U.S. Economy

14 Eye Opening Statistics Which Reveal Just How Dramatically The U.S. Economy Has Collapsed Since 2007

Most Americans have become so accustomed to the “new normal” of continual economic decline that they don’t even remember how good things were just a few short years ago.  Back in 2007, unemployment was very low, good jobs were much easier to get, far fewer Americans were living in poverty or enrolled in welfare programs and government finances were in much better shape.  Of course most of this prosperity was fueled by massive amounts of debt, but at least times were better.  Unfortunately, things have really deteriorated over the last several years.  Since 2007, unemployment has skyrocketed, foreclosures have set new all-time records, personal bankruptcies have soared and U.S. government debt has gotten completely and totally out of control.  Poll after poll has shown that Americans are now far less optimistic about the future than they were in 2007.  It is almost as if the past few years have literally sucked the hope out of millions upon millions of Americans.

Sadly, our economic situation is continually getting worse.  Every month the United States loses more factories.  Every month the United States loses more jobs.  Every month the collective wealth of U.S. citizens continues to decline.  Every month the federal government goes into even more debt.  Every month state and local governments go into even more debt.

Unfortunately, things are going to get even worse in the years ahead.  Right now we look back on 2005, 2006 and 2007 as “good times”, but in a few years we will look back on 2010 and 2011 as “good times”.

We are in the midst of a long-term economic decline, and the very bad economic choices that we have been making as a nation for decades are now starting to really catch up with us.

So as horrible as you may think that things are now, just keep in mind that things are going to continue to deteriorate in the years ahead.

But for the moment, let us remember how far we have fallen over the past few years.  The following are 14 eye opening statistics which reveal just how dramatically the U.S. economy has collapsed since 2007….

#1 In November 2007, the official U.S. unemployment rate was just 4.7 percent.  Today, the official U.S. unemployment rate is 9.4 percent.

#2 In November 2007, 18.8% of unemployed Americans had been out of work for 27 weeks or longer.  Today that percentage is up to 41.9%.

#3 As 2007 began, there were just over 1 million Americans that had been unemployed for half a year or longer.  Today, there are over 6 million Americans that have been unemployed for half a year or longer.

#4 Nearly 10 million Americans now receive unemployment insurance, which is almost four times as many as were receiving it back in 2007.

#5 More than half of the U.S. labor force (55 percent) has “suffered a spell of unemployment, a cut in pay, a reduction in hours or have become involuntary part-time workers” since the “recession” began in December 2007.

#6 According to one analysis, the United States has lost a total of approximately 10.5 million jobs since 2007.

#7 As 2007 began, only 26 million Americans were on food stamps.  Today, an all-time record of 43.2 million Americans are enrolled in the food stamp program.

#8 In 2007, the U.S. government held a total of $725 billion in mortgage debt.  As of the middle of 2010, the U.S. government held a total of $5.148 trillion in mortgage debt.

#9 In the year prior to the “official” beginning of the most recent recession in 2007, the IRS filed just 684,000 tax liens against U.S. taxpayers.  During 2010, the IRS filed over a million tax liens against U.S. taxpayers.

#10 From the year 2000 through the year 2007, there were 27 bank failures in the United States.  From 2008 through 2010, there were 314 bank failures in the United States.

#11 According to the U.S. Department of Housing and Urban Development, the number of U.S. families with children living in homeless shelters increased from 131,000 to 170,000 between 2007 and 2009.

#12 In 2007, one poll found that 43 percent of Americans were living “paycheck to paycheck”.  Sadly, according to a survey released very close to the end of 2010, approximately 55 percent of all Americans are now living paycheck to paycheck.

#13 In 2007, the “official” federal budget deficit was just 161 billion dollars.  In 2010, the “official” federal budget deficit was approximately 1.3 trillion dollars.

#14 As 2007 began, the U.S. national debt was just under 8.7 trillion dollars.  Today, the U.S. national debt has just surpassed 14 trillion dollars and it continues to soar into the stratosphere.

So is there any hope that we can turn all of this around?

Unfortunately, the massive amount of debt that we have piled up as a society over the last several decades has made that impossible.

If you add up all forms of debt (government debt, business debt, individual debt), it comes to approximately 360 percent of GDP.  It is the biggest debt bubble in the history of the world.

If the federal government and our state governments stop borrowing and spending so much money, our economy would collapse.  But if they keep borrowing and spending so much money they will continually make the eventual economic collapse even worse.

We are in the terminal stages of the most horrific debt spiral the world has ever seen, and when the debt spiral gets stopped the house of cards is going to finally come down for good.

So enjoy these times while you still have them.  Yes, today is not nearly as prosperous as 2007 was, but today is most definitely a whole lot better than 2015 or 2020 is going to be.

Sadly, we could have avoided this financial disaster completely if only we had listened more carefully to those that founded this nation.  Once upon a time, Thomas Jefferson said the following….

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.

The Real Horror Story: The U.S. Economic Meltdown

This October, millions of Americans are going to watch horror movies and read horror stories because they enjoy being frightened.  Well, if you really want to be scared, you should just check out the real horror story unfolding right before our eyes – the U.S. economic meltdown.  It seems like more bad news for the U.S. economy comes out almost every single day now.  Unfortunately, things are about to get a whole lot worse.  The mainstream media has been treating “Foreclosuregate” as if it is a minor nuisance, but the truth is that the lid is about to be publicly lifted on years and years of massive fraud in the U.S. mortgage industry, and this thing has the potential to cause economic chaos that is absolutely unprecedented.  Over the past several days, expert after expert has been coming forward and warning that this crisis could completely and totally paralyze the mortgage industry in the United States.  If that happens, it will be essentially like pulling the plug on the U.S. economic recovery. 

Not that there was going to be a recovery anyway.  The truth is that economic statistic after economic statistic has been pointing to incredible trouble for the U.S. economy.

For example, the U.S. government just announced that the U.S. trade deficit went up again in August.  According to the U.S. Census Bureau, the U.S. trade deficit was $46.3 billion during August, which was up significantly from $42.6 billion in July.

