FedUpUSA

Archive for the ‘Depression’ Category

The entire financial system of the western world is designed to be a debt spiral.  The total amount of money and and the total amount of debt are supposed to continually expand.  Today, we are in debt up to our eyeballs and it seems like nearly everyone is talking about “deleveraging” and reducing government debt.  But in a world where the entire financial system is based on debt, is there any way for massive deleveraging to take place without plunging us all into a horrific worldwide depression?  The governments of the western world have had a lot of fun spending money as if there was no tomorrow, but now tomorrow has arrived and all of that debt is rapidly catching up with us.  Politicians in Europe and in the United States are running around trying to come up with a “plan”, but there is no “plan” that is going to fix the current debt-based system.  Over the next few years we are going to reap what we have sown.

For fiscal year 2011, the U.S. federal government had a budget deficit of nearly 1.3 trillion dollars.  That was the third year in a row that our budget deficit has topped a trillion dollars.

Sadly, most Americans simply have no idea how much money a trillion dollars is.

Perhaps an illustration or two would help.

If on the day when Jesus was born you began spending one million dollars every single day, you still would not have spent one trillion dollars by now.

That is how large a trillion dollars is.

If you went out today and started spending one dollar every single second, it would take you over 31,000 years to spend one trillion dollars.

Some people have suggested that we could solve our problems by taxing the rich.

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

No, the truth is that what we have is a spending problem.

The U.S. federal government is spending way, way too much money.  Total U.S. government debt will soon cross the 15 trillion dollar mark.

Should we do something to celebrate such a monumental national achievement?

It really takes a special effort to borrow 15 trillion dollars.

We have accumulated the largest mountain of debt in the history of the world, and yet our government continues to add to our debt at a blistering pace.

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.

Unfortunately, we are not paying it off right now.  Instead, we are adding even more to it.

Back in the early 1980s, Ronald Reagan declared the national debt to be a national crisis.

Well, today our national debt is more than 14 times larger than it was when Reagan took office.

Something has gone horribly, horribly wrong.

Right now, spending by the federal government accounts for about 24 percent of GDP.  Back in 2001, it accounted for just 18 percent.

Spending is going in the wrong direction.

And most government spending goes into the pockets of individual Americans.

59 percent of all Americans now receive money from the federal government in one form or another.

We have got tens of millions of Americans that are completely and totally addicted to getting money from the federal government.

But wasn’t the Tea Party supposed to do something about all of this crazy government spending?

Unfortunately, the Tea Party has failed in this area.  In the mainstream media there is talk of “austerity” by the federal government, but the truth is that spending by the federal government has increased by about 5 percent so far this year.

We are hurtling toward a “debt wall” and the brakes don’t seem to work.

Europe is in a massive amount of debt trouble as well.  In fact, a financial meltdown is probably going to happen in Europe before it happens in the United States.

Greece, Portugal, Ireland and Italy all have debt to GDP ratios that are well above 100%.  Spain is in a massive amount of trouble as well.

Right now, Greece, Portugal, Ireland, Italy and Spain owe the rest of the world about 3 trillion euros combined.

Greece is on the verge of a default of one form or another, and Italy and Portugal look like they will not be far behind.

As the financial world braces for a Greek default, the yields on Greek bonds are going absolutely crazy.  The yield on 2 year Greek bonds is now over 70 percent.  The yield on 1 year Greek bonds is now over 170 percent.

Sadly, it looks like Portuguese bonds are starting to go down the same path.  The yield on 2 year Portuguese bonds is now over 17 percent.  A year ago the yield on those bonds was about 4 percent.

European banks are also drowning in an ocean of debt.

According to renowned financial journalist Ambrose Evans-Pritchard, banks in Europe need to reduce the amount of lending on their books by about 7 trillion dollars in order to get down to safe levels….

Europe’s banks face a $7 trillion lending contraction to bring their balance sheets in line with the US and Japan, threatening to trap the region in a credit crunch and chronic depression for a decade.

But can that be done safely?

Can that be done without plunging Europe into a financial nightmare?

Ambrose Evans-Pritchard is skeptical….

The risk is “Japanisation” without the benefits of Japan: without a single government, or a trade super-surplus, or 1pc debt costs, or unique social cohesion.

