Our Economy

75 Economic Numbers From 2012 That Are Almost Too Crazy To Believe

75 Economic Numbers From 2012 That Are Almost Too Crazy To BelieveWhat a year 2012 has been!  The mainstream media continues to tell us what a “great job” the Obama administration and the Federal Reserve are doing of managing the economy, but meanwhile things just continue to get even worse for the poor and the middle class.  It is imperative that we educate the American people about the true condition of our economy and about why all of this is happening.  If nothing is done, our debt problems will continue to get worse, millions of jobs will continue to leave the country, small businesses will continue to be suffocated, the middle class will continue to collapse, and poverty in the United States will continue to explode.  Just “tweaking” things slightly is not going to fix our economy.  We need a fundamental change in direction.  Right now we are living in a bubble of debt-fueled false prosperity that allows us to continue to consume far more wealth than we produce, but when that bubble bursts we are going to experience the most painful economic “adjustment” that America has ever gone through.  We need to be able to explain to our fellow Americans what is coming, why it is coming and what needs to be done.  Hopefully the crazy economic numbers that I have included in this article will be shocking enough to wake some people up.

The end of the year is a time when people tend to gather with family and friends more than they do during the rest of the year.  Hopefully many of you will use the list below as a tool to help start some conversations about the coming economic collapse with your loved ones.  Sadly, most Americans still tend to doubt that we are heading into economic oblivion.  So if you have someone among your family and friends that believes that everything is going to be “just fine”, just show them these numbers.  They are a good summary of the problems that the U.S. economy is currently facing.

The following are 50 economic numbers from 2012 that are almost too crazy to believe…

#1 In December 2008, 31.6 million Americans were on food stamps.  Today, a new all-time record of 47.7 million Americans are on food stamps.  That number has increased by more than 50 percent over the past four years, and yet the mainstream media still has the gall to insist that “things are getting better”.

#2 Back in the 1970s, about one out of every 50 Americans was on food stamps.  Today, about one out of every 6.5 Americans is on food stamps.

#3 According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”

#4 According to one recent survey, 55 percent of all Americans have received money from a safety net program run by the federal government at some point in their lives.

#5 For the first time ever, more than a million public school students in the United States are homeless.  That number has risen by 57 percent since the 2006-2007 school year.

#6 Median household income in the U.S. has fallen for four consecutive years.  Overall, it has declined by over $4000 during that time span.

#7 Families that have a head of household under the age of 30 have a poverty rate of 37 percent.

#8 The percentage of working age Americans with a job has been under 59 percent for 39 months in a row.

#9 In September 2009, during the depths of the last economic crisis, 58.7 percent of all working age Americans were employed.  In November 2012, 58.7 percent of all working age Americans were employed.  It is more then 3 years later, and we are in the exact same place.

#10 When you total up all working age Americans that do not have a job in America today, it comes to more than 100 million.

#11 According to one recent survey, 55 percent of all small business owners in America “say they would not start a business today given what they know now and in the current environment.”

#12 The number of jobs at new small businesses continues to decline.  According to economist Tim Kane, the following is how the decline in the number of startup jobs per 1000 Americans breaks down by presidential administration…

Bush Sr.: 11.3

Clinton: 11.2

Bush Jr.: 10.8

Obama: 7.8

#13 The U.S. share of global GDP has fallen from 31.8 percent in 2001 to 21.6 percent in 2011.

#14 The United States has fallen in the global economic competitiveness rankings compiled by the World Economic Forum for four years in a row.

#15 There are four major U.S. banks that each have more than 40 trillion dollars of exposure to derivatives.

#16 In 2000, there were more than 17 million Americans working in manufacturing, but now there are less than 12 million.

#17 According to the Pew Research Center, 61 percent of all Americans were “middle income” back in 1971.  Today, only 51 percent of all Americans are.

#18 The Pew Research Center has also found that 85 percent of all middle class Americans say that it is harder to maintain a middle class standard of living today than it was 10 years ago.

#19 62 percent of all middle class Americans say that they have had to reduce household spending over the past year.

#20 Right now, approximately 48 percent of all Americans are either considered to be “low income” or are living in poverty.

#21 Approximately 57 percent of all children in the United States are living in homes that are either considered to be either “low income” or impoverished.

#22 According to one survey, 77 percent of all Americans are now living paycheck to paycheck at least part of the time.

#23 Back in 1950, more than 80 percent of all men in the United States had jobs.  Today, less than 65 percent of all men in the United States have jobs.

#24 The average amount of time that an unemployed worker stays out of work in the United States is 40 weeks.

#25 If you can believe it, approximately one out of every four American workers makes 10 dollars an hour or less.

#26 According to the U.S. Census Bureau, an all-time record 49 percent of all Americans live in a home where at least one person receives financial assistance from the federal government.  Back in 1983, that number was less than 30 percent.

#27 Right now, more than 100 million Americans are enrolled in at least one welfare program run by the federal government.  And that does not even count Social Security or Medicare.  Overall, there are almost 80 different “means-tested welfare programs” that the federal government is currently running.

#28 When you account for all government transfer payments and all forms of government employment, more than half of all Americans are now at least partially financially dependent on the government.

#29 Barack Obama has been president for less than four years, and during that time the number of Americans “not in the labor force” has increased by nearly 8.5 million.  Something seems really “off” about that number, because during the entire decade of the 1980s the number of Americans “not in the labor force” only rose by about 2.5 million.

#30 Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.

#31 According to USA Today, many Americans have actually seen their water bills triple over the past 12 years.

#32 There are now 20.2 million Americans that spend more than half of their incomes on housing.  That represents a 46 percent increase from 2001.

#33 Right now, approximately 25 million American adults are living with their parents.

#34 As the economy has slowed down, so has the number of marriages.  According to a Pew Research Center analysis, only 51 percent of all Americans that are at least 18 years old are currently married.  Back in 1960, 72 percent of all U.S. adults were married.

#35 At this point, only 24.6 percent of all jobs in the United States are good jobs.

#36 In 1999, 64.1 percent of all Americans were covered by employment-based health insurance.  Today, only 55.1 percent are covered by employment-based health insurance.

#37 Recently it was announced that total student loan debt in the United States has passed the one trillion dollar mark.

#38 If you can believe it, one out of every seven Americans has at least 10 credit cards.

#39 One survey of business executives has ranked California as the worst state in America to do business for 8 years in a row.

#40 In the city of Detroit today, more than 50 percent of all children are living in poverty, and close to 50 percent of all adults are functionally illiterate.

#41 It is being projected that half of all American children will be on food stamps at least once before they turn 18 years of age.

#42 More than three times as many new homes were sold in the United States in 2005 as will be sold in 2012.

#43 If you can believe it, 53 percent of all Americans with a bachelor’s degree under the age of 25 were either unemployed or underemployed last year.

#44 The U.S. economy continues to trade good paying jobs for low paying jobs.  60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.

#45 Our trade deficit with China in 2011 was $295.5 billion.  That was the largest trade deficit that one country has had with another country in the history of the planet.

#46 The United States has lost an average of approximately 50,000 manufacturing jobs a month since China joined the World Trade Organization in 2001.

#47 According to the Economic Policy Institute, America is losing half a million jobs to China every single year.

#48 The U.S. tax code is now more than 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.

#49 According to the IMF, the global elite are holding a total of 18 trillion dollars in offshore banking havens such as the Cayman Islands.

#50 The value of the U.S. dollar has declined by more than 96 percent since the Federal Reserve was first created.

#51 2012 was the third year in a row that the yield for corn has declined in the United States.

#52 Experts are telling us that global food reserves have reached their lowest level in almost 40 years.

#53 One recent survey discovered that 40 percent of all Americans have $500 or less in savings.

#54 If you can believe it, one recent survey found that 28 percent of all Americans do not have a single penny saved for emergencies.

#55 Medical costs related to obesity in the United States are estimated to be approximately $147 billion a year.

#56 Corporate profits as a percentage of GDP are at an all-time high.  Meanwhile, wages as a percentage of GDP are near an all-time low.