So how much coverage did this get in the mainstream media? 

Well, just about none.

We have gotten so used to horrific trade deficits that it isn’t even news anymore.

But these trade deficits are absolutely killing our economy.

How long do you think that the U.S. economy can keep shelling out 40 or 50 billion more dollars than we take in every single month?

If you look at the countries around the world that have become very wealthy, almost all of them have gotten that way by trading with the United States.

Meanwhile, many of our once great manufacturing cities are turning into open sewers.

Every single politician in the United States should be talking about the trade deficit.

But hardly any of them are.

Is it because Americans have all become so dumbed-down that we don’t understand these things anymore, or is it because we are so distracted by the various forms of entertainment that we are addicted to that we just don’t care? 

But the trade deficit is not the only economic statistic that is getting worse.

According to the Department of Labor, for the week ending October 9th the advance figure for seasonally adjusted initial jobless claims was 462,000, which represented an increase of 13,000 from the previous week.

We have an unemployment epidemic going on in this country, but what did the mainstream media do in response to this news?

They yawned.  Instead, many of the “financial experts” were busy talking about how wonderful it is that the Stock Market is going up, up, up.

Well, as one reader recently reminded me, if you want to evaluate an economy by how much the stock market is going up, then the economy of Zimbabwe has had an absolutely wonderful decade!

The truth is that the stock market is not a good barometer for what is actually going on.

What is really happening is that the U.S. economic system is literally coming apart at the seams. 

Yet another piece of really bad economic news that just came out is that the number of home repossessions by banks set a new all-time record during the month of September.  The record total of 102,134 bank repossessions was the first time ever that bank repossessions climbed over the 100,000 mark for a single month.

The good news is that bank repossessions are about to come to a screeching halt.

The bad news is that it is because the U.S. mortgage industry is about to become completely and totally paralyzed by this foreclosure fraud crisis.

The following are three basic points to remember about this foreclosure mess….

A) Massive Fraud Was Committed At Every Stage By The Mortgage Industry

In a previous article entitled “Foreclosure Fraud: 6 Things You Need To Know About The Crisis That Could Potentially Rip The U.S. Economy To Shreds“, I attempted to describe just how widespread the fraud in the mortgage industry has been….

The truth is that there was fraud going on in every segment of the mortgage industry over the past decade.  Predatory lending institutions were aggressively signing consumers up for mortgages that they knew they could never repay.  Many consumers were also committing fraud because a lot of them also knew that they could never possibly repay the mortgages.  These bad mortgages were fraudulently bundled up and securitized, and these securitized financial instruments were fraudulently marketed as solid investments.  Those who certified that these junk securities were “AAA rated” also committed fraud.  Then these securities were traded at lightning speed all over the globe and a ton of mortgage paperwork became “lost” or “missing”.

Finally, when it came time to foreclose on these bad mortgages, a whole lot more fraud was committed.  Thousands upon thousands of foreclosure documents were “robo-signed”, but the truth is that investigators are starting to discover a lot of things about these mortgages that are a lot worse than that. 

B) Nobody Really Knows Who Owns Or Who Has The Right To Foreclose On Millions Upon Millions Of Mortgages

The legal rights to millions of U.S. mortgages has been scrambled so badly that it might actually be impossible to fully sort this mess out.  In particular, MERS (Mortgage Electronic Registration Systems) has created a paperwork nightmare that may never be able to be completely remediated. 

On a previous article, a reader named William left a comment that did a great job of describing the very serious problem that we are now facing because of MERS….

MERS – potentially the most serious problem because it affects who really owns the loans. Securitization mandates that loans be transferred into REMIC trusts within a strict timeframe. Late transfers are not allowed. In spite of the supposed “ease” of transfer through MERS, it now appears that perhaps 60% of US loans were never properly transferred. Absent remedial legislation, it is impossible to do so now. And the former owners may be out of business or bankrupt. So how do we get these loans to the trust beneficiaries who were supposed to own them? This is no simple paperwork correction. The train has left the station, with no more to follow.

C) Unprecedented Chaos Is Going To Erupt As Faith In The Mortgage System Completely Dies

So what is going to happen as a result of all of this fraud and confusion in the mortgage industry?  Well, basically everybody is going to sue everybody.  It is going to be absolute mayhem. 

Charles Hugh Smith recently put it this way….

Real estate attorneys can rejoice: everyone will get sued, in every court in the land. Banks will get sued, title insurance companies will get sued, realtors will get sued, foreclosure mills will get sued, MERS will get sued, and so on. The attorneys general of the states will all sue the banks and mortgage mills, claiming billions in damages.

Meanwhile, virtually nobody will want to buy any house that has been foreclosed on in the past ten years or so until this mess is sorted out (which could take years and years). 

Meanwhile, title insurance companies are going to avoid foreclosures like the plague.

Meanwhile, all of the investors that have been propping up the housing market by buying foreclosures are going to be fleeing the market in droves.

Meanwhile, the financial world is going to be trying to figure out which U.S. lending institutions are still solvent.  The value of most mortgage-based assets is now totally up in the air.

Meanwhile, millions more homeowners across the United States will be emboldened to quit making payments on their mortgages as they realize that those holding their mortgages may not have the legal right to foreclose on them.

And that is where the true horror of this entire situation may lie.  What is going to happen if millions upon millions of Americans holding underwater mortgages look at this situation and decide that they really don’t have to be afraid of the threat of foreclosure any longer?

If a massive wave of homeowners suddenly decides to simply quit paying their mortgages, it would basically wipe out nearly the entire mortgage industry.

That would likely mean more government bailouts, more government control, much higher mortgage rates and eventually a serious crash in housing prices.

This crisis is incredibly complicated and it has a ton of moving parts, so it is extremely difficult to describe accurately.  But the reality is that this mess has the potential to hurt the U.S. real estate market much more than “subprime mortgages” ever did.

Hopefully this crisis will not be “the straw that broke the camel’s back” for the U.S. economy, but with each passing day this thing looks even more horrifying. 

One way or another, real estate law in the United State is going to be changed forever as a result of this crisis.  It is going to be extremely interesting to see how all of this plays out.