Already the financial crisis in Europe has pushed unemployment to frightening levels.  So what will happen if you add massive deleveraging to the equation?  Ambrose Evans-Pritchard is very concerned about what might happen in some of the most troubled nations….

Even today, the jobless rate for youth is near 10pc in Japan. It is already 46pc in Spain, 43pc in Greece, 32pc in Ireland, and 27pc in Italy. We will discover over time what yet more debt deleveraging will do to these societies.

Major European banks not only have too many loans on their books – they have also borrowed way, way too much money themselves.

The truth is that most major European banks are leveraged to the hilt and are massively exposed to sovereign debt.  Before it fell in 2008, Lehman Brothers was leveraged 31 to 1.  Today, major German banks are leveraged 32 to 1, and those banks are currently holding a massive amount of European sovereign debt.

What all of this means is that we are on the verge of some really bad stuff.

The governments of the world are up to their eyeballs in debt.  According to the Economist, the governments of the world combined are more than 40 trillion dollars in debt.  But that total only counts government debt held by the public and it does not include any future obligations (such as Social Security, etc.) owed by national governments.

It would be hard to overstate how much of a crisis this is.

But just like with the subprime mortgage meltdown of a few years ago, a number of very savvy investors and economists can see what is coming.

For example, Texas investor Kyle Bass made millions and millions of dollars betting against subprime mortgages, and now he is warning that we are facing a crisis much greater than that.

Bass believes that the European debt crisis is soon going to explode.  In particular, he has been putting his money into investments that will pay off big if Greek debt collapses.

But that is not all Bass has been up to.  He has been stockpiling gold, guns and nickels (20 million nickels to be exact).

Bass appears to be well prepared for the coming economic collapse.  The following is how one writer described his visit to the 40,000 square foot “fort” owned by Bass….

“We hopped into his Hummer, decorated with bumper stickers (God Bless Our Troops, Especially Our Snipers) and customized to maximize the amount of fun its owner could have in it: for instance, he could press a button and, James Bond–like, coat the road behind him in giant tacks. We roared out into the Texas hill country, where, with the fortune he’d made off the subprime crisis, Kyle Bass had purchased what amounted to a fort: a forty-thousand-square-foot ranch house on thousands of acres in the middle of nowhere, with its own water supply, and an arsenal of automatic weapons and sniper rifles and small explosives to equip a battalion.”

If only the rest of us were so well prepared, eh?

So if this is the kind of thing that the “financial experts” are doing, then what is the message for us?

A great storm is coming, and most Americans are going to be totally unprepared for it.

Not that things are not really, really bad already.

According to Shadow Government Statistics, the “real” rate of unemployment in the United States is creeping up toward 25 percent.

So what is going to happen if a worldwide depression hits?

Things could get very, very interesting over the next few years.

A significant percentage of Americans have already lost faith in the system.  According to a new Gallup poll, 44 percent of all Americans say that our economic system is “unfair” to them on a personal level.

But sadly, most Americans don’t really understand the mechanics of our financial system.

They don’t understand what actually makes it unfair.

That is why we need to work so hard to educate the American people about the Federal Reserve.  The Federal Reserve system is at the very heart of our financial system, and it was designed to get the U.S. government perpetually enslaved to debt.

At this point, the U.S. national debt is 4700 times larger than it was when the Federal Reserve was created back in 1913.

It looks like the creators of the Federal Reserve achieved their goal.

Posted below is a cartoon that was published one year before the creation of the Federal Reserve.  The intent of this cartoon was to criticize the “Aldrich plan” which was a precursor to the plan to create the Federal Reserve.

As you can see below, the creator of this cartoon had a good idea of what would happen if the plan put forward by Rhode Island Senator Nelson Aldrich was adopted.

Today, the Federal Reserve totally dominates our financial system just like this cartoon once warned would happen if we allowed a central bank to control our money….