#57 Today, the wealthiest 1 percent of all Americans own more wealth than the bottom 95 percent combined.

#58 The wealthiest 400 families in the United States have about as much wealth as the bottom 50 percent of all Americans combined.

#59 The six heirs of Wal-Mart founder Sam Walton have a net worth that is roughly equal to the bottom 30 percent of all Americans combined.

#60 At this point, the poorest 50 percent of all Americans collectively own just 2.5% of all the wealth in the United States.

#61 Nearly 500,000 federal employees now make at least $100,000 a year.

#62 In 2006, only 12 percent of all federal workers made $100,000 or more per year.  Now, approximately 22 percent of all federal workers do.

#63 If you can believe it, there are 77,000 federal workers that make more than the governors of their own states do.

#64 Nearly 15,000 retired federal workers are collecting federal pensions for life worth at least $100,000 annually.  The list includes such names as Newt Gingrich, Bob Dole, Trent Lott, Dick Gephardt and Dick Cheney.

#65 U.S. taxpayers spend more than 20 times as much on the Obamas as British taxpayers spend on the royal family.

#66 Family homelessness in the Washington D.C. region (one of the wealthiest regions in the entire country) has risen 23 percent since the last recession began.

#67 If Bill Gates gave every single penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for about 15 days.

#68 During fiscal year 2012, 62 percent of the federal budget was spent on entitlements.

#69 Back in 1965, only one out of every 50 Americans was on Medicaid.  Today, approximately one out of every 6 Americans is on Medicaid.

#70 It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.

#71 Medicare is also growing by leaps and bounds.  As I wrote about recently, it is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.

#72 Thanks to our foolish politicians (including Obama), Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years.  That comes to approximately $328,404 for each and every household in the United States.

#73 Amazingly, the U.S. national debt is now up to 16.3 trillion dollars.  When Barack Obama first took office the national debt was just 10.6 trillion dollars.

#74 During the first four years of the Obama administration, the U.S. government accumulated about as much debt as it did from the time that George Washington took office to the time that George W. Bush took office.

#75 Today, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was originally created back in 1913.

Please share this article with as many people as you can.  Time is running out, and we need to wake up as many people as possible.

75

Sorry Protesters: Your Jobs Are Being Sent To China And They Aren’t Coming Back

Did you see the huge crowds of protesters that flooded the Michigan Capitol on Tuesday?  They were there to protest two bills there were being considered by the state legislature that would limit the power of unions in the state.  Michigan lawmakers approved the bills and this absolutely infuriated the protesters.  There is a lot of passion on both sides of this debate, but I am afraid that both sides in this debate are missing the bigger picture.  If we keep shipping millions of our jobs to China, there isn’t going to be work for anyone no matter how much power unions have or don’t have.  During the month of October, the U.S. trade deficit increased to 42.2 billion dollars.  Our trade with China accounted for most of that deficit.  Our trade deficit with China in October increased to a new all-time one month record of 29.5 billion dollars.  Nearly 30 billion dollars that could have gone to U.S. businesses and U.S. workers went to China instead.  Since 1975, a total of about 8 trillion dollars that could have gone to U.S. businesses and U.S. workers went to the rest of the world instead.  Shiny new factories are going up all over China, and meanwhile our once great manufacturing cities are degenerating into desolate wastelands.  So what is going to happen when all of the good paying manufacturing jobs are gone?  Are we all going to fight bitterly over whether we should unionize the low paying jobs that remain at places such as Wal-Mart and McDonalds?  Such an approach is not going to bring back prosperity to America.  We desperately need to start building things and start creating real wealth inside this country once again.  We desperately need to stop sending tens of thousands of businesses, millions of jobs and trillions of dollars of our national wealth out of the country.  Unfortunately, I don’t see anyone out there holding protests about our trade deficit.  Nobody really seems to care, so our economy will continue to bleed good jobs and the middle class will continue to be destroyed.

The funny thing is that the workers that are out there protesting these union bills actually voted for the politicians that are killing their jobs.  Both parties are married to the one world economic system and the “free trade” agenda, and Barack Obama has been one of the worst offenders.  He has been pushing for more “free trade agreements” throughout the past four years, and yet union workers continue to support him enthusiastically.

How foolish can they possibly be?

Yeah, let’s merge American workers into a global labor pool with workers in third world countries on the other side of the globe that work in absolutely nightmarish conditions for as little as 45 dollars a month.  That sounds like a great idea, doesn’t it?

Oh, but you don’t want to work for 45 dollars a month?

You don’t even want to work for 450 dollars a month?

Well, then the big corporations that fund politicians like Obama will just take your jobs and send them halfway around the planet.

Do you think that your unions will save your jobs?

Michigan already has the highest rate of union membership in the Midwest.

It also has the highest rate of unemployment in the Midwest.

Over the past couple of decades, thousands of businesses in Michigan have either closed down or moved facilities overseas.

Did the unions prevent any of that?

No.

If union bosses really wanted to do some good, they would be organizing protests against our incredibly foolish trade policies.

But instead, they tell their members to vote for politicians like Obama and then they run out to the stores and fill their carts with huge piles of products that were made in China.

Union workers need to wake up to one fundamental economic fact – in a one world economic system, the big corporations simply do not need you.  They can make their products in lots of other countries where it is legal to pay slave labor wages.

But instead of getting upset about what is really killing their jobs, union workers in Michigan are screaming mad about a couple of new laws that will take some power away from the unions.

That is kind of like being obsessed with a broken fingernail when your leg has just been sawed off and you are gushing blood all over the floor.

Oh, but union workers did put on a good show up in Michigan.  The following is how a Bloomberg article described the protests…

Officials spent days gearing up for crowds brought out by the legislature’s sudden action last week to give initial approval to three anti-dues bills, which exclude police and firefighters. At least one helicopter buzzed overhead today, and mounted police surveyed the protesters. Signs reading “Don’t hurt working families” dotted lawns.

The crowd numbered more than 10,000, according to State Police Inspector Gene Adamczyk, with more buses still arriving. The Capitol was closed when it reached its capacity of 2,000.

The anger surrounding these protests was almost palpable.  One state representative even declared that “there will be blood”.

Meanwhile, many of those same protesters will buy toys for their kids that were made in China with wrapping paper that was made in China and they will put them under a Christmas tree that was made in China.

Merging our economy with the economy of communist China was one of the stupidest economic moves that we could have ever made.  They are systematically taking our wealth, and then we have to go over there and beg them to lend money back to us.

Pretty soon the Chinese economy will dwarf ours.  According to the National Intelligence Council, the GDP of Asia will have surpassed the GDP of North America and the GDP of all of Europe combined by 2030.

But if we had never opened up trade with communist China none of this would have ever happened.

Why won’t American workers get upset about this stuff?

Do you really want your standard of living to decline to the level of a Chinese factory worker?

You can see some photos of what life is like for workers in China’s toy factories right here.  This is what the future holds for American workers unless something is done.

For much more on how our trade policies are absolutely gutting our economy, please see the statistics in this article: “55 Reasons Why You Should Buy Products That Are Made In America This Holiday Season“.

But no, the big unions will never dare oppose Obama.  They love him far too much to do that.

Meanwhile, we continue to bleed good jobs.  Large companies have announced the elimination of more than 100,000 jobs since November 6th, and it looks like 2013 is going to be a very difficult year for American workers.

If you are an American worker, you need to ask yourself why anyone would want to hire you in this kind of economic environment.  You are 10 to 20 times more expensive than workers on the other side of the globe.  In addition, our politicians just keep piling more rules, regulations and taxes on to the backs of the employers in this country.  It is more difficult than ever to make a profit from the labor of an American worker.

Honestly, I understand why most small businesses don’t want to hire anyone in this economic environment.  It just doesn’t make sense.  For much more on this, please see this excellent article by Charles Hugh-Smith.

And there are signs that things are going to get even worse.  For example, the NFIB Small Business Outlook survey dropped like a rock during November.  That is a very bad sign for hiring.

