Wealth

When Faith In U.S. Dollars And U.S. Debt Is Dead The Game Is Over – And That Day Is Closer Than You May Think

A day is coming when the rest of the world will decide that it no longer has faith in U.S. dollars or in U.S. debt.  When that day arrives, the game will be over.  Traditionally, two of the biggest things that the U.S. economy has had going for it were the U.S. dollar and U.S. Treasuries.  The U.S. dollar has been the default reserve currency of the world for decades.  All over the globe it was seen as a strong, stable currency that was desirable for international trade.  U.S. government debt has long been considered the “safest debt” in the entire world.  Whenever there was a major crisis, investors would flock to U.S. Treasuries because they were considered a rock.  Sadly, all of this is now changing.  Today the rest of the world is losing faith in the U.S. financial system.  In fact, even the United Nations is now warning of the collapse of the dollar.  But if the U.S. dollar and U.S. Treasuries collapse, that will be an absolute nightmare for the U.S. economy.  If the rest of the world does not want our dollars someday, then what are we going to give them in exchange for all of the oil and all of the cheap imported goods they send us?  If the rest of the world does not want our debt someday, then how in the world are we going to be able to continue to consume far, far more wealth than we produce?

The rest of the world is watching the U.S. government run up record-setting budget deficits and they are watching the Federal Reserve print money like there is no tomorrow and they realize that the U.S. financial system is slowly imploding.

As mentioned above, now even the United Nations is warning that the U.S. dollar could collapse.  The following is a brief excerpt from a recent news report put out by Reuters….

The United Nations warned on Wednesday of a possible crisis of confidence in, and even a “collapse” of, the U.S. dollar if its value against other currencies continued to decline.

In a mid-year review of the world economy, the UN economic division said such a development, stemming from the falling value of foreign dollar holdings, would imperil the global financial system.

But it is not just the United Nations that is concerned about the U.S. dollar.

On April 18th, Standard & Poor’s altered its outlook on U.S. government debt from “stable” to “negative” and warned that the U.S. could soon lose its prized AAA rating.

At one time, it would have been unthinkable for Standard & Poor’s to do such a thing.

But today it is amazing that it has taken them so long to make such a move.  U.S. government finances are falling apart.

When the credit rating of U.S. government debt starts declining, interest rates will go up.  Just ask the government of Greece how painful that can be.  Today, Greece is paying over 16 percent on 10 year bonds.

The following is what John Williams of Shadow Government Statistics recently had to say about why Standard & Poor’s issued such a warning about U.S. government debt….

S&P is noting the U.S. government’s long-range fiscal problems. Generally, you’ll find that the accounting for unfunded liabilities for Social Security, Medicare and other programs on a net-present-value (NPV) basis indicates total federal debt and obligations of about $75 trillion. That’s 15 times the gross domestic product (GDP). The debt and obligations are increasing at a pace of about $5 trillion a year, which is neither sustainable nor containable. If the U.S. was a corporation on a parallel basis, it would be headed into bankruptcy rather quickly.

Look, the rest of the world is not stupid.  They know that the U.S. government is hurtling towards financial disaster.  The appetite among foreigners for U.S. government debt is decreasing rapidly.

In fact, according to Zero Hedge, foreigners are dumping U.S. debt at a very rapid pace right now.

In addition, the cost to insure U.S. debt has risen sharply in recent days.

Right now, the Federal Reserve has been buying up most new U.S. government debt with dollars that it has created out of thin air.  This is a giant Ponzi scheme, and it is a major contributing factor to the decline of faith in the U.S. dollar.

The dollar has fallen by 17 percent compared to other major national currencies since 2009.  What makes that fact even sadder is that all major currencies have been rapidly losing value compared to hard assets over that time period.  The dollar is just sliding faster than almost all of the other global currencies that are constantly losing value as well.

Anyone with half a brain could have seen that this would be the end result of reckless government borrowing, but unfortunately our politicians have been ignoring this problem for decades.

Now a day or reckoning is fast approaching and it is going to be very painful.

The U.S. government has piled up the biggest mountain of debt in the history of the world.  Just consider a few shocking facts about this unprecedented debt….

*If the U.S. national debt (more than 14 trillion dollars) was reduced to a stack of 5 dollar bills, it would reach three quarters of the way to the moon.

*The U.S. government borrows about 168 million dollars every single hour.

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

*It is now being projected that by the year 2021, interest payments on the national debt will amount to $1.1 trillion dollars a year.

In a previous article on The American Dream, I detailed some more absolutely horrifying statistics about U.S. government debt….

#1 If you divide the national debt up equally among all U.S. households, each one owes a staggering $125,475.18.

#2 The federal government has borrowed 29,660 more dollars per household since Barack Obama signed the economic stimulus law two years ago.

#3 During Barack Obama’s first two years in office, the U.S. government added more to the U.S. national debt than the first 100 U.S. Congresses combined.

#4 In the new budget that the Obama administration has proposed, the U.S. government would spend 3.7 trillion dollars in 2012 and by 2021 the U.S. government would be spending a whopping 5.6 trillion dollars per year.

#5 The U.S. government currently has to borrow approximately 41 cents of every single dollar that it spends.

#6 The total compensation that the federal government workforce earned last year came to a grand total of approximately 447 billion dollars.

#7 The U.S. national debt is currently rising by well over 4 billion dollars every single day.

#8 The U.S. government is borrowing over 2 million more dollars every single minute.

#9 The U.S. national debt is over 14 times larger than it was just 30 years ago.

#10 Unfunded liabilities for entitlement programs such as Social Security and Medicare are estimated to be well over $100 trillion, and nobody in the U.S. government seems to have any idea how we are actually even going to come close to meeting all of those obligations.

#11 If you were alive when Christ was born and you spent one million dollars every single day since that point, you still would not have spent one trillion dollars by now.  But this year alone the U.S. government is going to go about 1.6 trillion dollars more into debt.

#12 If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.

So have our politicians learned anything from the mistakes of the past?

No.

The U.S. government continues to spend money on some of the most ridiculous things imaginable.  For example, the Department of Health and Human Services has just announced a brand new $500 million program that will, among other things, seek to solve the problem of 5-year-old children that “can’t sit still” in a kindergarten classroom.

Isn’t it good to see the government investing our hard-earned tax dollars so wisely?

Of course if our kids weren’t being constantly fed foods packed with sugar, high fructose corn syrup and aspartame we wouldn’t have to spend 500 million dollars to deal with this problem.

When it comes to government waste, nobody seems to do it any better than the U.S. government.

Our politicians continue to assume that the rest of the world will always want our dollars and our debt, but that is simply not the case.

Over the past couple of years, global leader after global leader has publicly talked about the need for a new world reserve currency.

In fact, globalist institutions such as the IMF and the World Bank have been very busy discussing what the world is going to use as a global reserve currency after the death of the dollar.

The rest of the world is not sitting around waiting to see if the U.S. financial system is going to recover.  They are already making plans for the demise of the dollar.  They are increasingly using other currencies to trade with.  They are becoming more hesitant to buy more of our debt.  They are realizing that the days of U.S. dominance are coming to an end.

