The retail industry is being hit particularly hard.  At the end of last week, major retailers announced 465 store closings in a single 48 hour period…

The ‘retail apocalypse’ is alive and well this week with major chains such as Gap, JCPenney, Victoria’s Secret and Foot Locker all announcing massive closures, totalling the death of more than 465 stores over the last 48 hours.

And those closings already bring the grand total for 2019 to “a whopping 4,309 store closures”…

That builds on recent store closure announcements by Gymboree, Payless ShoeSource, Charlotte Russe and Ann Taylor parent company Ascena Retail, to name a few. A whopping 4,309 store closures were announced by retailers just in the first two months of this year, Coresight Research said in a research note on Friday. That’s well ahead of the number of announcements the market research firm was tracking this same time a year ago, it said.

The term “retail apocalypse” is being thrown around so frequently these days that it has almost lost its meaning, but the worst is yet to come.

Meanwhile, layoffs are starting to come fast and furious now.  For example, I was recently made aware of major job cuts that just happened in North Carolina…

Duke Energy Corp. eliminated 1,900 positions in its latest round of job reductions, largely through voluntary buyouts but with some involuntary layoffs included.

For the first time since the last recession, I think that it is time to start visiting sites like Daily Job Cuts on a regular basis once again.  Millions of Americans lost their jobs in 2008 and 2009, and a lot of you can still remember how painful that was.

In the middle of the country, the big news is “the farm apocalypse”.  Last week, we learned that farm debt has now jumped 30 percent since 2013…

“Farm debt has been rising more rapidly over the last five years, increasing by 30% since 2013 – up from $315 billion to $409 billion, according to USDA data, and up from $385 billion in just the last year – to levels seen in the 1980s,” Perdue said in his testimony to the House Agriculture Committee.

As a result of this giant mountain of debt, a ton of small and mid-size farms are going under.  As I noted the other day, farm debt delinquencies have now reached the highest level that we have witnessed in 9 years.

I really, really don’t understand the people that are telling us that everything is going to be okay.

Everything is not okay, and things are getting worse with each passing day.  ISM’s manufacturing survey just hit the lowest level in 26 months, and for a whole bunch more extremely ominous economic numbers please see my previous article entitled “18 Really Big Numbers That Show That The U.S. Economy Is Starting To Fall Apart Very Rapidly”.

Of course it isn’t just the U.S. that is hurting.  Up north, Canada is literally teetering on the brink of recession…

The Canadian government shocked the professional financial and economic media with their latest fourth quarter GDP release showing the economy has essentially come to a grinding halt at 0.1% growth.

And over in Europe, things are arguably even worse.  Germany is supposed to have the strongest economy in the entire region, but they are also right on the brink of recession…

The country’s economy just escaped entering recession territory last month, with GDP growing at just zero percent following a 0.4 percent contraction in the previous three-month period. But Germany could be just weeks away from a recession-threatening double whammy as a potential no-deal Brexit and Donald Trump’s warning to hike car tariffs by up to 25 percent could send the economy tumbling. Chancellor Angela Merkel’s ministers have entered into a frantic plan to avert an economic catastrophe which could end Europe’s biggest economy’s golden growth for a decade.

This is a global economic slowdown, and many believe that it will be even worse than what we experienced in 2008.

But as I have previously warned, we aren’t just heading toward an economic storm.  Everything that can be shaken will be shaken, and that includes our governmental institutions.

On Sunday, we learned that the House Judiciary Committee is opening an investigation into obstruction of justice by President Trump.  The following comes from Reuters…

The House Judiciary Committee will seek documents from more than 60 people and organizations as it begins investigations into possible obstruction of justice and abuse of power by President Donald Trump, the panel’s chairman said on Sunday.

Committee Chairman Jerrold Nadler told ABC’s “This Week” the panel wanted documents from the Department of Justice, the president’s son Donald Trump Jr. and Trump Organization chief financial officer Allen Weisselberg, among others.

This is going to be a year of great governmental shaking.  And no matter which side emerges victorious from the legal struggles and from the election of 2020, the truth is that our governmental institutions will never be the same again.

From 2016 through 2018, America experienced a time of relative peace and prosperity, and a lot of people out there were convinced that this bubble of unsustainable false prosperity could continue indefinitely.

Now it is becoming very clear what is ahead of us, and a lot of people are starting to freak out.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

The post Investors Brace For Impact As The Cancer That Is Ravaging “The Real Economy” Starts To Spread appeared first on The Economic Collapse.

The global economy’s loss of momentum has left expansion now looking like its weakest since the global financial crisis, a development that’s already sparked a dramatic shift among central banks.

A UBS model suggests world growth slowed to a 2.1 percent annualized pace at the end of 2018, which it says would be the weakest since 2008-2009.

Unfortunately, it appears that things are getting even worse during the first few months of 2019.  In North America, Europe and Asia, signs of a major downturn are seemingly everywhere…

Unfortunately, there hasn’t been much sign of that. China car sales dropped in January, and data last week showed U.S. retail sales posted their worst drop in nine years in December. In Europe, where the slowdown has been particularly marked, sentiment indicators continue to weaken, and the latest OECD leading indicator has also declined.

The numbers coming out of China are particularly striking.  Experts were stunned this week when it was announced that Chinese car sales had plunged 17.7 percent…

Car sales in China continued to decline in January after their first full-year slump in more than two decades, adding to pressure on automakers who bet heavily on the market amid waning demand for cars from the U.S. to Europe.

Passenger vehicle wholesales fell 17.7 percent year-on-year, the biggest drop since the market began to contract in the middle of last year, while retail sales had their eighth consecutive monthly decline, industry groups reported Monday.

That is an absolutely disastrous number, and it is a sign that this will be a very, very tough year for the global auto industry.

Meanwhile, German industrial production is falling at a pace that we haven’t seen since the last global recession…

“Unexpectedly,” German industrial production fell 3.9% in December 2018 compared to December 2017, after having fallen by a revised 4.0% in November, according to German statistics agency Destatis Thursday morning. These two drops were steepest year-over-year drops since 2009.

Even during the European Debt Crisis in 2011 and 2012 – it hit Germany’s industry hard as many European countries weaved in and out of a recession, with some countries sinking into a depression — German industrial production never fell as fast on a year-over-year basis as in November and December

But as bad as things are in Germany, they are even worse in Italy.

Italy’s economy has already fallen into a recession, and their debt problems continue to grow with each passing day.

Watch Italy, because it is going to be a key to the drama that is currently unfolding in Europe.

Here in the United States, we are still doing relatively better than much of the rest of the world, but our economy is slowing down too.  U.S. retail sales just suffered their “biggest drop in more than nine years”, and the stunning bankruptcy and liquidation of Payless ShoeSource has made front page news all over the nation…

Payless ShoeSource confirmed Friday that it will close its 2,100 stores in the U.S. and Puerto Rico and start liquidation sales Sunday. The company is also shuttering its e-commerce operations.