And another ominous sign for the economy was that the latest trade report showed that imports and exports are both declining.  That is usually a signal that a recession is coming.  Exports fell faster than imports did, and that is the reason why the trade deficit grew.  If imports and exports both fall again next month, it will be time to become extremely concerned.  When imports and exports both decline, that is a sign of slowing economic activity.

The United States will always need to trade with other nations, but we need to do it in a way that is balanced and that protects American workers.  Right now there is a one way conveyor belt taking businesses, jobs and money out of this country.  If we don’t do something about our mammoth trade deficit, we will have no chance of reversing the steady decline of the U.S. economy.

Hopefully we can get the American people to wake up and realize this.  Instead, most of the comments at the end of this article will probably be about the pros and cons of unions.  That will be yet another sign that most people still don’t get these issues.

15 Signs That The Economy Is Rapidly Getting Worse As We Head Into 2013

How can the mainstream media claim that the U.S. economy is “improving” when it is painfully obvious to anyone with a brain that the middle class is being absolutely eviscerated?  According to numbers that were just released, the number of Americans on food stamps rose by more than 600,000 in a single month to an all-time record high of 47.7 million.  Youth unemployment in the U.S. is at a post-World War II high and large companies have announced the elimination of more than 100,000 jobs since Barack Obama won the election.  Consumer debt just hit a new record high and the federal government is accumulating debt at a much faster pace than it was at this time last year.  So where is the evidence that the economy is getting better?  The mainstream media says that the decline of the unemployment rate to “7.7 percent” is evidence that things are improving, but I showed how fraudulent that number is yesterday.  The percentage of working age Americans with a job today is exactly where it was back in September 2009 in the midst of the last major economic crisis.  The mainstream media is desperate for any shred of evidence that it can use to make people feel good and show that the Obama administration has our economy on the right track, and so they jump on any number that even looks remotely promising and they ignore mountains of evidence to the contrary.  They don’t seem to care that poverty is absolutely exploding and that the number of Americans on food stamps has risen by nearly 50 percent while Obama has been in the White House.  They don’t seem to care that the U.S. share of global GDP has fallen from 31.8 percent in 2001 to 21.6 percent in 2011.  They don’t seem to care that more good paying jobs are being shipped overseas with each passing day.  They don’t seem to care that formerly great U.S. cities that were once the envy of the entire globe are now crime-infested hellholes.  All they seem to care about is putting out news that makes people feel warm and fuzzy and making sure that Obama looks good.  Unfortunately, the truth is that the U.S. economy is steadily getting worse, and 2013 is not looking very promising at all right now.  Hopefully at some point the mainstream media will take a break from coverage of the royal pregnancy and the latest celebrity scandals to report on the real problems that we are facing right now.

The following are 15 signs that the economy is rapidly getting worse as we head into 2013…

#1 According to numbers that were just released, the number of Americans on food stamps has risen to a new all-time record of 47.71 million.  That is a huge increase of more than 600,000 over the previous reading of 47.10 million.  After about a year of slow growth, it looks like the number of Americans on food stamps is starting to skyrocket once again.  Back in the 1970s, about one out of every 50 Americans was on food stamps.  Today, about one out of every 6.5 Americans is on food stamps.

#2 Youth unemployment in the United States is now at the highest level that we have seen since World War II.

#3 According to Gallup, unemployment in the United States shot up very sharply during the month of November.

#4 It looks like the unemployment numbers are likely to get even worse.  Since the election, dozens of large companies have announced major layoffs.  Overall, large companies have announced the elimination of more than 100,000 jobs since November 6th.

#5 According to the Wall Street Journal, of the 40 biggest publicly traded corporate spenders, half of them plan to reduce capital expenditures over the coming months.

#6 Small business owners all over America are declaring that Obamacare is going to force them to start replacing full-time workers with part-time workers during 2013.

#7 One recent survey discovered that 40 percent of all Americans have $500 or less in savings.

#8 A different recent survey found that 28 percent of all Americans do not have a single penny saved for emergencies.

#9 62 percent of middle class Americans say that they have had to reduce household spending over the past year.

#10 Many Americans are trying to make ends meet for their families by going into more debt.  Consumer borrowing hit another brand new record high in October.  It looks like the American people have not learned from their past mistakes and have decided to roll up consumer debt at a faster pace than ever before.

#11 Median household income in America has fallen for four consecutive years.  Overall, it has declined by over $4000 during that time span.

#12 Wall Street bankers are expecting “the worst bonus season” since 2008.  Not a lot of people are going to shed tears over this one, but this is a sign that there is trouble in the financial world.

#13 Food banks all over America are reporting that more needy families than ever before are showing up to get food.

#14 As I wrote about yesterday, the federal government has run a deficit of $292 billion dollars during the first two months of fiscal 2013.  That figure is $57 billion higher than it was during the same period last year.  Government debt continues to soar wildly out of control and at some point all of that debt is absolutely going to crush us.

#15 I have written previously about how the once great city of Detroit has become a symbol of the downfall of the U.S. economy.  Well, now the state of Michigan is laying the groundwork for a “managed bankruptcy” of Detroit.  Sadly, many other large U.S. cities will likely follow suit over the next couple of years.

We should truly mourn for what is happening to Detroit.  At one time, it was one of the most beautiful cities on earth.  But now it is on the cutting edge of America’s economic decline.  You can see some amazing before and after pictures of an abandoned Detroit school right here.  Sadly, what is happening to Detroit will soon be happening to the rest of the country.

A similar thing is happening over in Europe.  Greece is on the cutting edge of Europe’s economic decline, and people over there are becoming very desperate.  The following is an excerpt from a Financial Post article about how the Greek middle class is turning to crime as the depression in that nation gets even worse…

In the once stable neighborhood of Kordelio, the unemployed and drug users gather in the parks, scaring away mothers and children, and crimes like chain snatching are on the rise. Many long-time residents have left, moving abroad or to their families’ villages, leaving behind empty houses, said Evangelia Rombou, 58, who has lived in Kordelio for 22 years.

But it is not just Greece that is grappling with these kinds of issues.  Now even countries that had been thought to be “stable” are experiencing significant problems.  For example, a massive crime wave has broken out in France.  The crime wave in France is being blamed on “austerity”, but the government of France still spends far more than it brings in.

So how bad would things get in France if the French government actually did go to a balanced budget?

And how bad would things get in the United States if the federal government was not stealing more than 100 million dollars an hour from our children and our grandchildren?

Even in the midst of our debt-fueled prosperity we are starting to see glimpses of how desperate people will become when our country is someday forced to live within its means.  For example, the following is from a report about an incident that happened in Columbus, Ohio the other day…

Columbus Police sprayed Mace on several people in a crowd that had gathered to sign up for a list to get subsidized housing at a northwest Columbus apartment complex.

Police said the crowd started to gather Friday night for the Saturday morning event at The Heritage apartment complex on Gatewood Road near Sunbury Road in northeast Columbus.

Authorities said that its highest number, the crowd reached 2,000 people.

Our entire economy is a giant mirage.  Our prosperity has been purchased by stealing from the future.  A few people have been warning that we have completely destroyed our future in the process, but both major political parties just continue to do it and the mainstream media just continues to cheer them on.

At some point this con game will end and this economic mirage will disappear.  When that happens, millions of people all over this country are going to become very angry and very desperate.

I hope that you have a plan for what you will do when that happens.

UNSUSTAINABLE

When it comes to explaining the problems with our economy, one of the hardest things to do is to get people to understand that we are living in an economic fantasy world that is completely and totally unsustainable.  As a nation we consume far more than we produce, we spend far more than we bring in, our debt is growing much faster than our GDP is, our entitlement programs are growing at an exponential rate, our retirement system is a Ponzi scheme and the Federal Reserve is printing money as if there is no tomorrow in a desperate attempt to paper over all of our problems.  But we have all grown so accustomed to the debt-fueled prosperity that we have been enjoying for so many decades that it actually feels “real” to most of us.  Unfortunately, history has shown us that it is simply not possible to grow your debt faster than your economy indefinitely.  At some point your consumption will drop back to a level more equal to your production.    Sometimes that adjustment can be gradual, but other times it can be extremely painful.  In our case, we have been living way above our means for so long that it would take a major economic miracle just to keep our adjustment to an “exceedingly painful” level.  We are living in the largest debt-fueled prosperity bubble in the history of the world, and our unsustainable economy is going to crash and burn at some point.  Hopefully it will be later rather than sooner, but a crash is most definitely coming.