So what is that going to mean for us?

It is going to be a complete and total disaster.

Right now, we live far, far beyond our means.  We borrow gigantic piles of money to make up the difference between what we produce and what we consume.  We are absolutely dependent on the fact that the rest of the world will take our dollars in exchange for the things that we need.

The current situation is not sustainable.

It will come to an end.

When it does, our standard of living is going to feel like it has changed overnight.

65 Ways That Everything That You Think That You Own Is Being Systematically Taken Away From You

Everything that you own is slowly being taken away from you.  It is being done purposely and it is being done by design.  Many Americans like to think of themselves as “well off”, but as will be demonstrated below, we don’t “own” nearly as much as we think that we do.  The truth is that most of us have to frantically run around accumulating wealth as rapidly as we can so that we can somehow stay ahead of the rate that wealth is being taken away from us.  The entire system is designed to take what you have away from you.  There are many ways that this is accomplished – taxation, inflation, debt, interest, fines, fees, tickets, government seizures and good old-fashioned corporate greed.  If you tried to just sit back and do nothing but hold on to the wealth that you already have you would find out that it would disappear rather quickly.  When you take the time to really analyze our system the conclusion is undeniable – everything that you think that you own is being systematically taken away from you.

There is a reason why the wealthiest one percent of all Americans control 40 percent of all the wealth in the United States.  The system is designed to funnel all of the wealth to them and to the government.  Average Americans are experiencing a declining standard of living and it is not by accident.

Just check out some of the ways that our wealth is being taken from us….

#1 Do you think that you own your house?  You might want to think again.  Most Americans that “own a home” are paying a mortgage.  If you stop paying that mortgage you will lose that home.  Over a million American families were kicked out of their homes last year.  This year a million more American families will get the boot.

But when those families get booted out onto the street they don’t get their down payments back.  They don’t get all the mortgage payments that they have made back.  The banks get to keep all of the money and all of the houses.

Perhaps you don’t have a mortgage.  Does that mean that you “own your home”?

No, not really.  Just refuse to pay your property taxes and watch what happens.  At best you can say that you have the right to rent your home from the government.

In any event, the reality is that the banks now own more of “our homes” than we do.  During the most recent recession, the total amount of U.S. home equity owned by the banks surpassed the total amount of U.S. home equity owned by the rest of us for the first time ever.

Things used to be far different in this country.  Once upon a time American families owned most of the houses and most of the land in this nation.

But now the banks own most of it.  Sadly, most American families that believe that they “own homes” are actually enslaved to 20 or 30 year debt contracts.

#2 Do you think that you own your car?  You don’t own it if you are still making payments on it.  If you stop making payments you will rapidly lose that car.

But even if your car is paid off, you can only operate that car if you do the following….

*You must pay the license fee

*You must pay the car registration fee

*You must pay the emissions inspection fee

*You must pay the property taxes on that car (if that applies in your area)

*You must pay the tire taxes

*You must pay the gas taxes

If you have paid all of those taxes, then you are permitted to drive only where the government allows you to drive and only under the rules that the government sets for you.

But at least you “own” your car, right?

#3 What about your possessions?  Do you own them?

Well, yes, you probably own some possessions.

But that doesn’t mean that they are not enslaving you.

After all, did you use a credit card to pay for any of them?

If so, you could end up paying much more for your possessions than you originally thought that they cost.

For example, if you only make the minimum payment on your credit card each month, a $6,000 credit card bill could end up costing you over $30,000 (depending on the interest rate).

#4 Do you own your education?  Well, it is undeniable that nobody can ever take it away from you.  But if you took out student loans that debt may end up enslaving you for decades.

The borrower is the servant of the lender and student loan debt is more of a financial drain on Americans than ever before.  Americans now owe more on student loans than they do on credit cards.  As hard as that is to believe, that is actually true.  Americans now owe more than $903 billion on student loans, which is a new all-time record.

#5 Will you protect your wealth if you put your money in the bank?

No, in fact your wealth will be systematically destroyed in the bank.

Inflation is a hidden tax on every single dollar that you own.  It destroys the value of all dollars in existence.  There are some Americans that have been saving money for decades, but those savings are being taxed into oblivion by inflation.  Many experts are now projecting that the average price of a gallon of gasoline will hit $5 by the end of the year.  So the next time you go to the gas pump just take a moment to think about how your wealth is being drained away by inflation.

#6 Insurance costs continue to soar.  After insuring everything in our lives many of us barely have any money left over to actually live our lives with.  In particular, health insurance premiums have become completely and totally ridiculous.  According to the Los Angeles Times, Blue Shield of California plans to raise rates an average of 30% to 35%, and some individual policy holders could see their health insurance premiums rise by a whopping 59 percent this year alone.  So how are American families supposed to survive if they keep on handing over bigger and bigger chunks of their income to the health care industry?

#7 State and local governments all over the nation have turned to ticket writing as a primary revenue source.  In fact, in some areas of the country traffic citations are soaring at a crazy rate.  For example, 110,000 more traffic citations were written in Los Angeles County last fiscal year than were written in the fiscal year immediately prior to the last recession.

The truth is that the police even realize what is going on.  Just consider the following quote from from Police Chief Michael Reaves of Utica, Michigan….

“When I first started in this job 30 years ago, police work was never about revenue enhancement, but if you’re a chief now, you have to look at whether your department produces revenues.”

#8 Some states have decided to simply confiscate wealth even if nothing has been done wrong.  For example, the state of California is aggressively seizing “unclaimed” safe deposit boxes.  If you have a safe deposit box that you have not checked on in a while you might want to make sure that it is still there.

#9 You might end up losing your valuables when you cross the border.  It is being reported that U.S. border agents are now regularly seizing laptops and other electronic devices as people cross the border.  In many cases those items are never returned.

#10 If you don’t pay your property taxes, you will lose your house and it will likely be a big Wall Street bank that will be taking it from you.  As I have written about previously, the big Wall Street banks are buying up thousands upon thousands of tax liens and are making a killing by socking distressed homeowners with predatory interest, outrageous penalties and almost unbelievable legal fees.

#11 Of course the biggest way that our wealth is being drained is through federal income taxes.  The reason that the Federal Reserve and the IRS were established back in 1913 was to redistribute wealth.  Wealth is transferred from the American people to the U.S. government and then ultimately to the elite and to the causes that the elite favor.

But federal taxes are only one of the taxes that we pay.  The truth is that the average American pays dozens of different taxes each year.  Just check out a few examples of the different taxes that drain our wealth….