S. 510: 12 Reasons Why The Food Safety Bill From Hell Could Be Very Dangerous For The U.S. Economy

As you read this, there is a bill before the U.S. Senate that has the potential to change the U.S. food industry more than any other law ever passed by the U.S. Congress. In the name of “food safety”, the U.S. government would be given an iron grip over the production, transportation and sale of all food in the United States. Hordes of small food producers and organic farmers could potentially be put out of business.  If this bill becomes law, the freedom to grow what you want, eat what you want and to share food from your gardens with your neighbors could be greatly curtailed.  It would give the FDA unprecedented discretion to regulate U.S. food production.  A version of this bill was already passed by the U.S. House of Representatives last summer, and now S. 510, also know as the FDA Food Safety Modernization Act, is in front of the U.S. Senate and it is expected to pass easily.

Because of how vaguely it is written and because of how much discretion it gives to the FDA, it is potentially a very, very dangerous law.

So who is actually in favor of it?

Well, big food corporations and big agriculture are actually very much in favor of this bill.

Why?

Is it because they are so concerned about food safety?

No.

In fact, virtually every major case of food contamination in recent U.S. history has come from large-scale industrial agriculture or large-scale industrial food production.

The real reason why they are backing S. 510 is because it will devastate their primary competition – small food producers and organic farmers.

In recent years, the demand for organic food has skyrocketed as the American people have learned the truth about how our food is actually made.  Big agriculture and the giant food producers are losing profits as Americans increasingly vote with their wallets.

So now the food giants are using “food safety” as a way to get market share back.  It is an open secret that many of those involved in drafting this bill and in pushing it through Congress have ties to food industry giants.

Thousands of small food producers and organic farmers will have their very existence threatened by this bill.  It imposes a bureaucratic nightmare on all food producers that the big corporations will be able to handle easily but that will cripple much smaller operations.

Already, many farmers can see the writing on the wall.  One small farmer recently described the mood among her fellow small farmers to the Wall Street Journal….

“I know people who have been small farmers for 25 to 30 years who are looking to get out of the business because food safety is becoming so alarmist.”

But the bureaucratic nightmare is just the tip of the iceberg.  To get an idea of just how dangerous S. 510 could potentially be to the already staggering U.S. economy, just check out the following quote from one opponent of this bill….

“If accepted [S 510] would preclude the public’s right to grow, own, trade, transport, share, feed and eat each and every food that nature makes. It will become the most offensive authority against the cultivation, trade and consumption of food and agricultural products of one’s choice. It will be unconstitutional and contrary to natural law or, if you like, the will of God.”

-Dr. Shiv Chopra, Canada Health whistle blower

It would be hard to understate how dangerous this bill potentially could be.  This bill gives the FDA the ability to exercise a ton of discretion.  The FDA could end up exercising that discretion in a very reasonable way, or they could use it to shut down small food producers left and right.

When it comes to S. 510, the question that you need to ask yourself is this….

Do you trust the FDA?

If not, then there are some very real reasons for you to be concerned.

The following are 12 reasons why S. 510 could be absolutely disastrous for small food producers and for the U.S. economy…. 

#1 All food production facilities in the United States will be required to register with the U.S. government.   No food will be allowed to be grown, distributed or sold outside this bureaucratic framework unless the FDA allows it.

#2 Any food that is distributed or sold outside of U.S. government control will be considered illegal smuggling.

#3 The FDA will hire an army of new inspectors to enforce all of the new provisions in the bill.

#4 The FDA will be mandated to conduct much more frequent inspections of food processing facilities.   

#5 The fees and paperwork requirements will be ruinously expensive for small food producers and organic farms.

#6 S. 510 would place all U.S. food and all U.S. farms under the Department of Homeland Security in the event of a major “contamination” or an “emergency”.  What exactly would constitute a “contamination” or an “emergency” is anyone’s guess.

#7 S. 510 mandates that the FDA facilitate harmonization of American food laws with Codex Alimentarius.

#8 S. 510 imposes an annual registration fee on any facility that holds, processes, or manufactures food.  It also includes draconian fines for paperwork infractions of up to $500,000 for a single offense.  Just one penalty like that would drive a small food producer out of business.

#9 S. 510 would give the FDA tremendous discretion to regulate how crops are grown and how food is produced in the United States.  Basically, small farmers and organic farmers will now be forced to farm exactly how the federal government tells them to.  It is feared that the U.S. government would soon declare that many organic farming methods are “unsafe” and would outlaw them.  In addition, there is the very real possibility that at some point the U.S. government could decide that the only “safe” seed for a particular crop is genetically modified seed and would require all farmers to use it.

#10 S. 510 will give the FDA the power to impose a quarantine on a specific geographic area.  Basically the FDA would have the power to stop the movement of all food in an area where a “contamination” has been identified.  This would be very close to being able to declare martial law.

#11 S. 510 will give the FDA the power to conduct warrantless searches of the business records of small food producers and organic farmers, even if there has been no evidence at all that a law has been broken. 

#12 Opponents of S. 510 believe that it would eliminate the right to clean and store seed.  Therefore, control of the U.S. seed supply would be further centralized in the hands of Monsanto and other multinational corporations.

As mentioned above, this bill gives the FDA a ton of discretion.  It is written very broadly and very vaguely.  It opens the door for all kinds of abuses, but that doesn’t mean that the FDA will behave unreasonably.

So should we trust the FDA?

Is there a viable future for small food producers and organic farmers in America?

Or is the handwriting already on the wall? 

“If people let the government decide what foods they eat and what medicines they take, their bodies will soon be in as sorry a state as are the souls of those who live under tyranny.”