The following are some of the reasons why the bubble economy that we are living in right now is unsustainable….

The Trade Deficit

Most Americans do not really understand what a “trade deficit” is, but it is at the very core of our economic problems.

Basically, we buy far more stuff from the rest of the world than they buy from us.  We send them huge piles of our money, and they send us oil that we burn in our cars and cheap plastic products that we end up throwing away.  We keep doing this month after month after month, and this is systematically making us poorer as a nation.

In 2012, it is being projected that our trade deficit will fall somewhere between 500 billion and 600 billion dollars.

At this point, the United States has a trade imbalance that is more than 7 times larger than any other nation on earth has.

Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the world since 1975.

Instead of going out of the country, those 8 trillion dollars could have gone to U.S. businesses and U.S. workers.  In turn, taxes would have been paid on those 8 trillion dollars and our debt problems would not be nearly as dramatic today.

But we didn’t do that.

We chose to allow tens of thousands of businesses, millions of jobs and trillions of dollars of our national wealth to leave the country.

Stupid move, eh?

But both political parties have been endlessly pushing the “free trade” agenda.  They have both promised that it would bring us tremendous prosperity.

Well, just take a look at our formerly great manufacturing cities today.  Do they look prosperous to you?

It turns out that Ross Perot was right when he warned about the “giant sucking sound” that would happen if NAFTA was implemented.

When NAFTA was pushed through Congress in 1993, the United States had a trade surplus with Mexico of 1.6 billion dollars.  By 2010, we had a trade deficit with Mexico of 61.6 billion dollars.

That didn’t work out so well, did it?

What about opening up trade with China?

Back in 1985, our trade deficit with China was approximately 6 million dollars (million with a little “m”) for the entire year.

In 2011, our trade deficit with China was 295.4 billion dollars.  That was the largest trade deficit that one nation has had with another nation in the history of the world.

Our trade with China is tremendously unbalanced.  Today, U.S. consumers spend approximately 4 dollars on goods and services from China for every one dollar that Chinese consumers spend on goods and services from the United States.

This is a huge reason why shiny new factories are going up all over China, and our blue collar cities are turning into rotting war zones filled with unemployed people.

If you can believe it, the United States has actually lost more than 56,000 manufacturing facilities since 2001.

Until we fix the trade deficit we are going to continue bleeding factories, jobs and national wealth at an astounding pace.

The National Debt

It is being projected that U.S. GDP will grow at a rate of about 2.2 percent this year.

The problem is that our federal budget deficit will be somewhere around 7 percent of GDP this year.

With each passing day we are losing ground.  No other nation on earth has been able to run up debt like this indefinitely, and neither will we.

Does this chart look like a healthy situation to you?….

Sadly, all of this government debt is just about the only thing holding up our economy at this point.  Since Barack Obama has been in the White House, the U.S. national debt has increased by about 5.5 trillion dollars.  Of course the Obama administration has spent a lot of that money on incredibly stupid stuff, but it still gets into the pockets of average Americans that in turn spend it on food, gas, mortgage payments, etc.

If we could go back in time and suck that 5.5 trillion dollars of extra spending out of the economy we would be in a horrible economic depression right now.

But that does not mean that borrowing and spending all of that money was the right thing to do.  We have stolen it from our children and our grandchildren and we are going to stick them with the bill.

That is highly immoral and it is a national disgrace.

Yet we continue to do it because we can’t help ourselves.  We are ruining the future of this nation in order to make the present more pleasant for ourselves.

As I noted yesterday, the U.S. national debt jumped more on the very first day of fiscal year 2013 than it did from 1776 to 1941 combined.

We are completely addicted to debt and we can’t stop.  We know that we are destroying the future of the United States but we have absolutely no self-discipline.

By the end of Barack Obama’s first term, the U.S. government will have accumulated more debt during those four years than it did from the time that George Washington took office to the time that George W. Bush took office.

But most Americans seem fine with that.

Most Americans don’t even really know why this is happening, and most don’t really seem too concerned about finding out.  They just want the good times to continue to roll.

Sadly, the truth is that our financial system is designed to create government debt.  It is one of the primary purposes of the Federal Reserve system.

At this point, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was first created.

So I guess you could say that the Federal Reserve is doing a good job of what it was designed to do.

And until we change the system things are going to continue to get worse until the entire system collapses.

Boston University economist Laurence Kotlikoff is warning that we are basically facing financial armageddon if something is not done.  Kotlikoff speaks of a “fiscal gap” which he defines as “the present value difference between projected future spending and revenue”.  His calculations have led him to the conclusion that the United States is facing a fiscal gap of 222 trillion dollars in the years ahead.

Where in the world are we going to get an extra 222 trillion dollars?

Entitlements

Every society needs a safety net, but we are rapidly getting to the point where there are going to be more Americans on the safety net than there are Americans supporting it.

Back in 1983, less than 30 percent of all Americans lived in a home where at least one person received financial assistance from the federal government.

Today, that number is up to an all-time record of 49 percent.

Many people don’t believe me when I tell them that more than 100 million Americans are enrolled in at least one welfare program run by the federal government right now, and that does not even count Social Security or Medicare.

But it is actually true.

Overall, there are nearly 80 different “means-tested welfare programs” that the federal government is currently running.

But of course the biggest financial burdens are Medicaid, Medicare and Social Security.  All three are on course to become completely and totally unsustainable.

For example, the number of Americans on Medicaid soared from 34 million in 2000 to 54 million in 2011, and it is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.

Ouch.

Well, what about Medicare?

Sadly, Medicare is even more frightening.

As I wrote recently, it is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.

How in the world can we afford that?

At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years.  That comes to approximately $328,404 for each and every household in the United States.

Are you ready to contribute your share?

Social Security is in really bad shape as well.

At the moment, approximately 56 million Americans are collecting Social Security benefits.

By 2035, that number is projected to soar to a whopping 91 million.

Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.

Where are we going to get that money?

Total Debt

Of course the national debt is not out only debt problem.  All over the country there are state and local governments that are on the verge of insolvency.  Corporations and financial institutions are leveraged like crazy.  And of course consumers have absolutely gorged on debt over the past several decades.

As a result, we are drowning in debt from sea to shining sea.

The good news is that our GDP is more than 12 times larger than it was 40 years ago.

The bad news is that the total amount of debt in our country is more than 30 times larger than it was 40 years ago….

Obviously this is something that cannot go on forever.

We simply cannot keep accumulating debt much faster than our economy is growing.

Nobody knows exactly when the “adjustment” is coming, but it most definitely will arrive at some point.

Money Printing

The Federal Reserve has attempted to monetize many of our economic problems by printing gigantic mountains of money in recent years.

The Federal Reserve is at the very heart of our economic problems, but most Americans don’t realize this.  It was the Federal Reserve that created the conditions for the housing bubble, and it was the Federal Reserve that badly mismanaged the response when that bubble burst.  The Federal Reserve decides how much money will be printed and what our interest rates will be.  The Federal Reserve lends out trillions of dollars to the banks that they like, and other banks they let die.  The Federal Reserve picks winners and losers in our economy, and most of the time that means good things for the big Wall Street banks and bad things for the rest of us.

In a desperate attempt to keep our unsustainable financial system from collapsing, the Federal Reserve has decided to start printing unprecedented amounts of money.  Just look at what this has done to the monetary base….

And QE3 really hasn’t even started to kick in yet.

So how bad will that chart look after QE3 has been adding another 40 billion dollars a month to the financial system for a while?

You know, the Weimar Republic was absolutely convinced that they were doing the right thing by printing lots of money too.

But in the end that didn’t work out very well for them at all….

So should we really be celebrating the fact that the Federal Reserve is going down the same path that the Weimar Republic did?