The closings mark the biggest by a single chain this year and nearly doubles the number of retail stores set to close in 2019.

So what does all of this mean?

What all of this means is that this is the beginning of the end for the global economic bubble.  It is time to start getting serious about the economy again, and it is time to get prepared for the tough years that are ahead.

At this point, even the most clueless pundits in the mainstream media can see what is coming.  For example, New York Times columnist Paul Krugman is now warning that we are heading for “an unavoidable global recession” either at the end of this year or the beginning of next year…

Professor Paul Krugman has warned a series of isolated downward economic trends around the world will spiral into an unavoidable global recession towards the end of 2019 or the beginning of next year. Mr Krugman said there is not “one big thing” prompting the stark forecast but instead blamed a number of incidents happening at the same time. He said a slump in the eurozone combined with the long-running US-China trade war, President Trump’s tax policy and world leaders’ lack of preparedness are increasing the risks of a worldwide economic slowdown.

If even Paul Krugman can see what is happening, then you know that time is short.

Prior to the Great Recession of 2008 and 2009, most people never would have imagined that we were about to enter a terrible global economic downturn.  Here in the U.S., it seemed like the economy was buzzing along quite nicely, and the vast majority of us had absolutely no idea what was really going on behind the scenes.

Similarly, right now most of us are conducting our lives as if nothing is going to change.  To most people, the system seems to be functioning normally and there appears to be no cause for alarm.

Unfortunately, things are not that simple.

Rubber bands can keep stretching for quite a while, but if you put too much pressure on them they will eventually snap.  At this point there is an enormous amount of pressure on our global economic bubble, and someday it will “snap” too.

It is just a matter of time.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

The post “An Unavoidable Global Recession”: The Warnings Get Louder As Worldwide Economic Numbers Continue To Deteriorate appeared first on The Economic Collapse.

Bankruptcies in three regions covering major farm states last year rose to the highest level in at least 10 years. The Seventh Circuit Court of Appeals, which includes Illinois, Indiana and Wisconsin, had double the bankruptcies in 2018 compared with 2008. In the Eighth Circuit, which includes states from North Dakota to Arkansas, bankruptcies swelled 96%. The 10th Circuit, which covers Kansas and other states, last year had 59% more bankruptcies than a decade earlier.

There has been a lot of debate about whether or not the U.S. economy as a whole is heading into a recession in the near future, but the farming industry is already very, very deep into a major downturn, and this downturn has been caused by the trade war…

Trade disputes under the Trump administration with major buyers of U.S. farm goods, such as China and Mexico, have further roiled agricultural markets and pressured farmers’ incomes. Prices for soybeans and hogs plummeted after those countries retaliated against U.S. steel and aluminum tariffs by imposing duties on U.S. products like oilseeds and pork, slashing shipments to big buyers.

Low milk prices are driving dairy farmers out of business in a market that’s also struggling with retaliatory tariffs on U.S. cheese from Mexico and China. Tariffs on U.S. pork have helped contribute to a record buildup in U.S. meat supplies, leading to lower prices for beef and chicken.

In addition, it is also being reported that more than half of all U.S. farms are now losing money even though they continue to operate.  Needless to say, this is not sustainable, and many more farms will go out of business if this current crisis persists.

This could be the final nail in the coffin for America’s family farms.  After this crisis is over, if it ever actually ends, we may be left with only giant corporate farms and farms owned by foreign interests.

As I noted in my article yesterday, over 27 million acres of U.S. farmland is now owned by foreigners.  This should have never been allowed to happen, because it is a major national security risk.

If a trade agreement with China is reached soon, that would greatly ease the suffering of America’s farmers.  But as long as the U.S. and Canada continue to hold Huawei CFO Meng Wanzhou, that is not going to happen.  Instead, the Chinese are going to attempt to buy time by trying to get the U.S. to agree to suspend the implementation of additional tariffs as “negotiations” continue.

And on Friday, we got word that a new trade war between the United States and Europe may be about to begin…

With little apparent progress in U.S.-China trade talks, the Trump administration could be about to open up a new front in the trade wars by taking on the European auto industry — and that could spook markets.

Global financial markets have bounced back a bit in recent weeks, but more trade chaos could easily send them tumbling once again…

Some strategists fear investors are keenly focused on China, and expect a resolution, but could be surprised by ramped-up trade friction with Europe.

“The market would tank,” said Peter Boocvkar, chief investment officer at Bleakley Advisory Group. “The market has spoken loud and clear that it’s had enough of these tariffs… The market is fed up with this. Global growth is slowing dramatically because of trade. You want to put another bullet in it’s head?“

Meanwhile, we continue to get more indications that the global economy is slowing down substantially.

For example, we just learned that German industrial production plummeted dramatically for the second month in a row in December…

“Unexpectedly,” German industrial production fell 3.9% in December 2018 compared to December 2017, after having fallen by a revised 4.0% in November, according to German statistics agency Destatis Thursday morning. These two drops were steepest year-over-year drops since 2009.

Even during the European Debt Crisis in 2011 and 2012 – it hit Germany’s industry hard as many European countries weaved in and out of a recession, with some countries sinking into a depression — German industrial production never fell as fast on a year-over-year basis as in November and December

And here in the United States, General Motors has begun giving out pink slips to thousands of workers…

General Motors on Monday said it was starting to hand pink slips to about 4,000 salaried workers in the latest round of a restructuring announced in late November that will ultimately shrink its white-collar workforce in North America by 15 percent out of 54,000.

Two people briefed on the cuts said GM is cutting hundreds of jobs at its information technology centers in Texas, Georgia, Arizona and Michigan and more than 1,000 jobs at its Warren, Michigan Tech Center. GM is filing new required mass layoff notices with state agencies and disclosed the cuts to lawmakers.

Needless to say, General Motors would not be doing this if the U.S. economy really was “booming”.

A global economic downturn has arrived, and it looks like it is only going to escalate as we move deeper into 2019.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters.  His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News.  From there, his articles are republished on dozens of other prominent websites all over the nation.  If you would like to republish his articles, please feel free to do so.  The more people that see this information the better, and we need to wake more people up while there is still time.

The post Trade War Causing Severe Pain As Farm Bankruptcies Surge Way Past The Level From The Last Recession appeared first on The Economic Collapse.

And even though we have seen good quarters before, we still have not had a full year of 3 percent growth since the middle of the Bush administration.

Last year the U.S. economy grew by only 2.3 percent, which would be a horrible figure even if the government was using honest numbers. According to John Williams of shadowstats.com, GDP growth for 2017 would have actually been negative if honest numbers were being used.