-Thomas Jefferson

The U.S. Economy Is A Dead Horse And The American People Are Starting To Get Really Pissed Off And Frustrated

The economic frustration of the American people is reaching a fever pitch.  Millions of Americans can’t seem to get a good job no matter what they do.  Millions of others are working as hard as they can but find that they keep coming up short at the end of the month.  Record numbers of Americans are still going bankrupt.  Record numbers of Americans are still losing their homes.  Meanwhile, the U.S. economy is a dead horse at this point.  It just doesn’t have any more to give.  At this point the U.S. economy is like an aging rock star that requires larger and larger doses of drugs each night just to be able to perform.  The U.S. economy is addicted to “drugs” such as debt and government stimulus, and years ago those things really supercharged the U.S. economic system, but at this point they aren’t provoking much of a response at all.  In fact, the things that once “stimulated” the economy are now slowly killing it.  But the vast majority of the American people do not understand this.  All they know is that the economy is broken and they want someone to “fix” it.

For most Americans, all we have ever known is tremendous prosperity.  All our lives we have been taught that America is the richest and most prosperous nation on the planet, and that while there will always be times of “recession”, things will always bounce back and be better than ever before.

But this time things aren’t bouncing back.

And Americans are starting to become extremely frustrated.   

A couple of quotes that appeared in a recent article in The New York Daily News really embodied the growing frustration that so many are feeling at this point….

“My husband and I are fortunate to be able to move in with my 81-year-old mother-in-law. But how sad is that? I apply for jobs and nothing happens,” writes Gayle Hanson. “Who wants to hire a 59-year-old woman? My answer is nobody. [I] have years of experience, excellent references. And nothing to show for it.”

“I am soon to be 57 and considered too old, too expensive, etc. I can’t get an employer to hire me at any salary,” writes Mike Stiller. “I am BOILING MAD.”

But Gayle Hanson and Mike Stiller are far from alone.

Millions upon millions of Americans are “boiling mad” about the economy at this point.

The truth is that the United States has lost 10.5 million jobs since 2007.  Many of those jobs have been shipped off to countries like China and India where labor is much cheaper and they are never coming back.

There just are not enough jobs for everyone in America at this point.  The number of “chronically unemployed” has been rising at a frightening pace.  In fact, the average duration of unemployment in the United States has risen to an all-time high. 

If you have never been unemployed and unable to find a job, then you just don’t know how soul crushing it can be.  This is especially true when you have a family to support.

Right now, there are 9.2 million Americans that are unemployed but are not even receiving an unemployment insurance check.  It is easy to tell those unemployed workers that they should “get a job”, but as the chart below shows, the gap between the number of unemployed workers and the number of job openings has increased dramatically over the last couple of years….

But in this economy, even many of those who do have jobs are still struggling mightily.  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.

And Americans are still losing their homes in record numbers.  Banks repossessed an average of 4,000 south Florida properties a month in the first half of 2010, which was up 83 percent from the first half of 2009.

Meanwhile, demand for homes is dropping through the floor.  The Mortgage Bankers Association announced on Wednesday that demand for loans to purchase U.S. homes sunk to a 13 year low last week, and refinancing demand also plummeted despite near record-low mortgage rates.

So considering all of these statistics, is it any wonder why so many Americans are so pessimistic?

According to a recent poll conducted by Bloomberg, 71% of Americans say that it still feels like the economy is in a recession.

But the truth is that we haven’t seen anything yet.

Things are going to get much worse.

Already, Federal Reserve policymakers are discussing what steps they might take to stimulate economic activity “if the outlook were to worsen appreciably”.

So can more economic stimulus help?

To a limited extent.

The Federal Reserve and the U.S. government will likely try to inject more debt and more “economic stimulus” into the system to try to shock the economy back to life.

But the more debt the U.S. government takes on the worse our long-term problems are going to get. 

The reality is that the U.S. economic system is broken, and there is simply not any “quick fix” that is available that is going to get things back to normal.

So on an individual level, what should we all do?

Well, we all need to start becoming a lot less dependent on the system.

We should all consider how we can start our own businesses, grow our own food and trade within our own communities.

If the entire system is starting to break down, it is those who are the least dependent on the system that will have the best chance to prosper during the times ahead.

So what do you think?  Do you agree?  Do you disagree?  Feel free to leave a comment with your thoughts below….

Economic Problems?

With each passing news cycle, it seems like the economic headlines just keep getting worse.  And unfortunately, the highly integrated global economy that we have constructed means that what happens on one side of the world is going to very likely have a big impact on the other side of the world.  A meltdown in New York or Los Angeles is going to affect London, Paris, Rome, Berlin, Moscow, Beijing and Tokyo.  That is just the way the world works now.  Back in 2007 and 2008, the financial crisis that began in the United States devastated economies across the globe.  So are there any economic problems brewing out there right now that could send another wave of panic across the globe?

Well, yes, actually there are a whole bunch of them.  In fact, if certain things break the wrong way it could create a gigantic mess in the financial world.  Let’s take a few moments to examine a few of the questions that economists are asking right now….

Will The Eurozone Break Up And Devastate The Global Economy?

One of the most respected financial journalists in the world, Ambrose Evans-Pritchard, is warning that cases currently making their way through the German court system could actually result in the breakup of Europe’s monetary union.  The cases involve the massive EU bailouts that have been agreed to recently.  It is being argued that these bailouts actually violate EU treaty law, and therefore they also violate Germany’s supreme and sovereign Basic Law.

So what would happen if the German courts rule against these bailouts?

Well, it could be catastrophic.  Ambrose Evans-Pritchard put it this way in his recent column…. 

“Should they succeed, of course, the eurozone risks disintegration within days, and perhaps hours.”

And he is not the only one sounding the alarm.  In fact, one major Dutch bank is warning that a full-fledged disintegration of the eurozone would trigger the worst economic crisis in modern history and would unleash a deflationary shockwave that would envelop the entire globe including the United States.

That doesn’t sound promising, does it?

So is it going to happen?

No, probably not.

It would be a great, great victory for national sovereignty if it did happen, but there are just way too many powerful interests that are way too invested in seeing the eurozone succeed.  In addition, the legal, economic and political obstacles that would have to be overcome to fully break apart the eurozone are absolutely mind-numbing when you start thinking about them all.

Instead, what we are likely to see are calls for even more European integration.  Already, many politicians are claiming that the current crisis has been caused because Europe is simply not integrated enough.