Demonocracy has released a great new graphic that does a wonderful job of illustrating just how huge the amounts of money involved in QE3 are going to be.  If you have not seen it yet, you can view the graphic right here.

The rest of the world is watching the games that we are playing with our currency.  Right now we think that we are getting away with it, but what we are doing is not sustainable.  At some point the rest of the world will totally lose confidence in the U.S. dollar, and when that happens the U.S. dollar could easily lose its status as the primary reserve currency of the world.

If that were to happen the coming shift in our standard of living would happen much more rapidly.

Please share this article with as many people as you can.  We need to wake people up and get them to understand how incredibly vulnerable our financial system really is.  We are on a path that is unsustainable any way that you want to look at it, and if something dramatic is not done our economy is going to experience an unprecedented collapse.

So what happens if nothing is done and everything crashes all around us?

Well, I hope that you are prepared because it isn’t going to be pretty.

Why Does Our Society Look Down On Unemployed Men So Much?

If you are unemployed for an extended period of time, people are going to look at you differently.  Unfortunately, this is especially true if you are a man.  In our society, men are primarily defined by “what they do”.  If you have been unemployed for a long period of time, that can make social interactions even more awkward than normal.  Most people will instantly become more uncomfortable around you when they find out that you are unemployed.  Many will look at you with pity, and others will actually look at you with disdain.  Women will not want to date you, and if you are in a relationship unemployment will put a tremendous amount of strain on it.  Once you “don’t have a job”, you will not get the same level of respect from former co-workers, friends, members of your own family and possibly even your own wife.  So why does our society look down on unemployed men so much?  Well, it is generally expected that men are supposed to be the “breadwinners” for their families.  If a woman stays home with the kids nobody has any problems with that, but if men do the same thing it tends to raise eyebrows.  But there is a big problem.  Our economy is not producing enough jobs for everyone.  In fact, there are millions upon millions more workers than there are jobs.  It would be great if this was just a temporary situation, but as I have written about previously, there will never be enough jobs in America ever again.  So there will continually be millions upon millions of men that are looked down upon by society because they can’t get jobs, and as a result we are going to have millions upon millions of men that are constantly battling against soul-crushing despair.

It can be really hard to “feel like a man” when you aren’t making any money.

And most women simply are not interested in becoming romantically involved with an unemployed man.  Just check out what one recent survey found….

Of the 925 single women surveyed, 75 percent said they’d have a problem with dating someone without a job. Only 4 percent of respondents asked whether they would go out with an unemployed man answered “of course.”

“Not having a job will definitely make it harder for men to date someone they don’t already know,” Irene LaCota, a spokesperson for It’s Just Lunch, said in a press release. “This is the rare area, compared to other topics we’ve done surveys on, where women’s old-fashioned beliefs about sex roles seem to apply.”

Those are some pretty overwhelming numbers.

So is it the same way when the roles are reversed?

Not even close.

When men were asked the same question, the difference was absolutely shocking….

On the other hand, the prospect of dating an unemployed woman was not a problem for nearly two-thirds of men. In fact, 19 percent of men said they had no reservations and 46 percent of men said they were positive they would date an unemployed woman.

Admittedly, men are often thinking about other things when they are evaluating whether they want to date a women or not.  Yes, there are some men these days that are concerned about how much money a woman makes, but the truth is that men tend to be much less concerned about income levels than women are.

In fact, a UK study that was released last year discovered that British women are even more concerned about the education and income of a potential mate than they were back in the 1940s.

So if you are unemployed you are probably not going to find much success in the romance department either.

If you are married, being unemployed is likely to put a huge strain on your marriage.  The following is a short excerpt from a recent Business Insider article entitled “TRUE CONFESSION: I’m Sick Of My Unemployed Husband“….

I can’t even remember when my husband stopped working.

And frankly, I don’t have time to think about it, between my full-time job and my fledgling business, volunteering at an after-school program to help teenagers prepare for the professional world and mothering two children.

But when I do think about it–when I think about all the times I come home to see evidence of his entire day’s activities cluttering the coffee table, or when I have to take our shared car to work and strand him at home because he doesn’t feel like getting up to drive me–I’m angry.

If a husband is unemployed for an extended period of time, there is a very good chance that the wife is going to start feeling very resentful.

If things get bad enough, many women will pull the plug on their marriages and will get rid of their “unproductive” husbands.

Last year, Time Magazine reported on a study that indicated that unemployed men were significantly more likely to get divorced than employed men were.

My goal in writing this is not to “bash women”.  I am just pointing out how hard things are for unemployed men in our society.  Many wives (and their extended families) simply do not understand that our economy has fundamentally changed.  In the old days just about any hard working man that wanted a job could go out and get one.  That is most definitely NOT the case today.

Hopefully we can get more women to understand this.  I know that it can be hard to be patient when your husband is unemployed for month after month after month.

But at a time when husbands need their support the most, many wives withdraw emotionally and become very angry.

For example, how many women have you ever heard declare how proud they are of their unemployed husbands?

Of course there are definitely situations where these roles are reversed and employed husbands are badgering their unemployed wives about getting a job, but in general our society tends to have a greater degree of tolerance for unemployed women than it does for unemployed men.

Sadly, most people simply do not understand how dramatically things have changed in our economy.

The following chart shows the stunning decline in the percentage of working age men with a job over the past 60 years….

Back in the 1950s, there were times when nearly 85 percent of all working age men had jobs.

We will never get back to anything close to that ever again.

Prior to the last recession, about 70 percent of all working age men were employed.

Since the end of the recession, that number has not gotten back to 65 percent at any point.

That means somewhere around 5 percent of all working age American men have been displaced from the workforce permanently.

The mainstream media would have us believe that we are experiencing an “economic recovery” but that is a massive lie.  The real unemployment numbers are much worse than we have been told.

If you take a look at all working age Americans (men and women), there are actually more than 100 million of them that do not have jobs right now.

I know that statistic can be hard to believe.  I had a hard time believing it at first.  But it is actually true.

Meanwhile, the incomes of those who are working continue to fall.  According to the U.S. Census Bureau, median household income in the United States has fallen for four years in a row.

But this is not a trend that just started recently.  According to one study, between 1969 and 2009 the median wages earned by American men between the ages of 30 and 50 dropped by 27 percent after you account for inflation.

We are in the midst of a long-term economic decline and it is time for all of us to admit how bad things have really gotten.

So what are all of the men who are not working doing these days?

Well, there are some that have chosen to stay at home with the kids.  In a previous article, I discussed how the number of “stay at home dads” has doubled over the past decade.

But the overall percentage of “Mr. Moms” is still very, very low according to Fox News….

There were only about 81,000 Mr. Moms in 2001, or about 1.6 percent of all stay-at-home parents. By last year, the number had climbed to 176,000, or 3.4 percent of stay-at-home parents, according to U.S. Census data.

The vast majority of working age men still want to work outside of the home and earn a living for their families.

Unfortunately, most families need more than one income to make it these days.  In fact, in many cases both parents are working multiple jobs in an attempt to make ends meet.

Meanwhile, the number of good jobs continues to decline and the middle class in America continues to shrink.

This is hitting our young people that are just starting out particularly hard.  For example, during 2011 53 percent of all Americans with a bachelor’s degree under the age of 25 were either unemployed or underemployed.

And as I have written about previously, this is resulting in huge numbers of our young people moving back home with Mom and Dad.

This is particularly true when it comes to young men.  According to CNN, American men in the 25 to 34 age bracket are nearly twice as likely to live with their parents as women the same age are….

The number of adult children who live with their parents, especially young males, has soared since the economy started heading south. Among males age 25 to 34, 19% live with their parents today, a 5 percentage point increase from 2005, according to Census data released Thursday. Meanwhile, 10% of women in that age group live at home, up from 8% six years ago.

How are our young men going to be able to get married and start families if they can’t find jobs and they are living in our basements?

Sadly, things are really hard for everyone right now.  Since June 2009, we have supposedly been in “the Obama recovery”, but median household income in America has fallen during that time period by $3040.