So let’s not get too excited over one quarter. According to the official government numbers, the U.S. economy has not grown by at least 3 percent on an annual basis in 14 years. That is the longest stretch in all of U.S. history by a wide margin, and it is going to take a really good second half to break that string this year.

But that isn’t stopping people from hyping tomorrow’s number. According to White House economic adviser Larry Kudlow, we should see a number “in the 4 to 5 percent zone”…

“You’re going to get a GDP number on Friday that’s going to be a very impressive number. Some people are in the 4 to 5 percent zone,” Larry Kudlow, the White House economic adviser, told CBS This Morning.

And he is probably right.

In fact, we might see a number that is even better than that.

As CBS News has noted, the second quarter came after the new tax cuts were implemented but before the trade war started…

The second-quarter figure will be widely seen as a referendum on the GOP tax cuts of late 2017. This quarter benefits from a timing sweet spot, coming after the deficit-busting cuts trickled through the economy, but before the effects of the White House’s protectionist trade policies are fully felt.

If we get a really good number, it may actually be bad news for investors.

As Marketwatch has deftly observed, a high GDP growth number may affirm the Federal Reserve’s narrative that they need to keep raising rates in order to keep the economy from “overheating”…

Ultimately, a reading that comes in too hot could fuel expectations that the Federal Reserve may need to ramp up its pace of rate increases, with the possibility of a further two rate increases in September and December likely to tamp down too-hot growth. That could knock bond prices lower, conversely pushing rates up and pressuring equity markets lower as investors worry about rising borrowing costs.

Ultimately, most of the analysis that you are going to hear about this GDP number is a load of nonsense.

The only reason why the U.S. economy is showing a little bit of growth is because we are on the greatest debt binge in our history.

When Donald Trump entered the White House the U.S. government was 19.9 trillion dollars in debt, and now that figure has ballooned to 21.2 trillion dollars in debt.

If we had not added 1.3 trillion dollars to the national debt over the past year and a half, there is no way that the economy would be growing right now.

And to be honest, it wouldn’t be too difficult to ramp up GDP growth to 10 percent. All we would have to do would be to borrow and spend enough money.

So why don’t we do that?

Well, it is because we are already on a path to national suicide. It is being projected that our national debt will hit 30 trillion dollars by 2028, and neither the Republicans nor the Democrats seem concerned about doing anything to alter this trajectory.

If we do get to 30 trillion dollars in debt and interest rates return to their long-term averages, we will be paying more than 1.5 trillion dollars a year just in interest on the national debt and our nation will be financially destroyed.

Many of our largest states are absolutely drowning in debt as well. The following comes from Fox Business…

In Illinois, for instance, vendors wait months to be paid by a government that’s $30 billion in debt, and one whose bonds are just one notch above junk bond status, according to Daniels. New York’s more than $356 billion in debt; New Jersey more than $104 billion; and California more than $428 billion.

As I have explained so many times, we are living a debt-fueled standard of living that is way above what we deserve.

If we only spent what we had, the economy would immediately plunge into a depression and our standard of living would collapse. The only way to keep the party going is to borrow and spend increasingly larger amounts of money, but everyone knows that this is simply not sustainable.

And it isn’t just government debt that is the problem.

Since the last financial crisis, corporate debt has doubled.

A massive consumer debt binge has pushed credit card debt to an all-time record high, and at this point the average American household is nearly $140,000 in debt.

When you add all forms of debt together, Americans are nearly 70 trillion dollars in the hole right now. For much more on all of this, please see my previous article entitled “Why America Is Heading Straight Toward The Worst Debt Crisis In History”.

So enjoy the debt-fueled GDP numbers for now, because the truth is that they aren’t going to last for long.

Our endless appetite for debt is literally destroying the bright future that our children and our grandchildren were supposed to have, and someday they will look back and curse us for what we have done to their country.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

The post We Are About To See A Great, Big Debt-Fueled GDP Number For The 2nd Quarter, But There Is A Catch… appeared first on The Economic Collapse.

As I travel around Idaho’s first congressional district, I often tell voters that we have not had a year of 3 percent economic growth since the middle of the Bush administration, and a lot of people have a really hard time believing that this is accurate.  But of course it is 100 percent true, and earlier today CNS News published an article highlighting this fact…

The United States has gone a record 12 straight years without 3-percent growth in real Gross Domestic Product, according to data released today by the Bureau of Economic Analysis.

This drought is highly, highly unusual.  In fact, before this 12 year stretch the previous record was just four years…

Before the current period, when the nation has seen twelve straight years without 3 percent growth in real GDP, the longest stretch of years in which real GDP did not grow by at least 3 percent was during the Great Depression—when there were four straight years (1930-1933) when real GDP did not grow that much.

Have we entered a new era of low economic growth?

Is 3 percent the best that we can hope for from now on?

I have pointed out many times that Barack Obama was the only president in all of U.S. history never to have a single year of 3 percent economic growth, and he had two terms to try to achieve that.

Of course the U.S. economy began struggling far before Obama entered the White House.  As the U.S. has increasingly embraced socialism, our once vibrant economy has really had a tough time.  In fact, since the end of the Reagan administration our economic growth numbers have not been good at all…

The last time it grew by more than 7 percent was 1984, when Ronald Reagan was president. That year, it grew by 7.3 percent.

In the years after 1984, the highest level of economic growth achieved by the United States was in 1999, when real GDP grew by 4.7 percent.

Hopefully things can turn around under President Trump, and that it is why it is so imperative that we send pro-Trump candidates for Congress to Washington.

The U.S. economy is way overdue for a recession, and many believe that the next major economic downturn is right around the corner.  We just witnessed the worst February for stocks in 9 years, and the Dow ended the month on a huge down note.  Hopefully things will rebound in March, but there is absolutely no guarantee that will happen.

The following are some more facts about what transpired in February from Zero Hedge…

• Trannies worst month since Jan 2016
• Small Caps worst month since Oct 2016
• VIX biggest monthly jump since Aug 2015
• 30Y TSY Yield biggest monthly jump since Nov 2016
• 2Y TSY Yield up 6 straight months
• HY Credit (HYG) worst month since Jan 2016
• HY Spreads worst month since Sept 2015
• USD Index up most since Feb 2017
• WTI worst month since Aug 2017
• Gold worst month since Sept 2017
• Silver worst month since Nov 2016

I know that I didn’t write very much this month, and that is because I have been relentlessly working to win my race for Congress.

We are less than 80 days away from May 15th, and it is an exceedingly close race between me and three other major candidates.

If you live in Idaho’s first congressional district, please mark May 15th on your calendar.  Our numbers are surging and we feel very good about the race, but without a doubt we are going to need every single vote that we can get.