The Economic Collapse

The U.S. economy is dying and most American voters have no idea why it is happening.  Unfortunately, the mainstream media and most of our politicians are not telling the truth about the collapse of the economy.  This generation was handed the keys to the greatest economic machine that the world has ever seen, and we have completely wrecked it.  Decades of incredibly foolish decisions have left us drowning in an ocean of corruption, greed and bad debt.  Thousands of businesses and millions of jobs have left the country and poverty is exploding from coast to coast.  We are literally becoming a joke to the rest of the world.  It is absolutely imperative that we educate America about what is happening.  Until the American people truly understand the problems that we are facing, they will not be willing to implement the solutions that are necessary.

The following are the top 100 statistics about the collapse of the economy that every American voter should know….

#100 A staggering 48.5% of all Americans live in a household that receives some form of government benefits.  Back in 1983, that number was below 30 percent.

#99 During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.

#98 Since Barack Obama was sworn in, the share of the national debt per household has increased by $35,835.

#97 The U.S. national debt has been increasing by an average of more than 4 billion dollars per day since the beginning of the Obama administration.

#96 It is being projected that the U.S. national debt will hit 344% of GDP by the year 2050 if we continue on our current course.

#95 The Congressional Budget Office is projecting that U.S. government debt held by the public will reach a staggering 716 percent of GDP by the year 2080.

#94 In 2010, the U.S. government paid $413 billion in interest on the national debt.  That is projected to at least double over the next decade.

#93 According to one new survey, one out of every three Americans would not be able to make a mortgage or rent payment next month if they suddenly lost their current job.

#92 State and local government debt has reached an all-time high of 22 percent of U.S. GDP.

#91 In 1980, government transfer payments accounted for just 11.7% of all income.  Today, government transfer payments account for 18.4% of all income.

#90 U.S. households are now receiving more income from the U.S. government than they are paying to the government in taxes.

#89 According to a new study conducted by the BlackRock Investment Institute, the ratio of household debt to personal income in the United States is now 154 percent.

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

#87 According to the Bureau of Economic Analysis, health care costs accounted for just 9.5% of all personal consumption back in 1980.  Today they account for approximately 16.3%.

#86 The cost of a health insurance policy for the average American family rose by a whopping 9 percent last year, and according to a report put out by the Kaiser Family Foundation and the Health Research and Educational Trust, the average family health insurance policy now costs over $15,000 a year.

#85 One study found that approximately 41 percent of working age Americans either have medical bill problems or are currently paying off medical debt.

#84 An all-time record 49.9 million Americans do not have any health insurance at all at this point, and the percentage of Americans covered by employer-based health plans has fallen for 11 years in a row.

#83 According to a report published in The American Journal of Medicine, medical bills are a major factor in more than 60 percent of the personal bankruptcies in the United States.  Of those bankruptcies that were caused by medical bills, approximately 75 percent of them involved individuals that actually did have health insurance.

#82 Average yearly tuition at U.S. private universities is now up to $27,293.

#81 The cost of college tuition in the United States has gone up by over 900 percent since 1978.

#80 In America today, approximately two-thirds of all college students graduate with student loans.

#79 In 2010, the average college graduate had accumulated approximately $25,000 in student loan debt by graduation day.

#78 The total amount of student loan debt in the United States now exceeds the total amount of credit card debt in the United States.

#77 One-third of all college graduates end up taking jobs that don’t even require college degrees.

#76 In the United States today, there are more than 100,000 janitors that have college degrees.

#75 In the United States today, 317,000 waiters and waitresses have college degrees.

#74 In the United States today, approximately 365,000 cashiers have college degrees.

#73 It is being projected that for the first time ever, the OPEC nations are going to bring in over a trillion dollars from exporting oil this year.  Their biggest customer is the United States.

#72 U.S. oil companies will bring in about $200 billion in pre-tax profits this year.  They will also receive about $4.4 billion in specialized tax breaks from the U.S. government.

#71 The United States has had a negative trade balance every single year since 1976, and since that time the United States has run a total trade deficit of more than 7.5 trillion dollars with the rest of the world.

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

#69 The U.S. trade deficit with China is now 27 times larger than it was back in 1990.

#68 Today, the United States spends more than 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.

#67 China has surpassed the United States and is now the largest PC market in the entire world.

#66 In 2002, the United States had a trade deficit in “advanced technology products” of $16 billion with the rest of the world.  In 2010, that number skyrocketed to $82 billion.

