FedUpUSA

Archive for August 21st, 2010

You good for it?  I’m not.

Figures on government spending and debt (last six digits are eliminated). The government’s fiscal year runs Oct. 1 through Sept. 30.

Total public debt subject to limit Aug. 19      13,310,379
Statutory debt limit                                         14,294,000
Total public debt outstanding Aug. 19            13,363,228
Operating balance Aug. 19                                    230,177
Net interest fiscal year 2010 thru July                 185,248
Net interest same period 2009                             167,706
Deficit fiscal year 2010 thru July                        1,169,071
Deficit same period 2009                                   1,266,963
Receipts fiscal year 2010 thru July                     1,752,541
Receipts same period 2009                                 1,739,949
Outlays fiscal year 2010 thru July                       2,921,612
Outlays same period 2009                                  3,006,912
Gold assets in August                                                11,041

AP

For middle class Americans, the new global economy has provided mountains of cheap products made in China, India and dozens of other nations, but it has also killed the goose that laid the golden egg.  Millions of American workers have been discovering that the price for all of those inexpensive foreign-made goodies is their jobs.  Now we have so many long-term unemployed workers in the United States that we are inventing new terms (such as “the 99ers”) to describe them.  Unemployment is on the rise again (we’ll get to the figures in a minute) and everyone seems perplexed at the continuing inability of the “greatest economy in the world” to provide jobs for everyone.  But the truth is that this has been coming for a long time.  The debt-fueled prosperity of the past couple of decades allowed us to live far beyond our means and provide very high levels of employment for a while, but now economic reality is setting in.  The millions of middle class jobs that have been shipped overseas are never coming back.  Unfortunately, the existence of a large class of chronically unemployed Americans that are struggling just to survive is going to quickly become “the new normal”.

This week the U.S. Labor Deparment announced that for the week ending August 14th, new applications for unemployment insurance benefits reached the half-million mark.  That was the first time since last November that the psychologically important 500,000 threshold had been hit.  Most economists had predicted that unemployment claims would actually decline, but instead they experienced their fourth increase in the past five weeks.

But the increase in new applications for unemployment benefits is only part of the story.  It is not such a bad thing to be unemployed if you can find another job in a couple of weeks or a couple of months.  But in 2010, there are millions of Americans that cannot seem to find a job no matter what they do month after month after month.

In fact, the number of Americans that have exhausted their state unemployment benefits and that are collecting long-term federal unemployment benefits has increased 60 percent over the past year.  The following is how a recent article on CNBC recently described the situation….

“Claimants under the Emergency Unemployment Compensation provision—who have exhausted their state benefits—surged 260,105 to 4,753,456 for the week ended July 31 (the data lags the weekly claims by two weeks). While that represents a weekly increase of 0.5 percent, the total is 60.5 percent higher than the 2009 figure of 2,961,457.”

So what will the figure be at this time next year?

6 million?

7 million?

And what happens if the U.S. Congress finally decides to cut off the long-term unemployment benefits at some point?

The truth is that things are getting really frightening out there.

“There’s a red flag being waved right now that says ‘Danger,’” Bloomberg quoted Mark Vitner, a senior economist at Wells Fargo Securities LLC as saying recently. “Growth is going to slow in the second half and we might face something a little more ominous than that.”

The reality is that there are not nearly enough jobs out there for everyone.  According to one recent survey, 28% of U.S. households have at least one member that is looking for a full-time job.

Just think about that.

Almost 30 percent of all U.S. homes have someone who is looking for a full-time job.

That is not just a problem.

That is a national crisis.

But it is not just those who are unemployed who are suffering.  The reality is that this economic downturn has hurt most of us in one way or another.  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.

Millions of Americans are putting up with increased workloads, pay decreases and benefit cuts right now because the alternative is joining the hordes of jobless Americans that are fighting tooth and nail over the few jobs that are actually available. 

Once you lose your job in this economy there is no telling when you are going to be able to get another one.  In America today, the average time needed to find a job has risen to a record 35.2 weeks.

Could you imagine being unemployed for 35 weeks?

The truth is that in 2010, it is employers that have all the power and all the leverage.

In fact, when you really analyze it, it is a wonder that companies are hiring new workers at all.  It is a massive pain in the rear end to hire a new worker in America today.  The thousands upon thousands of regulations that must be complied with, the big pile of forms that need to be filled out and the elaborate bookkeeping that must be maintained make hiring someone a major headache.  One top of that, tax contributions, benefit packages and health insurance premiums make each worker a very expensive proposition.

