to need even larger amounts of debt.  But there are several reasons why Krugman is mostly wrong.  First of all, we have not seen any real “austerity” yet.  Even though there have been some significant spending cuts and tax increases over in Europe, the truth is that nearly every European government is still piling up more debt at a frightening pace.  Here in the United States, the federal government continues to spend more than a trillion dollars a year more than it brings in.  If the United States were to go to a balanced federal budget, that would be austerity.  What we have now is wild spending by the federal government beyond anything that John Maynard Keynes ever dreamed of.  Secondly, Krugman focuses all of his attention on making things more comfortable for all of us in the short-term without even mentioning what we might be doing to future generations.  Yes, more government debt would give us a short-term economic boost, but it would also make the long-term financial problems that we are passing on to our children even worse. (Read More...)

95 Percent Of The Jobs Lost During The Recession Were Middle Class Jobs

Who is the biggest loser in the ongoing decline of the U.S. economy?  Is it the wealthy?  No, the stock market has been soaring lately and their incomes are actually going up.  Is it the poor?  Well, the poor are definitely hurting very badly, but when you don’t have much to begin with you don’t have much to lose.  Unfortunately, it is the middle class that has lost the most during this economic downturn.  According to Bloomberg, 95 percent of the jobs lost during the recession were middle class jobs.  That is an absolutely astounding figure.  Yes, some executives lost their jobs during the last recession as did some minimum-wage workers.  But overwhelmingly the jobs that were lost were middle income jobs.  Sadly, the limited number of jobs that have been added since the end of the last recession have mostly been low income jobs.  A higher percentage of Americans are working low income jobs than ever before, and the cost of living continues to rise at a very brisk pace.  This is causing an erosion of the middle class unlike anything we have ever seen in American history. (Read More...)

Class Warfare Is Being Used To Divide America – And It Is Working

At a time when America desperately needs to come together, we are becoming more divided than ever.  The mainstream media and most of our politicians love to pit us against one another in dozens of different ways, and right now class warfare has become one of their favorite tools for getting us to hate one another.  If you are struggling in this economy, you are being told that “the wealthy” are the cause of your problems.  If you have money, you are being told that the poor hate you and want to tax you into oblivion.  Class warfare has already become a dominant theme in the 2012 race for the White House, and there will certainly be endless speeches given along these lines by politicians from both major political parties all the way up to election day.  Class warfare will be used by both sides as a way to divide America and get votes.  And the frightening thing is that it is clearly working.  There is more hatred between the poor and the wealthy in America today than at any other time that I can remember.  But hating people because of how much money they have or don’t have is not going to solve anything.  Instead, it is just going to cause more problems. (Read More...)

22 Signs That The Collapsing Spanish Economy Is Heading Into A Great Depression

What happens when debt-fueled false prosperity disappears?  Just look at Spain.  The 4th largest economy in the eurozone was riding high during the boom years, but now the Spanish economy is collapsing with no end in sight.  When a debt bubble gets interrupted, the consequences can be rather chaotic.  Just like we saw in Greece, austerity is causing the economy to slow down in Spain.  But when the economy slows down, tax revenues fall and that makes it even more difficult to meet budget targets.  So even more austerity measures are needed to keep debt under control and the cycle just keeps going.  Unfortunately, even with all of the recently implemented austerity measures the Spanish government is still not even close to a balanced budget.  Meanwhile, the housing market in Spain is crashing and unemployment is already above 24 percent.  The Spanish banking system is a giant, unregulated mess that is on the verge of a massive implosion, and the Spanish stock market has been declining rapidly.  The Spanish government is going to need a massive bailout and so will the entire Spanish banking system.  But that is going to be a huge problem, because the Spanish economy is almost 5 times as large as the Greek economy.  When the Spanish financial system collapses, the entire globe is going to feel the pain and there will be no easy solution. (Read More...)

The Family Farm Is Being Systematically Wiped Out Of Existence In America

An entire way of life is rapidly dying right in front of our eyes.  The family farm is being systematically wiped out of existence in America, and big agribusiness and the federal government both have blood all over their hands.  According to the U.S. Department of Agriculture, the number of farms in the United States has fallen from about 6.8 million in 1935 to only about 2 million today.  That doesn’t mean that there is less farming going on.  U.S. farms are producing more than ever.  But what it does mean is that farming is increasingly becoming dominated by the big boys.  The rules of the game have been tilted in favor of big agribusiness so dramatically that most small farmers find that they simply cannot compete anymore.  Back in 1900, about 39 percent of the U.S. population worked on farms.  At this point, only about 2 percent of all Americans now live on farms.  Big agribusiness, the food processing conglomerates, and big seed companies such as Monsanto completely dominate the industry.  Unless something dramatic is done, the family farm is going to continue to be wiped out of existence.  Unfortunately, it does not look like things are going to turn around any time soon. (Read More...)

5 New Lies That The Federal Reserve Is Telling The American People

The Federal Reserve says that everything is going to be okay.  The Fed says that unemployment is going to go down, inflation is going to remain low and economic growth is going to steadily increase.  Do you believe them this time?  As you will see later in this article, Federal Reserve Chairman Ben Bernanke has been dead wrong about the economy over and over again.  But the mainstream media and many Americans still seem to have a lot of faith in the Federal Reserve.  It doesn’t seem to matter that Bernanke and other Fed officials have been telling the American people lies for years.  As I always say, most people believe what they want to believe, and many people seem to want to have blind faith in the Federal Reserve even when logic and reason would dictate otherwise.  The truth is that things are not going to be getting much better than they are right now.  When the next wave of the financial crisis hits, the U.S. economy is going to fall back into recession, financial markets are going to crash and unemployment is going to absolutely skyrocket.  But you will never hear any of that from the Federal Reserve. (Read More...)

22 Red Flags That Indicate That Very Serious Doom Is Coming For Global Financial Markets

If you enjoy watching financial doom, then you are quite likely to really enjoy the rest of 2012.  Right now, red flags are popping up all over the place.  Corporate insiders are selling off stock like there is no tomorrow, major economies all over Europe continue to implode, the IMF is warning that the eurozone could actually break up and there are signs of trouble at major banks all over the planet.  Unfortunately, it looks like the period of relative stability that global financial markets have been enjoying is about to come to an end.  A whole host of problems that have been festering just below the surface are starting to manifest, and we are beginning to see the ingredients for a “perfect storm” start to come together.  The greatest global debt bubble in human history is showing signs that it is getting ready to burst, and when that happens the consequences are going to be absolutely horrific.  Hopefully we still have at least a little bit more time before the global financial system implodes, but at this point it doesn’t look like anything is going to be able to stop the chaos that is on the horizon. (Read More...)

53 Percent Of All Young College Graduates In America Are Either Unemployed Or Underemployed

If you are in college right now, you will most likely either be unemployed or working a job that only requires a high school degree when you graduate.  The truth is that the U.S. economy is not coming anywhere close to producing enough jobs for the hordes of new college graduates that are entering the workforce every year.  In 2011, 53 percent of all Americans with a bachelor’s degree under the age of 25 were either unemployed or underemployed.  Millions upon millions of young college graduates feel like the system has totally failed them.  They worked hard in school all their lives, they went into huge amounts of debt in order to get the college education that they were told they “must have” in order to get a good job, but after graduation they found that there were only a handful of good jobs for the huge waves of college graduates that were entering the “real world”.  All over America, college graduates can be found waiting tables, flipping burgers and working behind the register at retail stores.  Unfortunately, the employment picture in America is not going to get significantly better any time soon. (Read More...)