#12 Accounts Receivable Taxes

#13 Building Permit Taxes

#14 Capital Gains Taxes

#15 CDL License Taxes

#16 Cigarette Taxes

#17 Corporate Income Taxes

#18 Court Fines (indirect taxes)

#19 Dog License Taxes

#20 Federal Unemployment Taxes (FUTA)

#21 Fishing License Taxes

#22 Food License Taxes

#23 Gasoline Taxes

#24 Gift Taxes

#25 Hunting License Taxes

#26 Inheritance Taxes

#27 Inventory Taxes

#28 IRS Interest Charges (tax on top of tax)

#29 IRS Penalties (tax on top of tax)

#30 Liquor Taxes

#31 Local Income Taxes

#32 Luxury Taxes

#33 Marriage License Taxes

#34 Medicare Taxes

#35 Payroll Taxes

#36 Property Taxes

#37 Real Estate Taxes

#38 Recreational Vehicle Taxes

#39 Road Toll Booth Taxes

#40 Road Usage Taxes (Truckers)

#41 Sales Taxes

#42 Self-Employment Taxes

#43 School Taxes

#44 Septic Permit Taxes

#45 Service Charge Taxes

#46 Social Security Taxes

#47 State Income Taxes

#48 State Unemployment Taxes (SUTA)

#49 Telephone federal excise taxes

#50 Telephone federal universal service fee taxes

#51 Telephone federal, state and local surcharge taxes

#52 Telephone minimum usage surcharge taxes

#53 Telephone recurring and non-recurring taxes

#54 Telephone state and local taxes

#55 Telephone usage charge taxes

#56 Toll Bridge Taxes

#57 Toll Tunnel Taxes

#58 Traffic Fines (indirect taxation)

#59 Trailer Registration Taxes

#60 Utility Taxes

#61 Vehicle License Registration Taxes

#62 Vehicle Sales Taxes

#63 Watercraft Registration Taxes

#64 Well Permit Taxes

#65 Workers Compensation Taxes

Even the future is being taken away from us.  The future is literally being stolen from our children and our grandchildren.  They will be inheriting the 14 trillion dollar (and still rising) national debt that we have accumulated.  What we have done to future generations is unthinkable, and yet we continue to endlessly borrow more money.  The Congressional Research Service estimates that the U.S. government will need to borrow $738 billion between April 1st and September 30th.  Faith in U.S. Treasuries is falling so rapidly that now the biggest bond fund in the world, PIMCO, is actually shorting U.S. Treasuries.

When you base an entire economy on debt, eventually you end up with money problems that never seem to end.  As a nation we are now enslaved to a vicious spiral of debt that is going to destroy everything that our forefathers worked so hard to build.

As the debt loads of our federal, state and local governments become even more burdensome, they are going to want even more money from us.  For decades we gave in to new tax after new tax thinking that it would finally satisfy them.  But it never seems to be enough.  They always want more.

It is the same thing with the banksters.  They are never satisfied either.  They always want more assets and they always want more Americans to be enslaved to debt.

Unfortunately, most Americans are so caught up in the “rat race” that they never take much time to think about who designed the race or why they are running it.

Hopefully more Americans will wake up and will realize that our entire economy and our entire financial system need to be reformed.  Our current system is inherently flawed and it will eventually impoverish the vast majority of us if we allow it to.

The Japanese Economy Is In Much Bigger Trouble Than Most People Think

Now that nearly a month has gone by since the horrific tsunami in Japan on March 11th, it is starting to become clear just how much economic damage has been done.  The truth is that the Japanese economy is in much bigger trouble than most people think.  This is almost certainly going to be the most expensive disaster in Japanese history.  The tsunami that struck Japan on March 11th swept up to 6 miles inland, destroying virtually everything in the way.  Thousands upon thousands of Japanese were killed and entire cities were wiped off the map.  Yes, Japan is a resilient nation, but exactly how does a nation that is already drowning in debt replace dozens of cities and towns that are suddenly gone?  The truth is that thousands of square miles have been more completely destroyed than if they had been bombed by a foreign military force. The loss of homes, cars, businesses and personal wealth is almost unimaginable. It is going to take many years to rebuild the roads, bridges, rail systems, ports, power lines and water systems that were lost.  Nobody is quite sure when the rolling blackouts are going to end, and nobody is quite sure when all of the damaged manufacturing facilities are going to be fully brought back online.

On top of everything else, the nuclear crisis at Fukushima never seems to end.  In fact, it seems to get worse with each passing day.

According to the Los Angeles Times, it has now been announced that seawater off the coast of Japan near the Fukushima facility was recently found to contain 7.5 million times the legal limit of radioactive iodine….

The operator of Japan’s stricken Fukushima nuclear plant said Tuesday that it had found radioactive iodine at 7.5 million times the legal limit in a seawater sample taken near the facility, and government officials imposed a new health limit for radioactivity in fish.

Do you think anyone is going to want any Japanese seafood after this?

In fact, at this point one must really question the long-term prospects for the seafood industry in that entire region of Asia.  There are going to be tens of millions of people (myself included) that will no longer want anything to do with any seafood that comes from that part of the world.

Sadly, some nuclear experts now claim that it could take years to bring the reactors at Fukushima fully back under control.

At the end of this crisis, how large of an area around Fukushima will be uninhabitable?

A 20 km radius?

A 30 km radius?

A 40 km radius?

More?

Japan is the third largest economy in the world, but it never was a large nation to begin with.  Now that the tsunami and the nuclear crisis at Fukushima have made the amount of usable land significantly smaller, what is that going to mean for the future of the Japanese economy?

That is a very good question.

The truth is that there are already signs that the Japanese economy is regressing into another recession.

According to The Telegraph, one major manufacturing index in Japan has already shown a very serious decline….

The purchasing mangers’ index (PMI) gave an early indication of the extent of the damage wreaked on the economy as it dropped 6.5 points to a reading of 46.4, the largest slide since the survey began in late-2001.

In particular, the auto industry is really being affected by this crisis.  Vehicle supply chains all over the globe are now in a state of chaos.

Approximately 3,000 individual parts go into every single new vehicle.  If even one of those parts is missing, a new car or truck cannot be built.

So just how big of a problem are we looking at?

Well, it was originally projected that 72 million vehicles would be built around the globe in 2011.

As a result of the crisis in Japan, approximately 5 million of those vehicles will not be built.

That is very serious.

In fact, Goldman Sachs is projecting that this crisis is currently costing automakers in Japan $200 million every single day.

Ouch!

A recent article on CNBC detailed some of the problems that Japanese automakers are facing right now….

In the weeks ahead, car buyers will have difficulty finding the model they want in certain colors, thousands of auto plant workers will likely be told to stay home, and companies such as Toyota, Honda and others will lose billions of dollars in revenue. More than two weeks since the natural disaster, inventories of crucial car supplies — from computer chips to paint pigments — are dwindling fast as Japanese factories that make them struggle to restart.

Unfortunately, the worst for the auto industry is yet to come.  AutoNation is warning that “production disruptions will significantly impact product availability from Japanese auto manufacturers in the second and third quarters of 2011.”

Because of supply chain disruptions, a number of North American manufacturing facilities look like they will be shutting down at least for a while.

For example, Toyota has announced that it will be shutting down all of its North American factories for a certain period of time because of shortages of parts from Japan.

But Toyota is far from alone as a recent report in The Globe and Mail made quite clear….