So, no, the eurozone is not likely to break up, but that doesn’t mean that we are not going to see massive economic problems in Europe over the coming years.

Will The U.S. Congress Extend Long-Term Unemployment Benefits?

The U.S. Congress continues to debate whether or not they are going to extend long-term unemployment benefits for an estimated 2.1 million unemployed Americans that have stopped getting unemployment checks.

So will they end up getting it done?

Probably.

But there are a growing number of lawmakers that are extremely alarmed about how incredibly fast the U.S. debt is growing.

It is a shame that many of them were not concerned about it 12 or 13 trillion dollars ago.

Not that we shouldn’t help the millions of American workers that have been out of work for a long time and can’t get jobs.

A lot of people are really, really suffering out there right now.

So where did all the jobs go?

Well, as we detailed in a previous article, our politicians and our big American corporations have been busy shipping them off to China and to a whole host of third world nations over the past couple of decades.

The millions upon millions of jobs that have been lost are gone permanently and are not coming back.

So we are likely to continue to have a growing underclass of chronically unemployed blue collar workers that don’t have jobs and can’t get jobs because there are not nearly enough of them for everyone.

So, yes, Congress is likely to extend the unemployment benefits soon, but what those millions of Americans really need are good jobs.

Will The World Trade Imbalance Continue To Get Worse?

It was recently announced that China’s trade surplus climbed 140 percent in June compared to a year earlier.

At least globalism is working well for somebody.

The truth is that someday people will look back and think that U.S. leadership must have been insane when they allowed the greatest economic machine to ever be assembled to systematically be dismantled and shipped off to China, India and dozens of other third world countries around the globe.

The other side of this tragedy is the tremendous exploitation of third world populations which we are allowing big global corporations to get away with.

In one of his recent articles, Stephen Lendman told the tragic story of sweatshop worker Naran Dhula Bhil…. 

In February 2009, he was hospitalized at Dharmaj, in Gujarat state, coughing, very weak, struggling to walk, and unable to lift anything heavier than five pounds. Since mid-2008, he lost almost half his body weight, dropping from 132 to 70 pounds of skin and bones. On April 14, he died of silicosis, the result of greed, indifference, and consumer ignorance about buying “gemstones of death.”

Bhil was 11 when he began working as a grinder, shaper, and polisher, making gemstones into hearts, pendants, rings, beads, and various type ornaments.

For a day’s work, he produced 100 – 150 for 15.5 cents an hour, $1.08 daily, or less than a penny for each stone produced, each giving off silica dust that killed him. By age 20, he knew it, stayed on the job, borrowed money to buy gemstones, and became “bonded,” meaning he couldn’t quit until out of debt, what few grinders ever do.

Bihl said his shop employed 35. Only four or five are left, the others sick or dead. “So many have died,” he said, and when he expired “he did not have a single penny to his name,” as true for most others.

Could you imagine if that was your life story?

What big global corporations are getting away with is absolutely mind blowing.

The global economic system is broken and the only ones who seem to really be benefiting from it are the giant corporations and the ultra-rich.

Is this going to change any time soon?

No, unfortunately, it will not.

Will Americans Continue to Be Obsessed With Money?

According to a new poll of Americans between the ages of 44 and 75, 61% said that running out money was their biggest fear. The remaining 39% thought death was scarier.

Running out of money scarier than death?

Yes, it is very important to provide for ourselves and for our families, especially as we head towards economic collapse, but the obsession that the American people have with money and wealth is completely and totally out of control.

At the end of your life, do you want your life to be defined by the pile of stuff that you have accumulated or by what you were able to do with your life?

The truth is that we don’t even actually “own” most of what we think that we own.

There is so much more to life than getting stuff and having stuff, but the mainstream media will continue to push Americans to love the “consumer culture” which has come to dominate our way of life.

So, yes, Americans will continue to be obsessed with wealth, money and with who LeBron James is playing basketball for. 

But you can make a different choice.  You can choose to live your life for what really matters.

Is The U.S. Economy Going To Turn Around As We Approach The Christmas Season And The End Of The Year?

Many analysts are hoping that as the holidays approach the American people will get back to their old ways of spending massive amounts of money and that this will help jumpstart the U.S. economy.

So is there reason for optimism?

Well, no.

Vacancies and lease rates at U.S. shopping centers continued to get even worse during the second quarter of 2010.  In fact, in some of the most depressed areas of the United States, many malls and shopping centers could end up looking like ghost towns by the time Christmas rolls around. 

So what are some of the areas in the U.S. that are the worst economic disaster zones?

Well, everyone knows about Detroit.  Once regarded as one of the crown jewels of American industry, Detroit is now a rusted-out war zone that is a shell of its former self.

South of there, the state of Illinois has now become a complete and total disaster zone.  The government of Illinois has stopped paying even its most essential bills and it now ranks eighth in the world in possible bond-holder default.  Universities and government agencies are experiencing absolute chaos as they try to figure out how they are going to continue to function without any money.

Of course then there is California, where the Schwarzenegger administration has won an appellate court ruling saying it has the authority to impose the federal minimum wage of $7.25 an hour on more than 200,000 state workers as California wrestles with its latest budget crisis.  Things are now so bad in California that in the region around the state capital, Sacramento, there is now one closed business for every six that are still open.

Next door to California, in Nevada, things may be even worse.  Official unemployment in Nevada is hovering around 14 percent (unofficially it is much higher of course) and it is estimated that a whopping 65 percent of all homes in the state of Nevada are underwater.  There is perhaps no state in the U.S. that has been hurt more seriously by the housing crash than Nevada.

Unfortunately, things look like they are going to get even tighter for state and local governments in the year ahead.  Economist Mark Zandi is warning that up to 400,000 state and local government workers could lose their jobs in the next year as states, counties and cities grapple with lower revenue and less federal funding.

On top of all this, there is the threat that the Gulf of Mexico oil spill could push the teetering U.S. economy completely over the edge.

Many cities along the Gulf of Mexico coast were already economic disaster zones even before this oil spill.   

But now we are talking about an economic nightmare of unprecedented proportions.