There is a reason why so many companies are trying to squeeze more out of the employees that they already have or are only hiring temporary employees right now.

But the biggest reason why there is such a lack of jobs is because millions upon millions of good jobs have been shipped overseas.  Globalism and “free trade” have put middle class American workers into a situation where they are in direct competition for jobs against the cheapest labor in the world.

Why in the world should U.S. companies hire American workers when they can hire very willing workers on the other side of the world who will do the same job for less than one-tenth the cost?

Those who once warned us about “the great sucking sound” that globalism would create were right, and the truth is that the U.S. has already been bleeding good jobs for years.  According to one analysis, the United States has lost 10.5 million jobs since 2007, and the truth is that unless something is done things are going to get even worse.

But what can get lost in all of these statistics is the very real pain that so many millions of Americans are now experiencing.

Losing a job and watching everything that you have worked for crumble can be extremely soul crushing.  In fact, this economy is pushing some Americans completely over the edge.

The following is an excerpt from an actual letter to U.S. Representative Anthony Weiner….

“My dad, S, killed himself March 16, 2009 because he ran out of money and could not find work. My whole family had been devastated by the economy. He was 61 years old and could not take it anymore. He could not figure out how to keep the electric on, buy food, or keep a roof over his head. A day before his electric was to be shut off, and 2 weeks away from eviction, my dad took the hardest walk of his life. He left a note on the dining room table for my sister and I. His suicide letter said ‘I love you. I had to do this. I ran out of money. I wish you both luck in your lives’. He left the door unlocked with the door key left in the lock. He carefully laid out two suits for us to pick from to bury him in.”

Could you imagine if that was your father?

As the economy continues to deteriorate, many more Americans are going to be pushed to the edge of despair.

Life is not about paying our bills or about the things that we own, but there is no denying the pain that comes when you run completely out of money and you feel totally helpless.

But nobody should ever give up.  There is always hope.  Things can always be turned around.

Unfortunately, we have entered a time when there are always going to be a large number of unemployed Americans because there are just not nearly enough jobs to go around.

Anyone who thought that we could merge American workers into a massive global labor pool and still be able to maintain our middle class lifestyles was living in fantasy land. 

No, the truth is that globalism has killed the goose that laid the golden egg and now tens of millions of Americans are going to pay the price.

The Economic Collapse

How do you know someone is a left-wing whackjob?

All you have to do is catch them lying about the “full faith and credit” of Social Security and Medicare, which they (of course) use as an excuse to avoid fiscal reality.

Well, almost solved because, according to the 14th Amendment to the Constitution (oh that thing), right there in section 4, is the statement that: “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”  So we’re stuck with those damned Social Security obligations (the ones people put money into their whole lives on the good faith that the US Government would take care of it for them and pay them back when they retire) unless we can figure out a way to get that 14th Amendment repealed so we can default on that obligation.

Uh, no.

Phil then goes on to rant about an alleged “right-wing” conspiracy to void the 14th Amendment that, he claims, is really all about turning Granny into dogfood.

That Phil seems to be this ill-informed about what Social Security and Medicare are and aren’t makes everything else he says worthless.

Incidentally, the legal status of Social Security and Medicare is not my opinion – it is that of the United States Supreme Court.

This also isn’t a new decision.  Indeed, it’s a 1960 decision – Flemming .v. Nestor, which held that Congress reserved the right to alter, amend or repeal any provision of the Act.

In point of fact there is no “debt” owed to those receiving entitlement benefits through these programs.

They are legally welfare programs which Congress can modify or even eliminate at any time without triggering any sort of Constitutional or “full faith and credit” problem, or any other legal obligation to those who have allegedly “paid in” to them over their working lives.

That is, your FICA and Medicare taxes are in fact a simple tax and your Social Security and Medicare benefits are in fact a simple welfare program.

The rest of “Phil’s” tantrum in the above-referenced link is equally-devoid of logic or mathematical fact.  That won’t stop those over at Huffington Post from having orgasms when they read it, but it fatally dooms those prescriptions from actually working (such as his proclamation that we can make homes “energy independent” by “simply” installing $50,000 worth of solar panels paid for with money we don’t have on every house.  I’ll leave the thermodynamics of that for another time.)

Someone willing to intentionally ignore long-settled (40 years+ worth!) decisions by the US Supreme Court that decisively declare the type and character of a government program, and who founded the entirety of their argument on an intentionally-false premise, simply cannot be taken seriously on any other matter of national or personal financial importance.

The Market-Ticker