Honda Motor Co. Ltd. has already slashed output by half at its North American plants, while Nissan Motor Co. Ltd. will shut all its U.S. and Mexican plants for at least one week in April. Ford Motor Co., too, has halted production at a truck plant in Kentucky this week.

So why don’t North American facilities just switch to other suppliers?

Unfortunately, as CNN recently noted, it is just not that simple….

Japanese companies also specialized in making the array of highly specialized computer chips that control everything from the engine to the brakes in modern cars. Computer chip production is a complex process that can take weeks and involves hundreds of individual steps, Morgan Stanley analyst Noriaki Hirakata said.

Not only that, but if an automaker is forced to find a new source for an electronic chip, the process of “certifying” a new computer chip supplier — that is, determining that a new company can meet all the requirements for cost, quality and quantity — can take as long as a year, Hirakata said.

The truth is that this is a complete and total economic disaster.

The Japanese economy is not going to be the same for many years to come.  In fact, many are now warning that this could be one of the triggers that could lead to another major global financial crisis.

One of the big fears is that Japan will need to sell off a large amount of U.S. Treasuries to fund the rebuilding of that nation.

If that were to happen, it could result in a “liquidity crisis” similar to what we saw in 2008.  Already the rest of the world is really starting to lose confidence in the U.S. dollar and in U.S. Treasuries, and if Japan starts massively dumping U.S. government debt things could get out of control fairly quickly.

In any event, it is undeniable that the Japanese economy has been absolutely devastated by this crisis.  In fact, when you combine the tsunami and the nuclear crisis, this could be the biggest economic disaster that any major industrial power has faced since World War 2.

So will the crisis in Japan push the rest of the globe into another major recession?

Only time will tell.

How Can America Create Wealth If Our Industrial Base Is Destroyed? 50,000 Manufacturing Jobs Have Been Lost Every Month Since 2001

Any economy that constantly consumes far more wealth than it produces is eventually going to be in for a very hard fall.  Many point to relatively stable GDP numbers as evidence that the U.S. economy is doing okay, but the truth is that we have had to borrow increasingly massive amounts of money to keep GDP numbers up at that level.  The U.S. government is going to run an all-time record deficit of about 1.65 trillion dollars this year and average household debt in the United States has now reached a level of 136% of average household income.  But borrowing endless amounts of money and consuming massive amounts of wealth with that borrowed money is a road that leads to economic oblivion.  The only way to have a healthy economy in the long run is to create wealth.  But how can America create wealth if our industrial base is being absolutely destroyed?  According to Forbes, the United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001.  Hundreds of formerly thriving industries in the United States are being totally wiped out.  China uses every trick in the book to win trade battles.  They deeply subsidize their domestic industries, they openly steal technology, they blatantly manipulate currency rates and they allow their citizens to be paid slave labor wages.  So yes, the products coming from China are cheaper, but in the process tens of thousands of factories in the U.S. are shutting down, millions of jobs are being lost and the ability of America to create wealth is being compromised.

In 2010, the U.S. trade deficit was just a whisker under $500 billion.  Much of that trade deficit was with China.

During 2010, we spent $365 billion on goods from China while they only spent $92 billion on goods from us.

Does a 4 to 1 ratio sound like a “fair and balanced” trade relationship to anyone out there?

Our trade deficit with China in 2010 was the largest trade deficit that one country has ever had with another country in the history of the world.

In fact, the U.S. trade deficit with China in 2010 was 27 times larger than it was back in 1990.

Needless to say, that is not a good trend.

Our industrial base and our ability to create wealth is being wiped out so rapidly that it has now become a very serious threat to our national security.

According to Forbes, there is only one steel plant inside the United States that is still capable of producing steel of high enough quality to meet the needs of the U.S. military, and even that plant has been bought by a European company.

Meanwhile, China produced 11 times as much steel as America did last year.

Not only that, China is now the number one supplier of components that are critical to the operation of U.S. defense systems.

How in the world did we let that happen?

So what happens if we have a conflict with China someday?

But of more immediate concern is the loss of jobs that the destruction of our industrial base is causing.

For example, the Ivex Packaging Paper plant in Joliet, Illinois just announced that it is shutting down for good after 97 years in business.  79 good jobs will be lost.  Meanwhile, China has become the number one producer of paper products in the entire world.

But China is not just wiping the floor with us when it comes to things like steel and paper.

The truth is that China has now become the world’s largest exporter of high technology products.  Back in 1998, the United States had 25 percent of the world’s high tech export market and China had just 10 percent. Ten years later, the United States had less than 15 percent and China’s share had soared to 20 percent.

So how is China doing it?  Well, as noted above, they are pulling every trick that they can think of.

Most Americans think that we have “free trade” with nations such as China.  That is a complete and total lie and anyone that believes that we have “free trade” with China does not know what they are talking about.

China subsidizes their domestic industries to such an extreme extent that many global industries no longer even come close to resembling “free markets” as a recent story in Forbes noted….

According to a story in the January 20, 2009 New York Times, government subsidies so thoroughly disrupted pricing in the global market for antibiotics that many western producers had to either move facilities to Asia or exit the business entirely. The reason this might matter to intelligence analysts is that the last U.S. source of key ingredients for antibiotics — a Bristol-Myers Squibb plant in East Syracuse, New York — has now closed, leaving the U.S. dependent on foreign sources in a future conflict.

Our politicians and our business leaders have pursued economic policies that are so self-destructive that it defies explanation.

How in the world could anyone be so stupid?

Since 2001, over 42,000 U.S. factories have closed down for good.  Millions of jobs have been lost.  The ability of the once great American economic machine to create wealth has been neutered.

The business environment in America is completely and totally pathetic at this point.  The number of small businesses that are being created is also way, way down.

According to the U.S. Census Bureau, only 403,765 small businesses were created in the 12 months that ended in March 2009.  That was down 17.3% from the previous year, and it was the smallest number of small businesses created since records began being kept in 1977.

The truth is that the U.S. economy is dying.

We continue to consume about the same amount of wealth that we always have, but our net worth is declining.

According to the Federal Reserve, more than two-thirds of Americans have seen their net worth decline during this economic downturn.  In fact, the Fed says that between 2007 and 2009, the wealth of the average American family declined by 23%.

So if it seems like your family and everyone around you is getting poorer, that is because it really is happening.

We really are becoming poorer as a nation.

We can see evidence of this all around us.  Just consider a few of the examples that have been in the news in recent days….

*One school district in the Chicago area is laying off 363 teachers.

*The U.S. Postal Service is offering $20,000 buyouts to thousands of workers as they attempt to slash 7,500 good paying jobs.

*The city of Detroit, once a shining example of middle class America, is now a rotting cesspool of economic decline and it saw its population decline by 25 percent over the decade that recently ended.

Americans are not feeling the full impact of America’s industrial decline yet because we have been filling the gap in wealth creation with massive amounts of debt.

In the years since 1975, the United States had run a total trade deficit of 7.5 trillion dollars with the rest of the world.  That 7.5 trillion dollars could have gone to support U.S. businesses and U.S. workers, but instead it left the country and went into the hands of foreigners that do not pay taxes.