People keep waiting for things to “get better”, but it just isn’t happening.  This was beautifully illustrated the other night during a Saturday Night Live skit that had “Barack Obama” speaking in front of a rally of unemployed and underemployed workers.  You can find video of that skit right here.

There are millions upon millions of men (and women) all over America that are ready and willing to go back to work.

Sadly, there will never be enough jobs for all of them ever again, and that is not going to change no matter who wins the election.

In fact, when the next wave of the economic collapse hits the United States it is likely that unemployment is going to get a whole lot worse.

What will our society look like when that happens?

Quantitative Easing Did Not Work For The Weimar Republic Either

Did printing vast quantities of money work for the Weimar Republic?  Nope.  And it won’t work for us either.  If printing money was the secret to economic success, we could just print up a trillion dollars for every American and be done with it.  The truth is that making everyone in America a trillionaire would not mean that we would all suddenly be wealthy.  There would be the same amount of “real wealth” in our economy as before.  But what it would do is render our currency meaningless and totally destroy faith in our financial system.  Sadly, we have not learned the lessons that history has tried to teach us.  Back in April 1919, it took 12 German marks to get 1 U.S. dollar.  By December 1923, it took approximately 4 trillion German marks to get 1 U.S. dollar.  So was the Weimar Republic better off after all of the “quantitative easing” that they did or worse off?  Of course they were worse off.  They destroyed their currency and wrecked all confidence in their financial system.  There was an old joke that if you left a wheelbarrow full of money sitting around in the Weimar Republic that thieves would take the wheelbarrow and they would leave the money behind.  Will things eventually get that bad in the United States someday?

Of course we are not going to see hyperinflation in the U.S. this week or this month.

But don’t think that it will never happen.

The people of Germany never thought that it would happen to them, but it did.

The following is an excerpt from a Wikipedia article about the Weimar Republic.  Take note of the similarities between what the Weimar Republic experienced and what we are going through today….

The cause of the immense acceleration of prices that occurred during the German hyperinflation of 1922–23 seemed unclear and unpredictable to those who lived through it, but in retrospect was relatively simple. The Treaty of Versailles imposed a huge debt on Germany that could be paid only in gold or foreign currency. With its gold depleted, the German government attempted to buy foreign currency with German currency, but this caused the German Mark to fall rapidly in value, which greatly increased the number of Marks needed to buy more foreign currency. This caused German prices of goods to rise rapidly which increase the cost of operating the German government which could not be financed by raising taxes. The resulting budget deficit increased rapidly and was financed by the central bank creating more money. When the German people realized that their money was rapidly losing value, they tried to spend it quickly. This increase in monetary velocity caused still more rapid increase in prices which created a vicious cycle. This placed the government and banks between two unacceptable alternatives: if they stopped the inflation this would cause immediate bankruptcies, unemployment, strikes, hunger, violence, collapse of civil order, insurrection, and revolution. If they continued the inflation they would default on their foreign debt. The attempts to avoid both unemployment and insolvency ultimately failed when Germany had both.

When the Weimar Republic first started rapidly printing money everything seemed fine at first.  Economic activity was buzzing and unemployment was very low.

But as the following chart shows, when hyperinflation kicks in, it can happen very quickly.  By late 1922, the effects of all of the money printing were really starting to hit the German economy….

Once you start printing money it is really, really hard to stop.

By late 1922, inflation was officially out of control.  An article in The Economist described what happened next….

Prices roared up. So did unemployment, modest as 1923 began. As October ended, 19% of metal-workers were officially out of work, and half of those left were on short time. Feeble attempts had been made to stabilise prices. Some German states had issued their own would-be stable currency: Baden’s was secured on the revenue of state forests, Hanover’s convertible into a given quantity of rye. The central authorities issued what became known as “gold loan” notes, payable in 1935. Then, on November 15th, came the Rentenmark, worth 1,000 billion paper marks, or just under 24 American cents, like the gold mark of 1914.

Hyperinflation hurts the poor, the elderly and those on fixed incomes the worst.  The following is an excerpt from a work by Adam Fergusson….

The rentier classes who depended on savings or pensions, and anyone on a fixed income, were soon in penury, their possessions sold. Barter often took over from purchase. By law rents could not be raised, which allowed employers to pay low wages and impoverished landlords in a country where renting was the norm. The professional classes — lawyers, doctors, scientists, professors — found little demand for their services. In due course, the trade unions, no longer able to strike for higher wages (often uncertain what to ask for, so fast became the mark’s fall from day to day), went to the wall, too.

Workers regularly got wage increases during this time, but they never seemed to keep up with the horrible inflation that was raging all around them.  So they steadily became poorer even though the amount of money they were bringing home was steadily increasing.

People started to lose all faith in the currency and in the financial system.  This had an absolutely devastating effect on the German population.  American author Pearl Buck was living in Germany at the time and the following is what she wrote about what she saw….

“The cities were still there, the houses not yet bombed and in ruins, but the victims were millions of people. They had lost their fortunes, their savings; they were dazed and inflation-shocked and did not understand how it had happened to them and who the foe was who had defeated them. Yet they had lost their self-assurance, their feeling that they themselves could be the masters of their own lives if only they worked hard enough; and lost, too, were the old values of morals, of ethics, of decency.”

Of course not everyone in Germany was opposed to the rampant inflation that was happening.  There were some business people that became very wealthy during this time.  The hyperinflation rendered their past debts meaningless, and by investing paper money (that would soon be worthless) into assets that would greatly appreciate thanks to inflation, many of them made out like bandits.

The key was to take your paper money and spend it on something that would hold value (or even increase in value) as rapidly as possible.

The introduction of the Rentenmark brought an end to hyperinflation, but the damage to the stability of the German economy had been done.  The German economy went through several wild swings which ultimately resulted in the rise of the Nazis.  The following description of this time period is from an article by Alex Kurtagic….

The post-hyperinflationary credit crunch was, not surprisingly followed by a credit boom: starved of money and basic necessities for so long (do not forget the hyperinflation had come directly after defeat in The Great War), many funded lavish lifestyles through borrowing during the second half of the 1920s. We know how that ended, of course: in The Great Depression, which eventually saw the end of the Weimar Republic and the beginning of the National Socialist era.

By the end of the decade unemployment really started to take hold in Germany as the following statistics reveal….

September 1928 – 650,000 unemployed

September 1929 – 1,320,000 unemployed

September 1930 – 3,000,000 unemployed

September 1931 – 4,350,000 unemployed

September 1932 – 5,102,000 unemployed

January 1933 – 6,100,000 unemployed

By the end of 1932, over 30 percent of all German workers were unemployed.  This created an environment where people were hungry for “change”.

On January 30th, 1933 Hitler was sworn in as chancellor, and the rest is history.

So where will all of this money printing take America?

As I wrote about in a previous article, the amount of excess reserves that banks have stashed with the Federal Reserve has risen from about 9 billion dollars on September 10th, 2008 to about 1.5 trillion dollars today….

What is going to happen to inflation when all of those excess reserves start flowing out into the regular economy?

It won’t be pretty.

Just consider the ominous words that Philadelphia Fed President Charles Plosser used earlier this week….

“Inflation is going to occur when excess reserves of this huge balance sheet begin to flow outside into the real economy.  I can’t tell you when that’s going to happen.”

“When that does begin if we don’t engage in a fairly aggressive and effective policy of preventing that from happening, there’s no question in my mind that that will lead to lots of inflation.”

Oh great.

And so what is Bernanke doing?

He is printing up lots more money.

But isn’t this supposed to help the economy?

I wouldn’t count on it.

According to USA Today, the following is what Plosser says about the effect that QE3 is likely to have on our economy….

“We are unlikely to see much benefit to growth or to employment from further asset purchases.”

But we will get more inflation, so our monthly budgets will not go as far as they did before.

The other day I was going to the supermarket, and my wife told me that she wanted some croissants.  When I got to the bakery section I discovered that it was $4.49 for just four croissants.

If it had just been for me, I would have never gotten them.  I am the kind of shopper that doesn’t even want to look at something unless there is a sale tag on it.