Michael Snyder is a pro-Trump candidate for Congress in Idaho’s First Congressional District.  If you would like to help him win on May 15th, you can donate online, by Paypal or by sending a check made out to “Michael Snyder for Congress” to P.O. Box 1136 – Bonners Ferry, ID 83805.  To learn more, please visit MichaelSnyderForCongress.com.

The post 12 Years In A Row And Counting: The U.S. Has Not Had A Year Of 3 Percent Economic Growth In More Than A Decade appeared first on The Economic Collapse.

Just five days ago, I published one of the most important articles that I have ever written.  It was entitled “The Real Reason Why America Has Been Given A Reprieve“, and in that article I explained why the U.S. has experienced a season of blessing since blocking a potential UN Security Council resolution that France wanted to introduce that would have formally divided the land of Israel in September 2015.  If you have not read that article yet, please go back and read it, because it will be of great aid in understanding why this new UN Security Council resolution is so incredibly important.

As I stated in that previous article, it is my contention that the reason why things have gone so well for the United States over the past 16 months is because Barack Obama made the right decision in September 2015 and chose to protect the land of Israel from being divided.

But now that Barack Obama has reversed course and has greatly betrayed Israel, is America’s reprieve now over?

For months, I have been warning that Barack Obama may do something like this at the UN during the waning days of his presidency.  You can see some examples of my previous warnings here, here and here.  And I have also been warning about the severe consequences that the United States would face if our government did ultimately decide to betray Israel.

This UN Security Council resolution that was passed on Friday was originally going to be put up for a vote on Thursday.  But after enormous pressure from the government of Israel and from President-elect Donald Trump, Egypt decided to withdraw the resolution that they had proposed at the last moment.

When that happened, it looked like everything was going to be okay.

However, temporary members of the UN Security Council New Zealand, Malaysia, Venezuela and Senegal immediately objected to Egypt’s move, and they indicated that they would submit the resolution for a vote if Egypt would not.

So on Friday a vote took place, and Obama did what many had been fearing.  The following comes from the New York Times…

Defying extraordinary pressure from President-elect Donald J. Trump and furious lobbying by Israel, the Obama administration on Friday allowed the United Nations Security Council to adopt a contentious resolution that condemned Israeli settlement construction.

The administration’s decision not to veto the measure broke a longstanding American tradition of serving as Israel’s sturdiest diplomatic shield.

President-elect Trump publicly said that he would have vetoed this resolution, but now it will be virtually impossible for him to reverse it.

Another vote of the UN Security Council would be necessary to reverse it, and the votes simply would not be there.  And even if they were, either Russia or China could use the veto power that they possess to block it.

So this resolution is going to be permanent, and it is considered to be legally binding on both Israel and the Palestinians.

It seems fitting that Barack Obama is vacationing in Hawaii while all of this drama is playing out.  Perhaps while he is on the golf course he is enjoying a good laugh about how he really stuck it to his long-time nemesis Israeli Prime Minister Benjamin Netanyahu.

Needless to say, the Israeli government is absolutely furious that Obama has betrayed them.  The following comes from U.S. News & World Report…

An Israeli official on Friday accused President Barack Obama of colluding with the Palestinians in a “shameful move against Israel at the U.N.” after learning the White House did not intend to veto a Security Council resolution condemning settlement construction in the West Bank and east Jerusalem the day before.

“President Obama and Secretary Kerry are behind this shameful move against Israel at the U.N.,” the official said. “The U.S administration secretly cooked up with the Palestinians an extreme anti-Israeli resolution behind Israel’s back which would be a tail wind for terror and boycotts and effectively make the Western Wall occupied Palestinian territory,” he said calling it “an abandonment of Israel which breaks decades of US policy of protecting Israel at the UN.”

You can read the full text of the UN Security Council resolution that was just adopted right here.  These are some of the highlights that I pulled out of the document…

-It refers to Israel as “the occupying Power”

-It calls for a “two-State solution based on the 1967 lines”

-It speaks of a Middle East “where two democratic States, Israel and Palestine, live side by side in peace within secure and recognized borders”

-It demands “the dismantlement of all settlement outposts erected since March 2001”

-To me, the following is the key paragraph in the entire resolution…

Reaffirms that the establishment by Israel of settlements in the Palestinian territory occupied since 1967, including East Jerusalem, has no legal validity and constitutes a flagrant violation under international law and a major obstacle to the achievement of the two-State solution and a just, lasting and comprehensive peace

-It stipulates “that Israel immediately and completely cease all settlement activities in the occupied Palestinian territory, including East Jerusalem”

-It states that the UN Security Council “will not recognize any changes to the 4 June 1967 lines, including with regard to Jerusalem, other than those agreed by the parties through negotiations”

-It expresses a belief that “the cessation of all Israeli settlement activities is essential for salvaging the two-State solution, and calls for affirmative steps to be taken immediately to reverse the negative trends on the ground that are imperilling the two-State solution”

-It calls on all UN member states “to distinguish, in their relevant dealings, between the territory of the State of Israel and the territories occupied since 1967”

This is the most anti-Israel resolution that the UN Security Council has ever passed, and it never would have happened without Barack Obama’s approval.

The Israeli government and the Obama administration have had a very strained relationship for years, and this moment represents the culmination of tensions that have been building for a very long time.

But does this resolution actually represent the “division of the land of Israel” at the United Nations that so many have been waiting for?

I don’t know if I have a definitive answer to that question for you today.  The language of this resolution does not directly give formal recognition to a Palestinian state, but it does speak of a “democratic state” of “Palestine”, and it does speak of “Palestinian territory”.  It calls Israel “the occupying Power”, and it does say that all Israeli settlements in the West Bank and in East Jerusalem are illegal.  And on top of everything else, the UN Security Council clearly stated that it “will not recognize any changes to the 4 June 1967 lines, including with regard to Jerusalem, other than those agreed by the parties through negotiations”.

So it seems clear that the UN Security Council has affirmed three major points that we have been watching for…

#1 A Palestinian state exists.

#2 The 1967 ceasefire lines represent the borders between the state of Israel and Palestine, but future negotiations between Israel and the Palestinians could alter these borders.

#3 East Jerusalem belongs to the Palestinians.  This resolution does not refer to East Jerusalem as the future capital of Palestine, but that is obviously what is intended.

But perhaps another resolution will come later which will give official UN Security Council recognition to a Palestinian state.

At this point, we just don’t know.

However, what we do know is that for decades whenever the U.S. has taken steps toward dividing the land of Israel it has resulted in dramatic consequences for our nation.

It is my contention that this betrayal of Israel at the United Nations by Barack Obama represents a major turning point.  I believe that America’s reprieve is now over, and that many of the things that people have been anticipating since September 2015 will start happening.