#65 In 2010, the number one U.S. export to China was “scrap and trash”.

#64 Do you remember when the United States was the dominant manufacturer of automobiles and trucks on the globe?  Well, in 2010 the U.S. ran a trade deficit in automobiles, trucks and parts of $110 billion.

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

#62 If you can believe it, more than 42,000 manufacturing facilities in the United States have been closed down since 2001.

#61 Between December 2000 and December 2010, 38 percent of the manufacturing jobs in Ohio were lost, 42 percent of the manufacturing jobs in North Carolina were lost and 48 percent of the manufacturing jobs in Michigan were lost.

#60 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs.

#59 According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades.

#58 If you gathered together all of the workers that are “officially” unemployed in the United States today, they would constitute the 68th largest country in the world.

#57 There are fewer payroll jobs in the United States right now than there were back in 2000 even though we have added 30 million extra people to the population since then.

#56 Back in 1969, 95 percent of all men between the ages of 25 and 54 had a job.  In July, only 81.2 percent of men in that age group had a job.

#55 Only 55.3% of all Americans between the ages of 18 and 29 were employed last year.  That was the lowest level that we have seen since World War II.

#54 Today, there are 5.9 million Americans between the ages of 25 and 34 that are living with their parents.

#53 The economic downturn has been particularly tough on men.  According to Census data, men are twice as likely to live with their parents as women are.

#52 According to one recent survey, only 14 percent of all Americans that are 28 or 29 years old are optimistic about their financial futures.

#51 Incredibly, less than 30 percent of all U.S. teens had a job this summer.

#50 According to one study, between 1969 and 2009 the median wages earned by American men between the ages of 30 and 50 dropped by 27 percent after you account for inflation.

#49 Since the year 2000, we have lost approximately 10% of our middle class jobs.  In the year 2000 there were about 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs.

#48 In 1980, 52 percent of all jobs in the United States were middle income jobs.  Today, only 42 percent of all jobs are middle income jobs.

#47 Back in 1980, less than 30% of all jobs in the United States were low income jobs.  Today, more than 40% of all jobs in the United States are low income jobs.

#46 According to Paul Osterman, a professor of economics at MIT, approximately 20 percent of all employed Americans are making $10.65 an hour or less.

#45 Half of all American workers now earn $505 or less per week.

#44 Since December 2007, median household income in the United States has declined by a total of 6.8% once you account for inflation.

#43 New home sales in the United States are now down 80% from the peak in July 2005.

#42 The all-time record for fewest number of new homes sold in the United States was broken in 2009.  Then it was broken again in 2010.  It is on pace to be broken once again in 2011.

#41 At one point this year, U.S. home prices had fallen a whopping 33% from where they were at during the peak of the housing bubble.

#40 U.S. home values have fallen approximately 6 trillion dollars since the housing crisis first began.

#39 According to the U.S. Census Bureau, 18 percent of all homes in the state of Florida are sitting vacant.  That figure is 63 percent larger than it was just ten years ago.

#38 Historically, the percentage of residential mortgages in foreclosure in the United States has tended to hover between 1 and 1.5 percent.  Today, it is up around 4.5 percent.

#37 According to the Mortgage Bankers Association, at least 8 million Americans are currently at least one month behind on their mortgage payments.

#36 According to a Harris Interactive survey taken near the end of last year, 77 percent of all Americans are now living paycheck to paycheck.  In 2007, the same survey found that only 43 percent of Americans were living paycheck to paycheck.

#35 Starting on January 1st, 2011 the Baby Boomers began to hit retirement age.  From now on, every single day more than 10,000 Baby Boomers will reach the age of 65.  That is going to keep happening every single day for the next 19 years.

#34 According to a new poll by Americans for Secure Retirement, 88 percent of all Americans are worried about “maintaining a comfortable standard of living in retirement”.  Last year, that figure was at 73 percent.

#33 One out of every six elderly Americans now lives below the federal poverty line.

#32 In 1950, each retiree’s Social Security benefit was paid for by 16 U.S. workers.  According to new data from the U.S. Bureau of Labor Statistics, there are now only 1.75 full-time private sector workers for each person that is receiving Social Security benefits in the United States.