Therefore, the U.S. government, state governments and our local governments have had to borrow massive amounts of money to make up the difference.

Most people do not realize it, but the destruction of America’s industrial base has played a very significant role in the government debt crisis we are facing today.

In addition, the millions upon millions of workers that have lost their jobs as America’s industrial base has been destroyed are now a drain on the system.  Instead of creating wealth and being involved in economically productive activity, millions of American workers are now totally dependent on the U.S. government for survival.

Do you think that it is just some sort of accident that we have 44 million Americans on food stamps?

Don’t you think that a large percentage of those people would actually like to have good jobs that would enable them to sufficiently feed their families?

If we continue on the path that we are currently on we are not going to have much of an economy left.

Not that all trade is bad.  Certainly not.  For example, trade with Canada is generally a very good thing.

However, the horribly unbalanced and unfair trade relationships that we have with nations such as China are ripping our industrial base apart.  Our politicians have not been telling us the truth about what the “global economy” will mean for American workers.  Most U.S. workers never realized that globalism would mean that they would be competing for jobs with workers willing to work for one-tenth the pay on the other side of the globe.

Those people that believe that we can indefinitely maintain an economy where we consume far more wealth than we create are completely and totally delusional.

Until the American people wake up and start demanding change from our politicians on these issues, 50,000 (or more) manufacturing jobs will continue to fly out the doors every single month and even more Americans will become dependent on government welfare.

Is that what you want?

14 Reasons Why The Economic Collapse Of Japan Has Begun

The economic collapse of Japan has begun.  The extent of the devastation is now becoming clear and many are now projecting that this will be the most expensive natural disaster in modern human history.  The tsunami that struck Japan on March 11th swept up to 6 miles inland, destroying virtually everything in the way.  Countless thousands were killed and entire communities were totally wiped out.  So how does a nation that is already drowning in debt replace dozens of cities and towns that have suddenly been destroyed?  Many in the mainstream media are claiming that the economy of Japan will bounce right back from this, but they are wrong.  The tsunami decimated thousands of square miles.  The loss of homes, cars, businesses and personal wealth is almost unimaginable.  It is going to take many years to rebuild the roads, bridges, rail systems, ports, power lines and water systems that were lost.  There are going to be a significant number of Japanese insurance companies and financial institutions that are going to be totally wiped out as a result of this great tragedy.  Of course in the days ahead the Japanese people will band together and work hard to rebuild the nation, but the truth is that it is impossible to “bounce right back” from such a massive loss of wealth, assets and infrastructure.

Just think about what happened after Hurricane Katrina.  Did the economy of New Orleans bounce right back?  No, there are some areas of New Orleans today that still look like war zones.

Well, this disaster is much worse.

The truth is that this is going to be one of the defining moments in the history of Japan.  Hundreds of miles along the coast of Japan have been absolutely devastated.  Authorities are finding it difficult to even get food and water into some areas at this point.

Even before this great tragedy Japan was one of the nations that was on the verge of a national economic collapse.  Their economy had been in the doldrums for over a decade and their national debt was well over 200 percent of GDP.  Now the Japanese economy has experienced a shock from which it may never truly recover.

The Bank of Japan is already flooding the Japanese economy with new yen, and so we may indeed see some impressive “economic growth” statistics at the end of the year.  But just because lots more yen are being passed around does not mean that the Japanese economy is in better shape.

The truth is that a tsunami of yen is not going to undo the damage that the tsunami of water did.  A massive amount of Japanese wealth was wiped out by this disaster.  An economy that was already teetering on the brink is now very likely going to plunge into oblivion.

It is fine to be optimistic, but the cold, hard reality of the situation is that this is a knockout blow for the Japanese economy.  The extent of the devastation is just too great.  This truly is a complete and total nightmare.

The following are 14 reasons why the economic collapse of Japan has now begun….

#1 The Bank of Japan has announced that they have decided to flood the Japanese economy with 15 trillion yen.  That is the equivalent of roughly $183 billion dollars.  This is going to provide needed liquidity in the short-term, but it is also going to set Japan on a highly inflationary course.

#2 Japan’s Nikkei 225 stock average declined by more than 6 percent on Monday.  As the full extent of the damage becomes apparent more declines are likely.

#3 Oil refineries all over Japan have been severely damaged or destroyed.  For example, six refineries that combine to process 31 percent of the oil for Japan have been totally shut down at least for now.

#4 The damage to roads, bridges, ports and rail systems is estimated to be in the billions of dollars.  The damage done to power lines and water systems is almost unimaginable.  It is going to take many years to rebuild the infrastructure of Japan.

#5 Right now the flow of goods and services in many areas of northern Japan has been reduced to a crawl, and this is likely to remain the case for quite some time.

#6 Many cities and towns along the east coast of Japan have essentially been completely destroyed.

#7 Japan’s nuclear industry is essentially dead in the water at this point.  Even if there is not a full-blown nuclear meltdown, the events that have transpired already have frightened people enough to cause a massive public outcry against nuclear power in Japan.

#8 Japan is going to need even more oil and natural gas in the long run to replace lost nuclear energy production.  Prior to this crisis, Japan derived 29 percent of its electricity from nuclear power.

#9 Japan is the second largest foreign holder of U.S. government debt, but that is about to change.  Japan currently has about $882 billion in U.S. Treasury bonds and they are going to have to liquidate much of that in order to fund the rebuilding of their nation.

#10 Many factories in Japan are closing down at least temporarily.  For example, Nissan has shut down four factories and Sony has shut down six factories.

#11 Toyota has shut down all production at its factories in Japan until at least March 16th.

#12 A substantial number of Japanese financial institutions and insurance companies are absolutely going to be devastated by this nightmare.

#13 Japan’s budget deficit was already 9 percent of GDP even before this tragedy.  Now they are going to have to borrow lots more money to fund the rebuilding effort.

#14 Japan’s national debt was already well over 200 percent of GDP even before this tragedy.  How much farther into the danger zone can they possibly go?

Sadly, as the economy of Japan goes down it is going to have a huge affect on the rest of the world as well.  For example, Japan is no longer going to be able to buy up huge amounts of U.S. Treasuries.  So who is going to pick up the slack?  Will our government officials beg China to lend us even more money?  Will the Federal Reserve just “buy” even more of our government debt?

Right now there are more questions than there are answers, but what is clear is that the Japanese economy has just been dealt an incapacitating blow.  Hopefully this tragedy will bring out the best in the Japanese people, but no matter how resilient they are, the truth is that this is something that no nation would be able to bounce back from quickly.

Let us hope that the economic damage from this tragedy will be contained and will not spread to the rest of the world.  The global economy is already in enough trouble, and hopefully this tragedy will not cause a cascade of economic failures to sweep the globe.