Barack Obama just made the worst decision of his entire presidency, and from this point forward nothing is ever going to be the same again.

The post Obama Betrays Israel At The United Nations – Is America’s Reprieve Now Over? appeared first on The Economic Collapse.

Compared to much of the rest of the world, America appears to have been blessed over the past year and a half.  Our financial markets have performed extremely well, the U.S. dollar is the strongest that is has been in over a decade, and jobs are coming back to the United States.

None of this was supposed to happen.  In fact, our financial system was in such bad shape a year and a half ago that it was being projected that the U.S. would be on the bleeding edge of the next crisis.  But instead here we stand safe, prosperous and seemingly secure.

How in the would can we explain this?

What I am about to share with you I have previously shared on national television down at Morningside, but it has been brought to my attention that I have never shared this with my readers on The Economic Collapse Blog.  I apologize for this, because the past year and a half doesn’t make any sense until you understand these things.

When people look back at September 2015, they always forget the most critical event.  In addition to everything else that was going on that month, France had a UN Security Council resolution all ready to go that would have permanently divided the land of Israel, that would have given formal UN Security Council recognition to a Palestinian state for the very first time, and that would have given East Jerusalem to the Palestinians as the capital of their new state.

The rest of the UN Security Council was ready to go along with the French resolution, but there was just one country standing in the way.

The United States has veto power on the UN Security Council, and so the Obama administration had the power to potentially block the resolution.  After carefully considering the matter, the Obama administration decided that it was not the time for such a resolution, and so France never submitted it for a vote.

Just about everything else that Barack Obama did throughout his entire presidency was bad, but in this instance he got something completely right.  The decision whether or not to divide the land of Israel was in his hands, and he made the right call.

Once this decision was made, it was almost as if someone hit a “pause button”.  None of the bad things that people were forecasting ending up happening, and since that decision America has been blessed compared to the rest of the world.

And this is perfectly consistent with what God said that He would do.  Starting in Genesis 12 and continuing all throughout the Scriptures, God promises to bless those that bless Israel and to curse those that curse Israel.

In this case, Barack Obama blessed Israel by preventing the UN Security Council from dividing the land, and so we were blessed as a result.

But of course there have been many other instances over the past several decades when we have been cursed as a nation for attempting to take steps toward the division of the land of Israel.  One of the most notable instances took place in 1991 when George H. W. Bush got the Israelis and the Palestinians together for the very first time to discuss the dividing of the land of Israel into two states…

At that conference, the New York Times reported that Bush told Israel that “territorial compromise is essential for peace”.  Needless to say, this upset a lot of people…

At the exact same time that conference was going on, the “Perfect Storm” was raging in the North Atlantic.  Three major storms merged together, and instead of canceling one another out, they formed the kind of storm that is normally only seen once in a lifetime.  If you will remember, Hollywood made a big blockbuster with George Clooney that was based on this storm.  This gigantic storm went 1000 miles the wrong direction and slammed directly into the home of George H. W. Bush while he was at the Madrid conference talking about the need to divide the land of Israel…

Another very notable example of this phenomenon came in 2005.  At that time, George W. Bush (the son of George H. W. Bush) had convinced Israel that it should pull all of the settlers out of Gaza and turn it entirely over to the Palestinians.  According to the New York Times, the last of the settlers was evacuated on August 23, 2005…

On that exact same day, a little storm that came to be known as Hurricane Katrina formed over the Bahamas.  It shocked forecasters by turning directly toward New Orleans, and it ultimately became the costliest natural disaster in all of U.S. history up until that time.

There are dozens more examples like this, and men like John McTernan, William Koenig and David Brennan have done a great job documenting them.

Today, 137 nations have already recognized a Palestinian state.  The holdouts are mostly in North America and Europe…

France and most of the rest of Europe have been eager and ready to recognize a Palestinian state for quite a while now, but they don’t really want to move forward without the United States.

And of course they can’t officially do anything at the UN Security Council without U.S. approval.

Barack Obama had been hoping to achieve something through direct negotiations between the Israelis and the Palestinians, but those totally broke down and there is no hope that there will be any new negotiations any time soon.

So Barack Obama knows that his only shot at “leaving a legacy” in the Middle East is at the United Nations, and earlier this year he said that a UN Security Council resolution that would recognize a Palestinian state was “on the table” for the very first time…

At that time he did not indicate which way that he would go, and although there have been rumblings that something might happen, he has not taken any action yet.

But now time is running out for Obama, because his term is scheduled to end on January 20th.  The advocates of a “two state solution” are becoming increasingly desperate, because they know that Donald Trump has already promised not to support a UN Security Council resolution that would divide the land of Israel.  So they know that if something is going to be done, it has got to be done now.

A UN Security Council resolution would be legally binding on both the Israelis and the Palestinians, and it would be something that Donald Trump would not be able to undo.  Another vote of the UN Security Council would be required to revoke a resolution once it has been passed, and the votes would not be there to do that.

So the next month is absolutely critical.  The UN Security Council still has time to take action while Obama is still in office, and we know that such a move is actively being considered.  For much, much more on this, please see the following articles that I have recently authored…

-“Jimmy Carter Urges Barack Obama To Divide The Land Of Israel At The United Nations Before January 20th”

-“John Bolton Warns That Obama May Divide The Land Of Israel At The UN Before The Inauguration”

-“The Danger Zone: Why Israel Greatly Fears Barack Obama’s Last Few Months In Office”

-“The New York Times Calls For Obama To Support A UN Resolution That Would Divide The Land Of Israel”

If we can get to January 20th and the land of Israel has not been divided by the UN Security Council and Donald Trump successfully takes office, perhaps our reprieve will be extended for a while.

But if Barack Obama very foolishly allows the land of Israel to be divided at the UN Security Council before January 20th, the “pause button” will be unpaused, our blessing will be turned into a curse, and all hell will break loose in America.

The post The Real Reason Why America Has Been Given A Reprieve appeared first on The Economic Collapse.

Let’s take a closer look at some of the large cities all over America that are degenerating into gang-infested war zones…

East St. Louis

East St. Louis has a national reputation for being a city that you want to avoid.  The following is from a recent Bloomberg article about the growing crime in that community…

Dodging open manholes where thieves had swiped cast-iron covers, Stephen Wigginton drives the crumbling streets of his hometown, East St. Louis, Illinois, pointing out new landmarks in America’s most violent city.

There’s the shopping mall where a police officer was shot in the face, a youth center that saw a triple homicide in September, and scattered about the city of 27,000 are brightly lit gas stations that serve as magnets for carjackers, hit-and-run robbers and killers.

“It’s the Wild West,” said Wigginton, the U.S. attorney for the Southern District of Illinois.