But I did get the croissants for my wife.

Unfortunately, thanks to Federal Reserve Chairman Ben Bernanke soon none of us may be able to afford to buy croissants.

I still remember the days when I could fill up my entire shopping cart for 20 bucks.

And it was not that long ago – I am talking about the late 90s.

But paying more for food is not the greatest danger we are facing.  Bernanke is destroying the credibility of our currency and he is destroying faith in our financial system.

Bernanke may believe that he is preventing the next great collapse from happening, but the truth is that what he is doing is going to make the eventual collapse far worse.

Better get your wheelbarrows ready.

Things Are Getting Worse: Median Household Income Has Fallen 4 Years In A Row

New numbers that have just been released show that things are getting worse for American families.  According to the U.S. Census Bureau, median household income declined to $50,054 in 2011.  That is a 1.5 percent decline from the previous year, and median household income has now fallen for 4 years in a row.  In fact, after adjusting for inflation median household income has not been this low since 1995.  These new numbers once again confirm what so many of us have been talking about for so long – American families are steadily getting poorer.  Incomes are going down and the cost of living just keeps going up.  This dynamic is squeezing more Americans out of the middle class every single month.  Others just keep going into more debt in an attempt to maintain their previous lifestyles.  As Americans, we really don’t like to hear that things are getting worse and that we are in decline, but unfortunately that is exactly what is happening.  Our economy does not produce nearly enough jobs for everyone anymore, the proportion of low wage jobs in our economy continues to grow, and the middle class is shrinking at an alarming rate.  Our politicians can deliver speeches about how great we all are until the cows come home, but it isn’t going to change the reality of our situation.  If we want different results we have got to start taking different actions.

When you take the median household income of $50,054 and divide it up over 12 months, it comes to about $4000 a month.

About half of all American households are making more than that and about half of all American households are making less than that.

So can an average family of four people make it on just $4000 a month?

Well, first of all you have got to take out taxes.  After accounting for all forms of taxation you will be lucky if you have $3000 remaining.

With that $3000, you have to pay for all of the following.

*Housing

*Power

*Water

*Food

*Phone

*Internet

*At Least One Vehicle

*Gasoline

*Vehicle Repairs

*Car Insurance

*Health Insurance

*Dental Bills

*Home Or Rental Insurance

*Life Insurance

*Student Loan Debt Payments

*Credit Card Payments

*Furniture

*Clothing

*Pets

*Entertainment (although it is hard to imagine any money will be left for that)

Have I left anything out?

The truth is that $3000 does not go as far as it used to.

No wonder American families are feeling so stretched financially these days.

Most families can’t even afford to think about retirement or investments because most of them are just trying to figure out a way to survive from month to month.

Unfortunately, economic conditions for middle income Americans continue to deteriorate.  Being in the middle class in America is like playing a perverse game of musical chairs.  More chairs are constantly being pulled out of the game and the middle class just continues to shrivel up.

The following are some more statistics that show that things are getting worse….

-In 1999, 64.1 percent of all Americans were covered by employment-based health insurance.  Today, only 55.1 percent are covered by employment-based health insurance.

-Health insurance premiums rose faster than the overall rate of inflation in 2011 and that is happening once again in 2012.  In fact, it is been happening for a very long time.

-In the United States today, there are close to 10 million households that do not have a single bank account.  That number has increased by about a million since 2009.

-Back in 1962, the wealthiest one percent of all Americans had 125 times the net worth of the median household.  Today, the wealthiest one percent of all Americans has 288 times the net worth of the median household.

-Back in 2007, 19.2 percent of all American families had a net worth of zero or less than zero.  By 2010, that figure had soared to 32.5 percent.

-According to a survey conducted by the Pew Research Center, 32 percent of all Americans now identify themselves as “lower class”.  In 2008, that figure was only at 25 percent.

-As I have written about previously, 61 percent of all Americans were “middle income” back in 1971 according to the Pew Research Center.  Today, only 51 percent of all Americans are “middle income”.

-62 percent of all middle class Americans say that they have had to reduce household spending over the past year.

-Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.

-There are now 20.2 million Americans that spend more than half of their incomes on housing.  That represents a 46 percent increase from 2001.

-According to the Federal Reserve, the median net worth of American families dropped “from $126,400 in 2007 to $77,300 in 2010“.

-Sadly, 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.

-At this point, less than 25 percent of all jobs in the United States are “good jobs”, and that number continues to shrink.

-The percentage of working age Americans that are employed is smaller now than it was two years ago.

-The number of Americans that are financially dependent on the government is sitting at an all-time record, and it just keeps going up.

-If the labor force participation rate was the same today as it was back when Barack Obama first took office, the unemployment rate in the United States would be 11.2 percent.

That last statistic deserves some special attention.

If the exact same percentage of Americans were considered to be “in the work force” today as when Barack Obama became president, the unemployment rate in this country would be well over 11 percent.

But the federal government has pretended that millions upon millions of Americans have “left the work force” over the past few years and that allows them to tell the fib that the unemployment rate has actually declined to 8.1 percent.

Of course we all know that is a bunch of nonsense.  About the same percentage of Americans want a job today as was the case back in 2008.

But 8.1 percent looks way better than 11.2 percent does.

What makes all of this even more distressing is that this is the recovery.

Things are not going to be getting much better than this.  We are rapidly approaching the next wave of the economic collapse and all of the numbers posted above are going to be getting a lot worse.

So even though things may be tight for your family right now, you should enjoy these times while you still have them.

Someday we will look back on these years as “the good old days”.

Are You Better Off? 40 Statistics That Will Absolutely Shock You

Are you better off today than you were four years ago?  This is a question that comes up nearly every election.  This year the Romney campaign has even created a Twitter hashtag for it: #AreYouBetterOff.  The Democrats are making lots of speeches claiming that we are better off, and the Republicans are making lots of speeches claiming that we are not.  So are most Americans actually better off than they were four years ago?  Of course not.  One recent poll found that only 20 percent of Americans believe that they are better off financially than they were four years ago.  But the same thing was true four years ago as well.  Our economy has been in decline and the middle class has been shrinking for a very long time.  The Democrats want to put all of the blame on the Republicans for this, and the Republicans want to put all of the blame on the Democrats for this.  A recent CNN headline defiantly declared the following: “Decline of middle class not Obama’s fault“, and this is the kind of thing we are going to hear day after day until the election in November.  But obviously something has gone fundamentally wrong with our economy.  So who should we blame?

Sadly, you hear very little on the mainstream news networks or the talk radio shows about the institution that has the most power over our economy.  The Federal Reserve has far more power over our financial system than anyone else does, but the media and both political parties tell us that the Federal Reserve is “above politics” and that their “independence” must never be questioned.

Unfortunately, most Americans have gone along with that.

But the truth is that the debt-based financial system that the Federal Reserve is at the core of is absolutely central to our economic problems.  If you do not understand this, please see this article: “10 Things That Every American Should Know About The Federal Reserve“.

The Federal Reserve has done more to mess up our economy than anyone else has.

So shouldn’t they be held accountable?

That is a very good question.

Have you ever wondered why financial markets move so dramatically whenever Federal Reserve Chairman Ben Bernanke gives a speech?

The same thing does not happen when Barack Obama gives a speech.

That is because the financial markets know who holds the real power in our financial system.

But during this election season the American people are told to put all of their attention on the “red team” and the “blue team”.  We are told that the two major political parties are philosophical opposites and that they want to take the United States is two completely different directions.

The “true believers” on the blue team are completely and totally convinced that Barack Obama will be able to rescue the economy and save America.

The “true believers” on the red team are completely and totally convinced that Mitt Romney will be able to rescue the economy and save America.

Once upon a time I was one of those political activists.  I was fully convinced that America could be turned around if we could just get enough Republicans into office.

But then I noticed that nothing really seemed to change no matter who was in power.  I became disillusioned as I realized that Republicans were doing things pretty much the exact same way that Democrats were doing them when they got into power.

Yes, there are some minor differences between the two parties on taxes and regulations.