The seafood, tourism and real estate industries along the Gulf coast have been decimated and people are leaving in droves.  It could be years, or even decades, before things get back to some kind of “normal” in the area.

Some are even warning that this oil spill could cause the collapse of BP, and if that happens it could bring about absolute chaos on world financial markets.

Why?

Well, it turns out that BP is a major source of global liquidity and is a major player in the worldwide derivatives market.

If someday the worldwide derivatives market crashes, there won’t be enough money in the entire world to fix that problem.

But that is a topic for another day….

No Jobs

Everyone knows that the United States is bleeding jobs.  According to one new study, the private sector in the United States has lost 10.5 million jobs since 2007.  The U.S. economy lost 125,000 more jobs during the month of June.  Approximately a million frustrated American workers have simply dropped out of the employment market altogether over the past two months.  But the question not enough people are asking is why so many jobs are being lost.  Yes, the large global corporations have been sending millions of jobs overseas where labor is far, far cheaper.  And yes, the U.S. government has accumulated so much debt that it is absolutely suffocating the U.S. economy.  But there is another very important factor that has been largely overlooked.  Traditionally, about 75 percent of all new jobs are created by small businesses.  But today, hundreds of thousands of small businesses are being strangled out of existence by all of the oppressive taxes, fees, rules, regulations, paperwork and demands that government keeps imposing on them.  In such a repressive environment, it is getting close to impossible for small businesses to thrive, and if our small businesses can’t succeed, then we simply are not going to see a lot of jobs being created.   

You see, the truth is that over the past several decades the game has become dramatically stacked in favor of large businesses.  Big corporations have the money to lobby Congress and other governmental institutions, they get almost all the tax breaks and they are the only ones who get bailouts.  They even “help” write legislation on the federal level. 

Many times large corporations will even lobby for more regulations for their own industry because they know that they can handle all of the rules and paperwork far easier than their smaller competitors can.  After all, a large corporation with an accounting department can easily handle filling out a few thousand more forms, but for a small business with only a handful of employees that kind of paperwork is a major logistical nightmare.

When it comes to hiring new employees, the federal government has made the process so complicated and so expensive for small businesses that it is hardly worth it anymore.  Things have gotten so bad that more small businesses than ever are only hiring part-time workers or independent contractors. 

So what we actually have now is a situation where small businesses have lots of incentives not to hire more workers, and if they really do need some extra help the rules make it much more profitable to do whatever you can to keep from bringing people on as full-time employees.    

Can the U.S. economy thrive in such an environment?

Of course not.

Small businesses are slowly being strangled out of existence.

Unless something changes quickly, small businesses are going to continue looking for ways to shed employees rather than hire them.

The U.S. government has become like the 500 pound fat guy who jumps on a horse and then gets angry when it won’t move.

Passing even more ridiculous regulations and raising taxes even higher is not going to fix business in America.

The burdens we have placed on our small businesses have gotten worse under every single presidential administration of the past several decades.  Now our great economic machine has become so overburdened and so tired that it is simply refusing to move.

And this is not a short-term problem either.  Yes, we have lost a ton of jobs since the beginning of the “Great Recession”, but our problems go back a lot farther than that.  The reality is that the U.S. population has grown by about 25 million people since they year 2000, and we needed to create millions upon millions of new jobs to support that increased population.  Instead, we have lost a total of 3 million jobs since 2000.

Needless to say, that is not a good trend.

There are simply not enough jobs for everyone.

Today, there are more than 5 unemployed Americans for every single job opening.

It is becoming harder and harder to find a job, and the number of Americans who are chronically unemployed is absolutely exploding.

In America today, the average time needed to find a job has risen to a record 35.2 weeks.

There are millions of Americans out there tonight who feel like punching the walls or drinking themselves under the table out of frustration because they can’t find a job.

And many of those who are “chronically unemployed” are about to experience even more pain.

So far, the U.S. Senate has refused to extend long-term unemployment benefits for about 1.3 million Americans.  Without this assistance, these Americans and their families will be forced to survive on food stamps and whatever else they can scrape together.

The tent cities that are popping up all over the United States are about to get a lot more crowded.

So is there much hope that this is going to turn around any time soon?

Unfortunately, no.

Big corporations are not going to pay U.S. workers ten times more money than what they are paying employees in Malaysia, China or the Philippines just because they feel sorry for them.

Small businesses are not going to hire a lot more workers as long as things stay the way that they are.  In fact, many small businesses are going to continue to look for ways to cut employees.

The public sector is the one place that had been hiring more workers, but due to growing concern about exploding budget deficits, there isn’t going to be a lot of additional hiring in the public sector either.

The truth is that there is not a lot of reason for optimism right now.  The U.S. economy is being battered by a host of economic problems, and with each passing week even more economists warn that we are likely headed for the second half of a double-dip recession.

So if you still have a job, be thankful.  If you don’t have a job, you are probably going to have to get really creative. 

Times are tough and they are going to get even tougher.  But it is in the midst of challenging times that we find out who we really are.

What Do You Believe Is America’s Biggest Economic Problem?

Today there are literally dozens of major threats to the U.S. economy.  Each one of these threats alone could cause a major economic implosion.  The Gulf of Mexico oil spill, the derivatives bubble, the housing crisis, the exploding U.S. national debt and the burgeoning European debt crisis all threaten to push the struggling U.S. economy over the edge.  But which one is America’s biggest economic problem?  Below, 16 of America’s greatest economic threats are listed in no particular order.  The goal of this article is to hear what all of you readers believe is the worst crisis the U.S. economy is facing.  If you would like to vote, please choose one of the 16 economic problems listed below (or nominate one of your own) and leave a comment explaining your choice….

#1) The Gulf Of Mexico Oil Spill – The Gulf of Mexico oil spill is already the worst environmental disaster in U.S. history.  Is it also about to become the worst economic disaster in U.S. history?   

#2) The Derivatives Bubble – The total value of all derivatives worldwide is estimated to be well over a quadrillion dollars.  In fact, the danger from derivatives is so great that Warren Buffet has called them “financial weapons of mass destruction”.  Will the derivatives bubble end up being the major cause of the next depression?