Shocking Video Of Howard Dean Declaring That It Is The Job Of The Government To Redistribute Our Wealth

In the shocking video you are about to watch, Howard Dean declares that it is the job of the government to redistribute our wealth.  Not only that, he says it in such a way that indicates that he believes that such a notion should be obvious to anyone with half a brain.  Well, while it is true that the United States has become a highly socialized nation, the reality is that this is not what the founding fathers intended.  The founders intended for us to live in a land where we would have enough freedom and enough liberty to be able to work hard and enjoy life, liberty and the pursuit of happiness.  They did not intend for a gigantic federal government to take huge amounts of money from one group of people and give it to another group of people.  In any nation where a large scale redistribution of wealth is happening, the incentive to work goes right out the window.  Pretty soon you end up with an entire class of people that have learned how to “make a living” by being a parasite of the government, and that is not good for any economy.

If our founding fathers were alive today, they would be horrified by what we have turned into.  In 1816, Thomas Jefferson wrote the following….

“To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it.”

The sad truth is that democracy starts to break down once people start realizing that they can vote themselves money out of the national treasury.  In fact, that is a very large part of what politics in America is all about today.  Politicians are constantly promising what they are “going to do” for various groups of people.

Benjamin Franklin once stated the following….

“When the people find that they can vote themselves money, that will herald the end of the republic.”

Not that our founding fathers were against charity.  In fact, they believed in it very much.  It is just that they did not believe in repressive taxation by a huge national government and they did not believe in large scale redistributions of wealth.

With all of that in mind, watch this shocking video of Howard Dean declaring that it is the job of the government to redistribute our wealth….

Obviously Howard Dean envisions an “America” that is very different from the one that our founding fathers intended.

But does that mean that all government welfare programs are bad?

Of course not.

In fact, if we were to cut them all off today we would have millions of people starving in the streets.

A very large percentage of Americans today don’t even know how to take care of themselves.  If we pulled away all government support all of a sudden there would be chaos and anarchy in the streets.

The sad reality is that we have tens of millions of Americans that are now deeply dependent on the socialist system that we have established.

Unfortunately, this is what socialism does – it turns people into pets of the government.  Our society should be teaching people to be self-sufficient, but instead we are teaching people to allow the government to take care of them from the cradle to the grave.

So does that mean that our founding fathers would be in favor of the rampant corporate greed that we are witnessing today?

Of course not.

As I have written about previously, the founding fathers were against all large concentrations of power.  During the Boston Tea Party, it was the tea of perhaps the most powerful corporation in the entire world at the time (the East India Trading Company) that our founders dumped into the harbor.

If you study early American history, you soon come to realize that corporations were generally very limited in scope and size for many, many years.  The era of the giant corporation is relatively new, and our founding fathers never intended for our society to be dominated by gigantic international corporations.

So when the Democrats argue that we should give more power to the federal government and the Republicans argue that we should give more power to the big corporations they are both wrong.

Our founding fathers did not intend for our federal government to have nearly so much power and they did not intend for big, wealthy corporations to have so much power either.

Fortunately, many Americans today are getting back in touch with those principles.  There is a growing dissatisfaction with the size of government, and according to Gallup two-thirds of Americans are now dissatisfied with the size and influence of major corporations in America today.

However, it is one thing to discuss the finer points of political and economic philosophy, but it is another thing altogether to deal with the reality of tens of millions of people that cannot feed themselves.

As I have mentioned many times before, there are over 43 million Americans on food stamps today.

So what are we going to do with all of them?

Allow them to starve?

Almost 53 million Americans receive Social Security payments.

What are we going to do – cut off Social Security and watch millions of elderly and disabled people freeze to death in their own homes?

Of course not.

But we have got to start swinging the pendulum back in the other direction.  Right now one out of every six Americans is enrolled in some kind of anti-poverty program run by the federal government.

How many Americans being taken care of by the federal government will be too much?

One out of five?

One out of four?

One out of three?

Eventually the entire system crumbles when there are too few people still willing to work hard.

If you ever get the chance to visit a communist country you should.  You will notice that nobody really works very hard.  That is because there is no incentive to work hard.  Very little real wealth gets produced and everyone suffers for it.

So does that mean the U.S. system works?

Of course not.

What we have in the United States today is not real capitalism.  It is more aptly called “corporatism”.  The big corporations and the big financial institutions have accumulated an absolutely stunning amount of economic power and over the decades they have gotten the government to tilt all of the rules of the game in their favor.

In America today, it is really hard for the average person to start a successful business.  The big, powerful international corporations that dominate our economy are everywhere.

So most Americans today have to rely on working for an employer.  Unfortunately, the big employers have started to realize that they can make much larger profits by shipping our jobs overseas.  That is really bad news for the U.S. middle class.

Well, can’t we just tax all of these big corporations like crazy and even everything out?

Unfortunately it just does not work that way in today’s global society.

As I have written about previously, the ultra-wealthy and many of the biggest corporations have figured out how to “minimize” their tax burdens.  While you and I are being taxed into oblivion, the global elite have figured out how to move their money around to escape taxation as much as possible.  In fact, it is estimated that today approximately a third of all the wealth in the world is held in “offshore” tax havens.

Ultra-wealthy individuals and mega-powerful corporations can call just about anywhere “home” in today’s global economy.  That is just the way the world works now.

In order to “tax the rich”, you first must get legal jurisdiction over their money.

Our tax system has become entirely unfair and it simply does not work.  The whole thing needs to be scrapped.

But as we discuss tax policy, there are tens of millions of Americans that are living in poverty.

So what are we going to do about the growing number of Americans that cannot even feed themselves without government help?

Well, the truth is that what they really need is not more handouts.

If you give people handouts, they will just need more handouts tomorrow.

No, what all of these Americans really need are good jobs.

Unfortunately, there are a whole lot less good jobs in America today than there were ten years ago.

Our politicians have stood by as the giant corporations have moved thousands of facilities over to places such as China and India where they can legally pay people slave labor wages.

Since 2001, over 42,000 U.S. factories have closed down for good, and that number is going to continue to increase unless someone stops it.

But nobody is.

Virtually all of our politicians are just standing off to the side with their hands in their pockets.

So now we have 19.3 percent of the workforce that is either unemployed or underemployed.

Our entire economic system is breaking down.  Millions of Americans families are scrambling to find some way to survive.  Over the past two years, U.S. consumers have withdrawn $311 billion more from savings and investment accounts than they have put into them.

Other Americans are going very deep into debt because they don’t have any other options.  When they finally can’t keep up with all the debt, many of these families are losing their cars and their homes.

We are in the middle of an economic nightmare that is absolutely unprecedented.  “Redistributing the wealth” would just be like rearranging the deck chairs on the Titanic at this point.  It would not fix a darn thing.

When our politicians promise that a little “change” here or a little “tweak” there will get our economy back to normal they are lying to you and most of them know it.

What we need is a comprehensive overhaul of our entire economy.  Basically what we need to do is to go back to the blueprint (the U.S. Constitution) and essentially start over.

But most Americans are not ready for that.  Most Americans are still enjoying the tremendous prosperity that the biggest debt binge in the history of the world has purchased for us.  Most Americans still do not believe that an economic collapse is really coming.

But a massive economic collapse is coming.  This whole thing is going to come crashing down and it is not going to be pretty.