Today, the murder rate in East St. Louis is 17 times higher than the national average, but financial problems have forced huge cuts to the police budget.  The number of police patrolling the streets of East St. Louis was reduced by 33 percent between 2008 and 2011.  Police in the city admit that they are outgunned and outmanned, but there is not much that can be done about it.

Camden

Camden, New Jersey is another city that has experienced huge cuts to the police budget.  Their police force shrank by about a third between 2008 and 2011.  Today, Camden is considered to be one of the most dangerous cities in America and it has a murder rate that is about ten times higher than New York City.

The gangs have a very strong hold over Camden, and kids kill kids on a regular basis in the city.  The following is a brief excerpt from a recent article about the horrible violence that is plaguing Camden…

At the vigil last week, residents prayed that Camden would simply find peace and that the masked gunman who killed Jewel Manire and Khalil Gibson would be caught.

As it grew darker, Michael Benjamin stood toward the back of the crowd, his son huddled even closer now, and shook his head.

“I’ve known at least 45 kids who’ve been killed in my lifetime,” he said, the boy holding his finger. “I stopped counting in 2004, though.”

Chicago

In recent years there have been massive cuts to the police budget in Chicago due to financial difficulties.  At the same time, gang activity has dramatically increased in the city.

As a result, Chicago has become known for murders and violence.  The murder rate in Chicago was about 17 percent higher in 2012 than it was in 2011, and Chicago is now considered to be “the deadliest global city“.

If you can believe it, the number of murders in Chicago during 2012 was roughly equivalent to the number of murders in the entire country of Japan during 2012.

And the primary reason for all of this violence in Chicago is the gangs.  As I have written about previously, there are only about 200 police officers assigned to Chicago’s Gang Enforcement Unit.  It is their job to handle the estimated 100,000 gang members living in the city.

Approximately 80 percent of all murders and shootings in the city of Chicago are gang-related, and as the gangs continue to grow in size the violence in the city is going to get even worse.  If Barack Obama wants to do something about violence in America, perhaps he should start with his home city.

Detroit

I write a lot about Detroit, but that is because they are a perfect example of where the rest of America is headed if something dramatic is not done.

Detroit used to be one of the greatest manufacturing cities the world has ever seen, but over the past several decades the economic infrastructure of Detroit has been gutted and now there is very little industry left in the city.

Over half the children in the city live in poverty and a sense of hopelessness hangs in the air.  At the same time, financial problems have forced the city to lay off huge numbers of cops.  Back in 2005, there were about 4,000 police officers in Detroit.  Today there are only about 2,500 and another 100 are scheduled to be eliminated from the force soon.

Meanwhile, crime in Detroit just continues to get even worse.  There were 377 homicides in Detroit in 2011.  In 2012, that number rose to 411.

Things have gotten so bad that even even the Detroit police are telling people to “enter Detroit at your own risk“.

New Orleans

New Orleans was a crime-infested city even before Hurricane Katrina hit it in 2005, but life has never quite been the same since that time.

The gangs have a very strong presence in the city, and there simply are not enough financial resources to keep crime in check.

If New Orleans was considered to be a separate nation, it would have the 2nd highest murder rate on the entire planet.  There are some areas of New Orleans that you simply do not ever want to venture into at night.

Meanwhile, the police force has been such a mess in recent years that the federal government finally decided to step in.  It is hoped that the “reforms” will mean less crime in New Orleans in future years, but I wouldn’t count on it.

Oakland

Today, there are 626 police officers in Oakland, California.  That is about a 25 percent decline from the 837 police officers that were patrolling the streets of Oakland back in December 2008.

Predictably, criminals have stepped in and have taken advantage of the situation.  At one point in 2012, burglaries in the city of Oakland were up 43 percent over the previous year.

If you can believe it, more than 11,000 homes, cars and businesses were burglarized in Oakland during 2012.  That breaks down to approximately 33 burglaries a day.

Stockton

Police cuts in the city of Stockton, California have been so severe that the Stockton Police Officers’ Association ran a billboard advertisement with the following message at one point: “Welcome to the 2nd most dangerous city in California: Stop laying off cops!”

At the same time, crime in Stockton continues to get even worse.  there have been more than 250 gold chain robberies in Stockton since the month of April, and there is no indication that crime in the city is going to slow down any time soon.

So what is the solution?

Should we have everyone turn in their guns?

No, that would just make the problem even worse.  The gangs aren’t going to turn in their guns.  The only people who would turn in their guns would be law-abiding citizens.  That would just make them even more vulnerable to the violence and crime that are starting to spread like wildfire all over the nation.

We don’t have a gun problem in America.  What we have is a gang problem.

In 2006, the Justice Department’s National Drug Intelligence Center reported that Mexican drug cartels were actively operating in 50 different U.S. cities.  By 2010, that number had risen to 1,286.

Many of these gang members run up long criminal records, but our overcrowded prison systems just keep releasing them back into the streets.  The results of this philosophy have been predictable.  The following is from a recent article by Daniel Greenfield…

A breakdown of the Chicago killing fields shows that 83% of those murdered in Chicago last year had criminal records. In Philly, it’s 75%. In Milwaukee it’s 77% percent. In New Orleans, it’s 64%. In Baltimore, it’s 91%. Many were felons who had served time. And as many as 80% of the homicides were gang related.

Chicago’s problem isn’t guns; it’s gangs. Gun control efforts in Chicago or any other major city are doomed because gangs represent organized crime networks which stretch down to Mexico, and trying to cut off their gun supply will be as effective as trying to cut off their drug supply.

This is not a time to take away the ability of law-abiding American families to defend themselves.  Instead, people need to put even more emphasis on self-defense as police forces all over the country are cut back.

Just recently, the city attorney of San Bernardino, California told citizens living there to “lock their doors and load their guns” because the police force in that city is being cut back again.

And that is good advice.  As the economy continues to decline and as millions more Americans fall into poverty, the violence is going to get even worse.

What would you do if a desperate criminal broke into your house and started searching through your home room by room?  That is the horrifying situation that one young mother down in Georgia was recently faced with…

She quickly retreated to an attic crawlspace with the children, but not before she also picked up her handgun.

The burglar, whom police identified as Paul Ali Slater, did a room-by-room search of the home, and when he reached the attic, she was ready.

Walton County Sheriff Joe Chapman told WSBTV: ‘The perpetrator opens that door. Of course, at that time he’s staring at her, her two children and a .38 revolver.’

She reportedly fired all six rounds, missing only once. The other shots hit Slater about the face and neck.

Sheriff Chapman told the Atlanta Journal-Constitution: ‘The guy’s face down, crying. The woman told him to stay down or she’d shoot again.’

What would have happened if she had not had any way to defend herself and her children?

That is something that we all need to think about.