If we elect one guy over the other our economy might decline at a slightly different pace.

But in the end both political parties are taking us to the exact same place.

Down the toilet.

I wish that wasn’t true.

But we need to be honest with ourselves….

-Both parties fully support the Federal Reserve.

-Both parties supported the nomination of Ben Bernanke to a second term as the head of the Federal Reserve.

-Both parties endlessly push the job-killing “free trade” agenda of the global elite.

-Both parties see nothing wrong with running absolutely enormous trade deficits with the rest of the world.

-Both parties supported TARP.

-Both parties supported the “economic stimulus” packages.

-Both parties supported the auto industry bailouts.

-Both parties have run up massive amounts of federal debt when in power.

-Both parties have greatly expanded the size of the federal government when in power.

-Both parties are full of control freaks and both parties have added more layers of ridiculous regulations to our already overburdened society when in power.

-Neither party supports getting rid of the income tax or the IRS.

-Neither party has any intention of doing anything to prevent the coming derivatives crisis that could bring down the entire global financial system.

-Both parties are absolutely showered with cash from the big Wall Street banks.

-Both parties think that the TSA is doing a great job.

-Both parties supported the NDAA and the renewal of the Patriot Act.

-Both parties have greatly expanded the unconstitutional surveillance of American citizens by government agencies.

-Both parties are extremely soft on illegal immigration.

-Both parties have treated military veterans horribly.

-Both parties are absolutely packed with corrupt politicians that are living the high life at your expense.

-Neither party plans to balance the federal budget in 2013 if their candidate wins the election.

-Neither party has a plan that will fix our deeply broken health care system.

-Neither party has any plans to shut down the Federal Reserve.  In fact, both parties see absolutely nothing wrong with our current system.

Of course this list could go on indefinitely, but hopefully you get the point.

But I can understand those that are deeply frustrated with Barack Obama and that desperately want to avoid another four years of his policies.

I also believe that Barack Obama has been the worst president in U.S. history and that he and his entire cabinet should immediately resign in disgrace.

However, the Republican party foolishly chose to nominate the Republican candidate that was most like Barack Obama to run against him.

That was an enormous mistake.

No matter what the talk radio shows are telling you, the truth is that this country will continue on pretty much the same path no matter who wins the election.

I know that statement is going to make a lot of people angry.  But it is the sad reality of what we are facing.

Even if you focus on just the economy, the truth is that Mitt Romney’s “five point plan” is almost exactly the same thing that Barack Obama has been saying.

Many Americans believe that since Mitt Romney made lots of money on Wall Street conducting leveraged buyouts of vulnerable corporations that he understands how to fix our economy.

Sadly, that is not the truth.

I have listened to many Romney speeches about the economy and I keep waiting for some pearls of wisdom, but I have found that he is just as clueless about the economy as our other recent presidents have been.

Look, I know that there are a lot of people out there that have good hearts that want to have someone that they can believe in.

They want to believe that things can get better.

They want to have hope.

And I don’t blame them for that.

I just think that it is time to pull our heads out of the sand and realize that things are not going to be getting any better.

A political savior on a white horse is not going to come riding in to save the day.

So by this point in the article a whole lot of Democrats and a whole lot of Republicans are very upset with me.

But I am not against you.  There is way too much hate in our society today.  Even if we disagree with someone else we can still love them.

I just think that it is very important that we understand that there is not going to be a solution to our problems on the national level and that our economy is headed for collapse no matter who gets elected.

The total amount of debt in the United States has risen from less than 2 trillion dollars to nearly 55 trillion dollars over the past 40 years, and there is nothing that Barack Obama or Mitt Romney can do to prevent the “correction” that is coming.

So are Americans better off than they were four years ago?

Of course not.

But things will soon get a whole lot worse no matter how the election turns out.

The following are 40 statistics that will absolutely shock you….

#1 During the time Barack Obama has been in the White House, median household income has fallen by 7.3 percent.

#2 Back in 2007, 19.2 percent of all American families had a net worth of zero or less than zero.  By 2010, that figure had soared to 32.5 percent.

#3 According to the Federal Reserve, the median net worth of American families dropped “from $126,400 in 2007 to $77,300 in 2010“.

#4 According to the Pew Research Center, 61 percent of all Americans were “middle income” back in 1971.  Today, only 51 percent of all Americans are “middle income”.

#5 Back in 1970, middle income Americans brought home 62 percent of all income in the United States.  In 2010, middle income Americans only brought home 45 percent of all income.

#6 The unemployment rate in the United States has been above 8 percent for 42 straight months.

#7 The percentage of working age Americans with a job has been below 59 percent for 35 months in a row.

#8 In June, the number of Americans added to the food stamp rolls was nearly three times larger than the number of jobs added to the U.S. economy.

#9 Approximately 53 percent of all U.S. college graduates under the age of 25 were either unemployed or underemployed last year.

#10 Since Barack Obama entered the White House, the number of long-term unemployed Americans has risen from 2.7 million to 5.2 million.

#11 Today, the average duration of unemployment in the United States is about three times as long as it was back in the year 2000.

#12 According to a report that has just been released by the National Employment Law Project, 58 percent of the jobs that have been created since the end of the recession have been low paying jobs.

#13 According to the Center for Economic and Policy Research, only 24.6 percent of all of the jobs in the United States are “good jobs”.

#14 In 2010, the number of jobs created at new businesses in the United States was less than half of what it was back in the year 2000.

#15 The average pay for self-employed Americans fell by $3,721 between 2006 and 2010.

#16 According to U.S. Representative Betty Sutton, America has lost an average of 15 manufacturing facilities a day over the last 10 years.  During 2010 it got even worse.  That year, an average of 23 manufacturing facilities a day shut down in the United States.

#17 At this point, one out of every four American workers has a job that pays $10 an hour or less.

#18 While Barack Obama has been president the velocity of money has plunged to a post-World War II low.

#19 According to one recent survey, 85 percent of middle class Americans say that it is harder to maintain a middle class standard of living today compared with 10 years ago.

#20 Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.

#21 There are now 20.2 million Americans that spend more than half of their incomes on housing.  That represents a 46 percent increase from 2001.

#22 Over the past decade, health insurance premiums have risen three times faster than wages have in the United States.

#23 Health insurance costs have risen by 23 percent since Barack Obama became president.

#24 As I wrote about yesterday, back in 1980 less than 10 percent of U.S. GDP was spent on health care but now about 18 percent of U.S. GDP goes toward health care.

#25 In a previous article, I noted that 62 percent of all middle class Americans say that they have had to reduce household spending over the past year.

#26 Family budgets in America are being stretched to the breaking point.  Today, 77 percent of all Americans live paycheck to paycheck at least part of the time.

#27 While Barack Obama has been president, U.S. home values have fallen by another 11 percent.

#28 More than three times as many new homes were sold in the United States in 2005 as will be sold in 2012.

#29 The United States was once ranked #1 in the world in GDP per capita.  Today we have slipped to #11.

#30 Since Barack Obama became president, the number of Americans living in poverty has risen by 6.4 million.

#31 The number of Americans on food stamps has grown from about 17 million in the year 2000 to 31.9 million when Barack Obama entered the White House to 46.7 million today.

#32 Approximately one-fourth of all U.S. children are enrolled in the food stamp program at this point.

#33 It is being projected that half of all American children will be on food stamps at least once before they turn 18 years of age.

#34 It is estimated that child homelessness in the United States has risen by 33 percent since 2007.

#35 Back in 1965, only one out of every 50 Americans was on Medicaid.  Today, approximately one out of every 6 Americans is on Medicaid.

#36 As I wrote about the other day, it is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.

#37 It is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.

#38 The number of Americans receiving federal housing assistance increased by a whopping 42 percent between 2006 and 2010.

#39 At this point, well over 100 million Americans are enrolled in at least one welfare program run by the federal government.

#40 Amazingly, more than half of all Americans are now at least partially financially dependent on the government.

So are you better off than you used to be or worse off?

Please feel free to post a comment with your thoughts below….

+ More