Is America In Decline? 24 Statistics About The United States Economy That Are Almost Too Embarrassing To Admit

Does anyone really want to hear that America is in decline?  For decades, most of us have been raised to believe that the United States is “number one” and that anyone who doubts that fact is a “gloom and doomer” that should just pack up and move to “Russia” or “Iraq” or some other country where things are not nearly as good.  But does it do us or future generations any good to ignore the very serious signs of trouble that are erupting all around us?  The truth is that it is about time to wake up and admit how much trouble we are actually in.  The U.S. government is absolutely drowning in debt.  The entire society is absolutely drowning in debt.  We are being slaughtered in the arena of world trade, and every single month tens of billions of dollars (along with large numbers of factories and jobs) leave our shores for good.  Our infrastructure is failing, our kids are less educated and our incomes are going down.  We have serious, serious problems.  At one time, the U.S. economy was so dominant that it was not even worth talking about who was in second place.  That is no longer the case in 2010.  Our forefathers handed us the greatest economic machine in history and we have allowed it to fall apart right in front of our eyes.  A national economic crisis of historic proportions is getting worse with each passing month, and yet most of our leaders seem to be asleep at the switch.  

So is American in decline?  Well, read the statistics below and decide for yourself.  The reality is that when you start connecting the dots it gets really hard to deny what is going on.

Urgent action must be taken if things are going to be turned around.  It is time to get our heads out of the sand.  It is not guaranteed that the United States will always be the greatest economy in the world or that we will even continue to be prosperous. 

For many Americans, it will be incredibly difficult to admit that our nation has become a debt addict and an economic punching bag for the rest of the world. 

But if we are never willing to admit what the problems are, how are we ever going to come up with the solutions?

What you are about to read below is going to absolutely shock many of you.  But hopefully it will shock you enough to get you to take action.  We desperately need to change course as a nation.

The following are 24 statistics about the United States economy that are almost too embarrassing to admit….

#1 Ten years ago, the United States was ranked number one in average wealth per adult.  In 2010, the United States has fallen to seventh.

#2 The United States once had the highest proportion of young adults with post-secondary degrees in the world.  Today, the U.S. has fallen to 12th. 

#3 In the 2009 “prosperity index” published by the Legatum Institute, the United States was ranked as just the ninth most prosperous country in the world.  That was down five places from 2008.

#4 In 2001, the United States ranked fourth in the world in per capita broadband Internet use.  Today it ranks 15th.

#5 The economy of India is projected to become larger than the U.S. economy by the year 2050.

#6 One prominent economist now says that the Chinese economy will be three times larger than the U.S. economy by the year 2040.

#7 According to a new study conducted by Thomson Reuters, China could become the global leader in patent filings by next year.

#8 The United States has lost approximately 42,400 factories since 2001. 

#9 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

#10 Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.

#11 In 1959, manufacturing represented 28 percent of all U.S. economic output.  In 2008, it represented only 11.5 percent.

#12 The television manufacturing industry began in the United States.  So how many televisions are manufactured in the United States today?  According to Princeton University economist Alan S. Blinder, the grand total is zero.

#13 As of the end of 2009, less than 12 million Americans worked in manufacturing.  The last time that less than 12 million Americans were employed in manufacturing was in 1941.

#14 Back in 1980, the United States imported approximately 37 percent of  the oil that we use.  Now we import nearly 60 percent of the oil that we use.

#15 The U.S. trade deficit is running about 40 or 50 billion dollars a month in 2010.  That means that by the end of the year approximately half a trillion dollars (or more) will have left the United States for good.

#16 Between 2000 and 2009, America’s trade deficit with China increased nearly 300 percent.

#17 Today, the United States spends approximately $3.90 on Chinese goods for every $1 that China spends on goods from the United States.

#18 According to a new study conducted by the Economic Policy Institute, if the U.S. trade deficit with China continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone.

#19 American 15-year-olds do not even rank in the top half of all advanced nations when it comes to math or science literacy.

#20 Median household income in the U.S. declined from $51,726 in 2008 to $50,221 in 2009.  That was the second yearly decline in a row.

#21 The United States has the third worst poverty rate among the advanced nations tracked by the Organization for Economic Cooperation and Development.

#22 Since the Federal Reserve was created in 1913, the U.S. dollar has lost over 95 percent of its purchasing power.

#23 U.S. government spending as a percentage of GDP is now up to approximately 36 percent.

#24 The Congressional Budget Office is projecting that U.S. government public debt will hit 716 percent of GDP by the year 2080.

Please share these statistics with as many family members and friends as you can.  It is time to get real.  It is time to admit that we have some really big problems.

America is in decline and the situation is getting worse by the day.  If we are not willing to admit how bad things really are, then we are never even going to have a chance to find the solutions that we need.

30 Statistics That Prove The Elite Are Getting Richer, The Poor Are Getting Poorer And The Middle Class Is Being Destroyed

Not everyone has been doing badly during the economic turmoil of the last few years.  In fact, there are some Americans that are doing really, really well.  While the vast majority of us struggle, there is one small segment of society that is seemingly doing better than ever.  This was reflected in a recent article on CNBC in which it was noted that companies that cater to average Americans are doing rather poorly right now while companies that market luxury goods and services are generally performing exceptionally well.  So why aren’t all American consumers jumping on the spending bandwagon?  Well, it seems that there are a large number of Americans who either can’t spend a lot of money right now or who are very hesitant to.  A stunningly high number of Americans are still unemployed, and for many other Americans, there is a very real fear that hard economic times will return soon.  On the other hand, there is a significant percentage of Americans who are blowing money on luxury goods and services as if the economy has fully turned around and it is time to let the good times roll.  So exactly what in the world is going on here?

Well, in 2010 life is very, very different depending on whether you are a “have” or a “have not”.  The recent article on CNBC referenced above described it this way….

Consumer spending in the U.S. has turned into a tale of two cities in 2010, with an entire segment of consumers splurging confidently on the finer things in life, while another segment, concerned about unemployment and with little or no discretionary income, spends only on bare necessities.

So why is this happening?

It is happening because the rich are getting richer and they have plenty of money to buy stuff and the poor are getting poorer and have less money to spend than ever.

In case you haven’t been paying attention over the past couple of decades, what we have in America today is a system that is designed to funnel as much wealth into the hands of the elite as possible.

This isn’t capitalism that we have in America in 2010.  Instead, what we have created is a system where the laws are set up so that the power elite and their big, dominant corporations always win. 

Why do you think so many of America’s largest corporations pay so little in taxes? 

Why do you think so many of them are showered with government subsidies, tax breaks and bailouts?

It’s not about competition anymore.

It’s about rigging the game in your favor.

The power elite and the giant corporations they control spend millions and millions on lobbying and campaign contributions and they expect a big return on that investment.

Let’s take a look at one example.  Many people think that Barack Obama and the Democrats are supposed to be anti-business, right?

Well then why are some of Barack Obama’s biggest donors the very same corporations that are receiving giant bailouts, making record profits and paying their employees billions in bonuses?