#31 According to the Congressional Budget Office, the Social Security system paid out more in benefits than it received in payroll taxes in 2010.  That was not supposed to happen until at least 2016.

#30 The U.S. government now says that the Medicare trust fund will run out five years faster than they were projecting just last year.

#29 According to one study, the 50 U.S. state governments are collectively 3.2 trillion dollars short of what they need to meet their pension obligations.

#28 A different study has shown that individual Americans are $6.6 trillion short of what they need to retire comfortably.

#27 Between 1991 and 2007 the number of Americans between the ages of 65 and 74 that filed for bankruptcy rose by a staggering 178 percent.

#26 According to a shocking AARP survey of Baby Boomers that are still in the workforce, 40 percent of them plan to work “until they drop”.

#25 Last year, 2.6 million more Americans dropped into poverty.  That was the largest increase that we have seen since the U.S. government began keeping statistics on this back in 1959.

#24 Back in the year 2000, 11.3% of all Americans were living in poverty.  Today, 15.1% of all Americans are living in poverty.

#23 More than 50 million Americans are now on Medicaid.  Back in 1965, only one out of every 50 Americans was on Medicaid.  Today, approximately one out of every 6 Americans is on Medicaid.

#22 More than 45 million Americans are now on food stamps.

#21 The number of Americans on food stamps has increased 74% since 2007.

#20 Approximately one-third of the entire population of the state of Alabama is now on food stamps.

#19 Right now, one out of every four American children is on food stamps.

#18 It is being projected that approximately 50 percent of all U.S. children will be on food stamps at some point in their lives before they reach the age of 18.

#17 The poverty rate for children living in the United States increased to 22% in 2010.

#16 There are 314 counties in the United States where at least 30% of the children are facing food insecurity.

#15 In Washington D.C., the “child food insecurity rate” is 32.3%.

#14 More than 20 million U.S. children rely on school meal programs to keep from going hungry.

#13 It is estimated that up to half a million children may currently be homeless in the United States.

#12 The number of Americans that are going to food pantries and soup kitchens has increased by 46% since 2006.

#11 According to a recent report from the AFL-CIO, the average CEO made 343 times more money than the average American did last year.

#10 The wealthiest 1% of all Americans now own more than a third of all the wealth in the United States.

#9 The poorest 50% of all Americans collectively own just 2.5% of all the wealth in the United States.

#8 The percentage of millionaires in Congress is more than 50 times higher than the percentage of millionaires in the general population.

#7 According to the Bureau of Labor Statistics, 16.6 million Americans were self-employed back in December 2006.  Today, that number has shrunk to 14.5 million.

#6 According to one recent poll, 90 percent of the American people believe that economic conditions in the United States are “poor”.  To put this in perspective, only 11 percent of Americans rated economic conditions in the U.S. as “poor” back in January of 1999.

#5 According to another recent poll, 80 percent of the American people believe that we are actually in a recession right now.

#4 Our dollar is being systematically destroyed by the Federal Reserve.  An item that cost $20.00 in 1970 will cost you $116.78 today.  An item that cost $20.00 in 1913 will cost you $457.67 today.

#3 The Federal Reserve made $16.1 trillion in secret loans to their friends during the last financial crisis.

#2 The Federal Reserve is a perpetual debt machine.  Today, the U.S. national debt is more than 4700 times larger than it was when the Federal Reserve was created back in 1913.

#1 According to a new CNN/ORC International Poll, 27 percent of all Americans have never even heard of Federal Reserve Chairman Ben Bernanke.

We need to educate America.

Please share this with as many people as you can.  Time is running out for America, and 2012 is going to be an absolutely pivotal year in the history of this nation.

We are in the midst of a long-term economic decline that is rapidly accelerating.  If dramatic changes are not made very quickly, we will soon witness a full-blown collapse of the economy.

Wake up as many people as you can.

We are running out of time.