#3) The Housing Crash – Last month, sales of new homes in the United States dropped to the lowest level ever recorded.  Also, the number of U.S. home foreclosures set a record for the second consecutive month in May.  Very few Americans are buying houses right now.  The subprime mortgage crisis brought the U.S. financial system to the brink of ruin in 2007 and 2008.  Is it about to happen again?

#4) The Federal Reserve – Instead of printing and issuing their own currency, the U.S. government actually has to go into more debt before any new currency is created.  But the problem is that the money to pay the interest on that debt is not created at that time, so in order to pay that interest the U.S. government will need to create even more currency in the future.  That means going into even more debt.  Thus the U.S. government is caught in an endless debt spiral that has now become impossible to escape.  By basing our economy on mountains of debt and paper money that is backed by nothing, have we essentially guaranteed that our economic system will totally fail someday?     

#5) The European Sovereign Debt Crisis – Greece, Spain, Italy, Portugal and a number of other European nations are in real danger of actually defaulting on their debts.  If a wave of national defaults starts sweeping the globe, will it end up wiping out the U.S. economy as well?

#6) The Growing Welfare State – For the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.  More than 1 in 5 American children now live below the poverty line.  Nearly 51 million Americans received $672 billion in Social Security benefits in 2009.  How many people can the U.S. government possibly support financially before it finally collapses under the weight?

#7) Illegal Immigration– There are an estimated 30 million illegal immigrants now living in the United States.  Not only is this a very serious economic burden, but it is a huge national security issue as well.  Federal agents and local law enforcement officials along the border are now openly telling the media that they are outgunned, outmanned and are increasingly being shot at by the Mexican drug cartels that are openly conducting military operations inside the United States.  There is now significant Latin American gang activity in almost every large and mid-size city in the United States.  Meanwhile, Barack Obama continues to leave the border wide open.  

#8) Corruption On Wall Street– The corrupton in the financial system that has been revealed in 2010 has been absolutely mind blowing.  Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, JPMorgan Chase, Lehman Brothers and Wachovia are all being investigated by the government at this point.  The rampant manipulation of the gold and silver markets was completely blown open by an industry insider, and the U.S. government has finally been convinced to take a look at it.  It seems like the more the layers are peeled back, the more corruption we find in the financial community.  So how long can the U.S. financial system survive when corruption is seemingly everywhere? 

#9) War In The Middle East – The U.S. government has spent hundreds of billions of dollars fighting the war in Iraq.  The U.S. government has spent over 247 billion dollars on the war in Afghanistan, and yet June 2010 has now become the deadliest month of the Afghan war for coalition troops.  Now there is a very real possibility that war could erupt with Iran.  How long can the U.S. government continue to afford to pour hundreds of billions of dollars into wars in the Middle East?  Not only that, but if a war with Iran cuts off the flow of oil from the Persian Gulf, what would that do to our economic system that is so highly dependent on oil?

#10) Barack Obama’s Health Care “Reform” – Barack Obama’s pet project is actually the biggest tax increase in U.S. history, it is going to cause the premature retirement of thousands upon thousands of American doctors, and it is going to drive health insurance premiums through the roof.  Health insurance companies are going to do very well (they actually helped write the bill), but the rest of us are going to be absolutely crushed by this brutal legislation.  So what will happen when the U.S. healthcare system implodes?

#11) Barack Obama’s “Cap And Trade” Carbon Tax Scheme– Rather than focusing all of his attention on fixing the massive oil leak in the Gulf of Mexico, Barack Obama has been busy playing golf and figuring out how he can use this crisis as an opportunity to get his “cap and trade” carbon tax scheme pushed through the U.S. Congress.  But will Barack Obama’s obsession with “global warming” end up totally wrecking the U.S. economy?

#12) Globalism – Most American workers had no idea that free trade would mean that they would suddenly be competing for jobs against workers in the Philippines and Malaysia.  Today, corporations often find themselves having to choose whether to build a factory in the United States or in the third world.  But in the third world workers often earn less than 10% of what American workers earn, corporations are often not required to provide any benefits to workers, and there are usually hardly any oppressive government regulations.  How can American workers compete against that?

#13) The Moral Decline Of America – An economy stops working efficiently when people stop feeling safe and when they stop trusting one another.  As greed, selfishness, lust, pride, theft and violence continue to explode, how much longer will the U.S. economy be able to function normally?

#14) Genetic Modification – Scientists around the globe have now produced “monster salmon” which grow three times as fast as normal salmon, corn that has been genetically modified to have a pesticide grow inside the corn kernel, cats that glow in the dark and goats that produce spider silk.  Is it possible that all of this genetic modification could unleash an environmental hell that could destroy not only the economy but also our entire society?

#15) Unemployment – Tens of millions of Americans are out of work and nearly a million people have lost their unemployment benefits because the U.S. Senate has once again failed to pass a bill that would extend those benefits.  In some areas of the United States unemployment has been pushing up towards depression-era levels.  For example, a while back the mayor of Detroit said that the real unemployment rate in his city is somewhere around 50 percent.  So is the biggest problem that the U.S. economy is facing the fact that so many millions of willing American workers simply cannot find work?

#16) The U.S. National Debt – As of June 1st,  the U.S. National Debt was $13,050,826,460,886.  According to a U.S. Treasury Department report to Congress, the U.S. national debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015.  The total of all government, corporate and consumer debt in the United States is now about 360 percent of GDP.  The United States has piled up the biggest mountain of debt in the history of the world.  So how long will it be before this mountain of debt collapses?

So of the 16 economic problems listed above, which one do you believe is the biggest threat to the U.S. economy?

Please feel free to leave a comment with your vote….

Bad Economic News

It seems like almost everywhere you turn these days there is bad economic news.  Foreclosures are setting records, unemployment remains depressingly high, poverty is exploding, U.S. government debt is wildly out of control and Europe is on the verge of an economic collapse that could send the entire globe into a devastating financial panic.  If all that wasn’t enough, the oil spill in the Gulf of Mexico has destroyed the seafood and tourism industries along the Gulf coast and threatens to push that entire region into a depression for years to come.  The truth is that the more you look at the economic statistics coming in from around the globe the more it becomes obvious that we are headed for a complete and total economic nightmare. 