For the last couple of decades, we have been fortunate to live in an era of falling crime rates.  Unfortunately, that era is now over.  Large cities all over the country are degenerating into gang-infested war zones, and what we are seeing right now is just the tip of the iceberg.

After the economy collapses, millions of people are going to become incredibly desperate and things are going to get much, much worse than this.

So what are you seeing in your area of the country?  Please feel free to leave a comment with your thoughts below…

The post Large Cities All Over America Are Degenerating Into Gang-Infested War Zones appeared first on The Economic Collapse.

One of the fundamental problems with our current financial system is that it is based on debt.  Just take a look at the United States.  The way our system works today, the vast majority of all money is “created” either when we borrow money or the government borrows money.  Therefore, the creation of more money creates more debt.  Under such a system, it should not be surprising that the total amount of debt in the United States is more than 30 times larger than it was just 40 years ago.

We don’t have to do things this way.  There is a better alternative.  National governments can directly issue debt-free currency into circulation.  The following is a brief excerpt from the IMF report…

At the height of the Great Depression a number of leading U.S. economists advanced a proposal for monetary reform that became known as the Chicago Plan. It envisaged the separation of the monetary and credit functions of the banking system, by requiring 100% reserve backing for deposits. Irving Fisher (1936) claimed the following advantages for this plan: (1) Much better control of a major source of business cycle fluctuations, sudden increases and contractions of bank credit and of the supply of bank-created money. (2) Complete elimination of bank runs. (3) Dramatic reduction of the (net) public debt. (4) Dramatic reduction of private debt, as money creation no longer requires simultaneous debt creation. We study these claims by embedding a comprehensive and carefully calibrated model of the banking system in a DSGE model of the U.S. economy. We find support for all four of Fisher’s claims.

Why should banks be allowed to create money?

That is a very good question.

Why should sovereign governments ever have to borrow money from anyone?

That is another very good question.

Our current system is designed to enrich the bankers and get everyone else into debt.

And is that not exactly what has happened?

Taking the creation of money away from the bankers would have some tremendous advantages.  A recent article by renowned financial journalist Ambrose Evans-Pritchard described some of these benefits…

One could slash private debt by 100pc of GDP, boost growth, stabilize prices, and dethrone bankers all at the same time. It could be done cleanly and painlessly, by legislative command, far more quickly than anybody imagined.

The conjuring trick is to replace our system of private bank-created money — roughly 97pc of the money supply — with state-created money. We return to the historical norm, before Charles II placed control of the money supply in private hands with the English Free Coinage Act of 1666.

Specifically, it means an assault on “fractional reserve banking”. If lenders are forced to put up 100pc reserve backing for deposits, they lose the exorbitant privilege of creating money out of thin air.

The nation regains sovereign control over the money supply. There are no more banks runs, and fewer boom-bust credit cycles.

So why don’t we go to such a system immediately?

Well, the transition to such a system would undoubtedly be a major shock to the global financial system, and most people try to avoid significant short-term pain even if there are tremendous long-term benefits.

More importantly, however, is that the bankers have a tremendous amount of power in our society today, and they would move heaven and earth to keep a debt-free monetary system from ever being implemented.

You see, the influence of the bankers is not just limited to the big banks.  Our largest financial institutions (and the people who own them) also have large ownership stakes in the vast majority of the big Fortune 500 corporations.  In essence, the big banks are at the very pinnacle of “the establishment” in the United States and in almost every other major country in the western world.

And the vast majority of all political campaigns are funded by “the establishment”.  It takes an enormous amount of money to win campaigns these days, and most politicians are extremely hesitant to bite the hands of those that feed them.

So don’t expect any changes to happen overnight.

One proposal that has actually been put forward in Congress is to cancel all of the government debt that the Federal Reserve is currently holding.  Right now, the Fed is holding more than 1.6 trillion dollars of U.S. government debt…

That would seem to make a lot of sense.  That would immediately wipe more than 1.6 trillion dollars from the U.S. national debt without any real harm being done.

But “the establishment” would be horrified if such a thing happened, so I wouldn’t anticipate it happening any time soon.

Hopefully we can get the American people (along with people all over the globe) educated about these things so that we can start to get millions of people pushing for change.

A debt-free monetary system is superior to a debt-based monetary system in so many ways.

For example, if the U.S. government directly spent debt-free money into circulation, it could conceivably never need to borrow a single dollar ever again.  If the government wanted to spend more money than it brought in, it would simply print it up and spend it.

Of course the big danger with that would be inflation.  That is why it would be imperative for there to be a hard cap on what the government could spend.  For example, you could set the cap on spending by the federal government at 20 percent of GDP.  That way we would never end up looking like the Weimar Republic.

And the current federal debt could be paid down a little at a time using newly created debt-free dollars.  This would have to be done slowly to keep inflation under control, but it could be done.

That way we would not hand a 16 trillion dollar debt to our children and our grandchildren.  We created this mess so we should clean it up.

Theoretically you could also do away with the federal income tax if you wanted to.  Personally, I would like to see the federal government be funded to a large degree by tariffs on foreign goods.  That would also have the side benefit of bringing millions of jobs back into the United States.

Our system of income tax collection is just so incredibly inefficient.  It costs us mind boggling amounts of time and money.  Just consider the following stats from one of my previous articles…

1 – The U.S. tax code is now 3.8 million words long.  If you took all of William Shakespeare’s works and collected them together, the entire collection would only be about 900,000 words long.

2 – According to the National Taxpayers Union, U.S. taxpayers spend more than 7.6 billion hours complying with federal tax requirements.  Imagine what our society would look like if all that time was spent on more economically profitable activities.

3 – 75 years ago, the instructions for Form 1040 were two pages long.  Today, they are 189 pages long.

4 – There have been 4,428 changes to the tax code over the last decade.  It is incredibly costly to change tax software, tax manuals and tax instruction booklets for all of those changes.

5 – According to the National Taxpayers Union, the IRS currently has 1,999 different publications, forms, and instruction sheets that you can download from the IRS website.

6 – Our tax system has become so complicated that it is almost impossible to file your taxes correctly.  For example, back in 1998 Money Magazine had 46 different tax professionals complete a tax return for a hypothetical household.  All 46 of them came up with a different result.

7 – In 2009, PC World had five of the most popular tax preparation software websites prepare a tax return for a hypothetical household.  All five of them came up with a different result.

8 – The IRS spends $2.45 for every $100 that it collects in taxes.

For long stretches of our history the United States did not have any income tax, and during those times we thrived.  It is entirely conceivable that we could return to such a system.

At this point, the wealthy have become absolute masters at hiding their wealth from taxation.  According to the IMF, a total of 18 trillion dollars is currently being hidden in offshore banks.  What we are doing right now produces very inequitable results and it is not working.

In many ways, inflation would be a much fairer “tax” than the income tax because inflation taxes each dollar equally.  Nobody would be able to cheat the system.