Goldman Sachs was Barack Obama’s second biggest donor.  Microsoft was number four.  Citigroup was number six.  JPMorgan Chase was number seven.  Time Warner was number eight.

Are you starting to get the picture?

Every single year, the U.S. Congress passes law after law after law that makes it easier for big corporations to dominate and makes it easier for the rich to get even richer.

America’s economy is not about competition anymore.

It is about eliminating competition.

And unfortunately for middle class Americans, the giant predator corporations that now dominate our economy are realizing that they don’t really need nearly as many American workers anymore.

Instead, they are slowly but surely shipping our jobs off to the other side of the world where workers are willing to work for about a tenth as much.

And yet we still run out to the “big box” stores and fill up our carts with a bunch of plastic crap made on the other side of the world by these giant corporations.

Meanwhile, those giant corporations are taking the profits they make out of our communities and they are taking our jobs and are shipping them overseas.

So in the final analysis, is it any wonder why the income inequality gap is growing?

Without small businesses having a legitimate chance to compete and without good jobs for American workers, the middle class in America is going to continue to get chewed up and spit out.

The following are 30 statistics that prove that the elite are getting richer, the poor are getting poorer and the middle class is being destroyed in 2010….

The Rich Are Getting Richer

1 – As of 2007, the top 1 percent of all Americans was taking home 24 percent of the national income.  This was a level that had not been seen since the days of the Great Depression.

2 – Incomes have been growing in the United States, but those at the very top of the pyramid have been gobbling up almost all of the income growth.  According to Harvard Magazine, 66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.

3 – Even official government figures bear out the fact that the rich are getting richer.  An analysis of income-tax data by the Congressional Budget Office a few years ago found that the top 1% of all American households own nearly twice as much of the corporate wealth as they did just 15 years ago.

4– Most Americans have suffered during the last few years, but not the boys and girls down on Wall Street.  New York state Comptroller Thomas DiNapoli says that Wall Street bonuses for 2009 were up 17 percent when compared with 2008.

5 – Even as the number of Americans living in poverty skyrockets, the number of millionaires just keeps growing.  In fact, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million during 2009.

6 – The amount of money some of these Wall Street hotshots are making is incredible.  Back in 2005, the top 25 hedge fund managers earned a total of 9 billion dollars.  That would be bad enough, but even in these hard economic times the rich just keep getting richer.  One year after the recent financial collapse the top 25 hedge fund managers earned a total of approximately $25 billion.  That breaks down to an average of $1 billion each.  The truth is that the United States has been experiencing uneven prosperity for quite some time and things just seem to get worse with each passing year.

The Poor Are Getting Poorer

7 – Government anti-poverty programs are exploding in size in response to the recent economic difficulties.  USA Today is reporting that a record one in six Americans are now being served by at least one government anti-poverty program.

8 – Over 50 million Americans are on now Medicaid.  That figure is up more than 17 percent since the beginning of the recession.

9 – The number of Americans in the food stamp program rose to a new all-time record of 40.8 million in May.  That number is up almost 50 percent since the beginning of the recession.

10 – The number of Americans who cannot afford even the basic necessities is absolutely staggering.  A whopping 50 million Americans could not afford to buy enough food in order to stay healthy at some point over the last year.

11 – Compared to other industrialized nations, the United States is doing very poorly.  The U.S. poverty rate is now the third worst among the developed nations tracked by the Organization for Economic Cooperation and Development.

12 – The saddest part of this is what we are doing to our children.  According to one recent study, approximately 21 percent of all children in the United States are living below the poverty line in 2010. 

13 – But the American people cannot provide for their families if they don’t have jobs.  Today there are not nearly enough jobs for everyone.  In 2010, it takes the average unemployed American worker over 8 months to find a job.

14 – Approximately 10 million Americans are currently receiving unemployment insurance, which is a number that is nearly four times higher than what it was at back in 2007.

15 – The truth is that we are creating a permanent underclass of Americans that cannot get jobs.  The number of Americans receiving long-term unemployment benefits has increased over 60 percent in just the past year.

16 – Increasingly, the wealth of the United States is being held in fewer and fewer hands.  One study found that as of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.

17 – It is not a good time to be living in “the bottom half” in America.  The size of “the pie” being divided up among those at the low end of the wage scale is becoming really, really small.  In fact, the bottom 40 percent of all income earners in the United States now collectively own less than 1 percent of the nation’s wealth.

The Middle Class Is Being Destroyed

18 – Even those Americans that still do have decent jobs are seeing their wealth fade rapidly.  For example, U.S. families have $6 trillion less in housing wealth than they did just three years ago.

19 – Home ownership used to be a sign that one had arrived in the middle class, but in 2010 an increasing number of Americans are finding out that they simply can’t afford their homes anymore.  One out of every seven mortgages were either delinquent or in foreclosure during the first quarter of 2010.

20 – The reality is that incomes have just not kept up with housing costs.  This has put an incredible amount of pressure on the middle class.  Just how much pressure?  Well, only the top 5 percent of all U.S. households have earned enough additional income to match the rise in housing costs since 1975.

21 – The debt binge middle class Americans have been on over the past couple of decades has drained many of them completely dry, and now more Americans than ever have bad credit scores.  Over 25 percent of Americans now have a credit score below 599, which means that they are a very bad credit risk.

22 – A rapidly rising number of Americans are actually choosing bankruptcy as a way out of their financial problems.  Nationwide, bankruptcy filings rose 20 percent in the 12 month period ending this past June 30th.

23 – The middle class manufacturing jobs that once defined so many American cities are rapidly disappearing.  Despite the fact that the U.S. population has dramatically increased, less Americans are employed in manufacturing today than in 1950.

24 – These days it seems like almost everyone is looking for a good job, but very few people are finding them.  According to one recent survey, 28% of all U.S. households have at least one member that is looking for a full-time job.

25 – Even many of those Americans that still have decent jobs have been hit hard by this economic downturn.  A recent Pew Research survey found that 55 percent of the U.S. labor force has experienced either unemployment, a pay decrease, a reduction in hours or an involuntary move to part-time work since the recession began.

26 – The number of jobs that are evaporating is absolutely stunning.  According to one analysis, the United States has lost a total of 10.5 million jobs since 2007.

27 – So where are the jobs going?  It doesn’t take a genius to figure it out.  China’s trade surplus (much of it with the United States) climbed 140 percent in June compared to a year earlier.

28 – The truth is that “globalism” and “free trade” have put middle class American workers in direct competition with the cheapest labor in the world.  This is what middle class American workers must now compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.

29 – Due to these difficult economic conditions, the middle class is being squeezed as never before.  According to a poll taken in 2009, 61 percent of Americans “always or usually” live paycheck to paycheck.  That was up significantly from 49 percent in 2008 and 43 percent in 2007.

30 – So what kind of future do our young people have in front of them?  Unfortunately, things don’t look pretty.  Many fresh college graduates can’t even get a job that will allow them to be independent.  One recent survey of last year’s college graduates discovered that 80 percent moved right back home with their parents after graduation.  That was up significantly from 63 percent in 2006.

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