Just consider some of the most recent economic news…. 

*The number of U.S. home foreclosures set a record for the second consecutive month in May.  How can the U.S. housing industry be recovering when the number of Americans being foreclosed on continues to set all-time records?

*As of March, U.S. banks had an inventory of approximately 1.1 million foreclosed homes, up 20 percent from a year ago.  Instead of working their way through the huge backlog of unsold homes, U.S. banks continue to pile up a massive inventory of foreclosed homes at a staggering pace.

*According to figures from the U.S. Commerce Department, housing starts in the United States fell 10 percent in May, the biggest decline since March 2009.  The data also revealed that single-family home starts suffered the biggest drop since 1991.  There is already a massive glut of unsold homes on the market, so builders simply do not think it is profitable to build many new homes right now.

*Officials now tell us that the cost of “fixing” Fannie Mae and Freddie Mac, the government-backed mortgage companies that last year bought or guaranteed the vast majority of all U.S. home loans, will be at least $160 billion and could grow as high as $1 trillion.  The twin pillars of the U.S. mortgage industry have become financial black holes that the U.S. government endlessly pours massive amounts of cash into.  That is not a good sign.

*Fannie Mae and Freddie Mac are to be delisted from the New York Stock Exchange because their stock prices have been trading under $1 per share for more than 30 trading days.  The truth is that Fannie Mae and Freddie Mac would have completely imploded by now if the U.S. government had not decided to step in and bail them out.

*The average duration of unemployment in the United States has risen to an all-time high.  Not only are a ton of Americans out of work, they can’t find work for a very, very long time once they are unemployed.

*For Americans younger than 25 years of age, the unemployment rate is 18.8%.  But even those young Americans that can find employment often find themselves working in very low paying service jobs.

*Federal Reserve Chairman Ben Bernanke says that the U.S. unemployment rate is likely to stay “high for a while”.  Considering how badly Bernanke has been doing his job, it would be really nice if we could add just one more person to the unemployment rolls.

*According to one new study, approximately 21 percent of children in the United States are living below the poverty line in 2010 – the highest rate in 20 years.  There are hundreds of thousands of American children on the streets each night, and yet we continue to insist that we are the greatest country in the world. 

*For the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.  How many tens of millions of Americans have to be on food stamps before we officially say that we are in a depression?

*According to the Wall Street Journal, the debates have begun inside the Fed about what it should do in the event of a “double dip” recession.  If they are already debating what to do during the next economic downturn that means it is probably a foregone conclusion. 

*If you were alive when Christ was born and spent one million dollars every single day from then until now, you still would not have spent one trillion dollars by now.  But somehow the U.S. government is now over 13 trillion dollars in debt.  According to a U.S. Treasury Department report to Congress, the U.S. national debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015. 

*It is being projected that the U.S. national debt will grow to surpass our gross domestic product in 2012.  Needless to say, that is a really, really bad sign.

*The total of all government, corporate and consumer debt in the United States is now equal to 360 percent of GDP.  At no point during the Great Depression did we ever even come close to such a figure.

But things may be even worse in Europe right now.  Unfortunately for the U.S., when Europe experiences an economic collapse it will devastate the American economy as well. 

The economic news coming out of Europe lately has been extremely alarming….

*George Soros says that a European recession next year is “almost inevitable”.  Considering how much access George Soros has to inside information, the fact that he is so pessimistic about Europe is a very troubling thing indeed.

*A report by the Bank for International Settlements says that the debt crisis hitting southern Europe resembles the 2007 subprime mortgage crisis.  Is history about to repeat itself?

*Moody’s has downgraded Greece government bond ratings into junk territory, citing the risks inherent in the rescue package that the rest of the eurozone has put together for them.  Soon Spain, Portugal, Italy, Ireland, Romania and a number of other European nations could have their debt downgraded as well. 

*The U.K.’s  new Office for Budget Responsibility has announced that the U.K. economy was more damaged by the recent financial crisis than previously admitted, and that it may never fully recover.  But the same could be said for many other nations across the world as well.

*21.5% of all working-age people in the U.K. do not have a job.  It seems like almost every country has a shortage of jobs these days.

*New U.K. Prime Minister David Cameron is warning that Britain’s “whole way of life” is about to be significantly disrupted for years by the most drastic public spending cuts in a generation.  In fact, severe austerity measures being implemented all across Europe could make this one of the most “interesting” European summers in ages.

*Spanish banks are borrowing record amounts of money from the European Central Bank as Spain’s financial institutions are finding it increasingly difficult to acquire funds in international capital markets.  But the truth is that it isn’t just Spanish banks that are facing a liquidity squeeze – the entire world is heading for a massive credit crunch.

But the biggest piece of bad economic news of all is the nightmare that is unfolding in the Gulf of Mexico.  There is no way that the southeast United States is going to be the same after this.  Hordes of businesses and entire industries have been literally destroyed over the past two months.  The total economic damage from this unprecedented disaster will easily run into the hundreds of billions of dollars.  This is an economic blow that the teetering U.S. economy simply could not afford right now.  Once the oil finally stops flowing the crisis will not be over.  In fact, the aftermath from this oil spill could end up echoing for decades.

So are things bad out there?  Yes, things are incredibly bad and they are about to get a whole lot worse.  In fact, there are so many cancers eating away at the U.S. economy that it would take an entire book to detail them all. 

What we are dealing with is not “just another recession” or “just another economic downturn”.  What we are witnessing is the fundamental unraveling of the monstrous debt spiral that our economy is based upon.  Any economy that is built on a foundation of debt and paper money is inevitably doomed.

So yes, the bad economic news is going to continue.  Things may get better for a while here and there, but the truth is that we are caught in a long-term spiral of economic decline from which there is no escape.

So what do you think?  Do you believe that there is hope for the U.S. economy?  Feel free to leave a comment with your opinion….

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