But if people really love the IRS and the federal income tax, we could keep them under a debt-free money system.  I just happen to think that the IRS and the federal income tax are both really bad ideas that have never served the interests of the American people.

In any event, hopefully you can see that there is a much broader range of solutions to our problems than the two major political parties have been presenting to us.

We do not have to allow the banks to create our money.

The federal government does not have to go into more debt.

We don’t actually need the Federal Reserve.

There are alternatives to the federal income tax and the IRS.

Yes, it is very true that no system would be perfect.  But clearly the path that we are on is only going to lead to disaster.  U.S. government finances are a complete and total nightmare, and this mountain of debt that we have accumulated is going to absolutely destroy us if we allow it to.

So somebody out there should be proposing a fundamental change in direction for our financial system.

Unfortunately, our politicians are just proposing more of the same, and we all know where that is going to lead.

The post What If We Adopted A System Where The Banks Did Not Create Our Money? appeared first on The Economic Collapse.

It is important to understand that Paul Krugman is a hardcore Keynesian.  He believes that national governments can solve most economic problems simply by spending more money.  His prescription for the U.S. economy in 2012 was summarized in a recent Rolling Stone article….

The basic issue, says Krugman, is a lack of demand. American consumers and businesses, aren’t spending enough, and efforts to get them to open their wallets have gone nowhere. Krugman’s solution: The federal government needs to step in and spend. A lot. On debt relief for struggling homeowners; on infrastructure projects; on aid to states and localities; on safety-net programs. Call it “stimulus” if you like. Call it Keynesian economics, after the great economic thinker (and Krugman idol) John Maynard Keynes, who first championed the idea that government has an essential role in saving the free market from its own excesses.

So is Krugman right?

Would the U.S. economy improve if the federal government borrowed and spent an extra half a trillion dollars this year for example?

Yes, it would.

But it would also get us half a trillion dollars closer to bankruptcy as a nation.

Krugman claims that “austerity” has failed, but the truth is that we have not even seen any real “austerity” yet.

When a government spends more than it brings in, that is not real austerity.

People talk about the “austerity” that we have seen in places such as Greece and Spain, but the truth is that both nations are still piling up huge amounts of new debt.

So let’s not pretend that the western world is serious about austerity.

The goal for most European nations at this point is to get their debts down to “sustainable” levels.

But for economists such as Krugman, this is a very bad idea.  Krugman insists that cutting government spending during a recession is a very stupid thing to do.  The following is from one of his recent articles in the New York Times….

For the past two years most policy makers in Europe and many politicians and pundits in America have been in thrall to a destructive economic doctrine. According to this doctrine, governments should respond to a severely depressed economy not the way the textbooks say they should — by spending more to offset falling private demand — but with fiscal austerity, slashing spending in an effort to balance their budgets.

Critics warned from the beginning that austerity in the face of depression would only make that depression worse. But the “austerians” insisted that the reverse would happen. Why? Confidence! “Confidence-inspiring policies will foster and not hamper economic recovery,” declared Jean-Claude Trichet, the former president of the European Central Bank — a claim echoed by Republicans in Congress here. Or as I put it way back when, the idea was that the confidence fairy would come in and reward policy makers for their fiscal virtue.

Yes, Krugman is correct that government austerity measures will only make a recession worse.

Just look at what has happened in Greece.  Wave after wave of austerity measures has pushed Greece into an economic depression.  If you want to see what austerity has done to the unemployment rate in Greece, just check out this chart.

As other nations across Europe have taken measures to get debt under control, we have seen similar economic results all across the continent.

The overall unemployment rate in the eurozone has hit 10.9 percent which is a new all-time high, and youth unemployment rates throughout Europe are absolutely skyrocketing.

Right now there are already 12 countries in Europe that are officially in a recession, and in many European nations manufacturing activity is slowing down dramatically.

So, yes, austerity is not helping short-term economic conditions in Europe.

But what are the nations of the western world supposed to do?

According to Krugman, they are supposed to run up gigantic amounts of new debt indefinitely.

And that is what the United States is doing right now.  But at some point the clock strikes midnight and all of a sudden you have become the “next Greece”.

U.S. government debt is already rising much, much faster than U.S. GDP is.

Between 2007 and 2010, U.S. GDP grew by only 4.26 percent, but the U.S. national debt soared by 61 percent during that same time period.

Today, the U.S. national debt is equivalent to 101.5 percent of U.S. GDP.

But Paul Krugman does not consider this to be a major problem.

The Obama administration is currently stealing approximately 150 million dollars from our children and our grandchildren every single hour to finance our reckless spending, but for Paul Krugman that is not nearly good enough.

To Krugman, the only thing that is important is what is happening right now.  Apparently the future can be thrown into the toilet as far as he is concerned.

The founder of PIMCO, Bill Gross, told CNBC on Tuesday that the U.S. government is likely to be hit with another credit rating downgrade this year if something is not done about our exploding debt.

The United States already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain does.

But Krugman insists that the solution to our economic problems is even more debt and even more spending.

In a previous article, I detailed how we are doomed if the U.S. government keeps spending money wildly like this and we are doomed if the U.S. governments stops spending money wildly like this.

If we keep running trillion dollar deficits every year, at some point our financial system will collapse, the U.S. dollar will fail, and we will essentially be facing national bankruptcy.

But if the federal government stops borrowing and spending money like this, our debt-fueled prosperity will rapidly disappear, unemployment will shoot well up into double digits, and we will soon have mass rioting in major U.S. cities.

The truth is that we have already been following Paul Krugman’s economic prescription for the nation for decades.  Our 15 trillion dollar party has funded a standard of living unlike anything the world has ever seen, but the party is coming to an end.

The Federal Reserve is trying to keep the party going by buying up huge amounts of government debt.  The Fed actually purchased approximately 61 percent of all government debt issued by the U.S. Treasury Department in 2011.

It is a shell game that cannot go on for too much longer.

The national debt crisis can be delayed for a while, but at some point the house of cards is going to come crashing down on top of us all.

If Paul Krugman wanted to talk about real solutions he could talk about shutting down the Federal Reserve and he could talk about going to an entirely debt-free currency.

But we all know that is not going to happen, don’t we?

As I have written about before, the Federal Reserve was designed to be a perpetual government debt machine.  The system was designed to have the amount of money and the amount of government debt constantly expand.

And it has been working quite well in that regard.  At this point, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was first created.

But Paul Krugman is not going to talk about the real issues.  Instead, he is just going to keep running around declaring that more government spending and more government debt will solve all of our problems.

It is a very big lie, but millions of people are going to believe it.

The post Why New York Times Economist Paul Krugman Is Partly Right But Mostly Wrong appeared first on The Economic Collapse.