The Economic Collapse

If you think the U.S. economy is bad now, just wait for a few months.  Things are about to become absolutely nightmarish.  None of the long-term economic trends that are hollowing out our economy have been addressed and more bad economic news seems to come out virtually every single day.  Now there is constant talk of the “next recession” in the mainstream media.  But did the last recession ever truly end?  The number of good jobs continues to decline, more stores are closing, incomes continue to go down, credit card debt and student loan debt are soaring, the housing market resembles a corpse, the number of Americans living in poverty continues to rise and government debt is at unprecedented levels.  We are losing blood fast, and almost all of our leaders are either too corrupt or too incompetent to be able to do anything about it.  The U.S. economy really and truly is about to go into the toilet, and if something is not done very quickly we are going to experience a complete and total economic disaster in this nation.

Americans have been promised over and over that this economic downturn is just “temporary” and that things will return to normal soon.  During this upcoming election cycle, the Democrats will swear that they have all the answers and that if we just elect them everything will be okay.  The Republicans will also swear that they have all the answers and that if we just elect them everything will be okay.

Well, both sides are lying.  The economic plans of both major political parties are a joke.  Neither of them can restore economic prosperity to this nation.

Our politicians could delay the coming economic collapse by borrowing gigantic piles of money and pumping all of that cash into the economy.  But stealing from our children and our grandchildren is not exactly sound economic policy.

Yes, the U.S. economy is in bad shape right now, but things are about to get even worse.  The long-term problems that are destroying our economy have not been fixed, and the leaks in our ship are going to continue to grow.

The following are 30 signs that the U.S. economy is about to go into the toilet….

#1 An increasing number of unemployed Americans have become so desperate that they have started to look for work overseas.  For example, the number of Americans that are submitting applications for temporary work visas in Canada has approximately doubled since 2008.  Other Americans are willing to learn foreign languages and travel to the other side of the world if that is what it takes to land a decent job.  Just consider the following quote from a recent USA Today report….

Job placement firms are reporting a surge in American worker interest in booming economies such as Hong Kong, Singapore, China and, increasingly, India. Hunt Partners, an executive search firm, estimates that it’s getting 50% to 100% more unsolicited résumés from Americans looking for Asia-based positions today than before the recession.

#2 When Barack Obama first took office, the official U.S. unemployment rate was 7.6 percent.  Today it is 9.1 percent.

#3 The number of Americans that are concerned that they will lose their jobs continues to hover near record highs.  According to Gallup, 30 percent of all employed Americans are worried that they will soon be laid off.

#4 After three straight years of very high unemployment, you can feel frustration and desperation in the air almost everywhere that you go.  Many unemployed Americans are now at the end of their ropes.  The following is from a testimonial that was recently posted on The Atlantic….

The most difficult part of the job search is:

1. that I don’t live near a factory or outsource outlet in China, India, or Malaysia.

2. trying not to appear desperate for a job when I am, in fact, quite desperate for a job.

3. that I am subject to everyone’s advice on how to get a job, but no real job leads.

4. that I am reminded that having a good job is not an entitlement.

5. that when I become depressed from my job search, I’m told told to cheer up or else give a bad vibe to prospective employers … yet when I become happy through non-search related activities, I am reminded that I should be looking for work

7. that when I confide to friends and family that I have “given up” to pursue more fruitful interests,  it elicits a crushing look of disbelief, disappointment, and disgust

8. waiting for permission to give up.

#5 The percentage of American men that are employed continues to plummet.  In July, only 63.5 percent of all men in the United States had a job.  Since 1948, that number has only been lower one time (63.3 percent in December 2009).

#6 Back in the 1950s, manufacturing accounted for about 28 percent of U.S. GDP.  Last year, it accounted for just 11.7 percent.  Meanwhile, manufacturing now accounts for about 25 percent of GDP in China and they now actually have more factory production each year than we do.  Sadly, Barack Obama is pushing for even more trade agreements that will send millions more of our jobs overseas.

#7 The percentage of Americans that are working low paying jobs continues to relentlessly march upwards.  Back in 1980, less than 30% of all jobs in the United States were low income jobs.  Today, more than 40% of all jobs in the United States are low income jobs.

#8 According to John Williams of shadowstats.com, after you add in all short-term discouraged workers, all long-term discouraged workers and all Americans that are working part-time because they cannot find full-time employment, the real unemployment rate should be approximately 23 percent.

#9 We are starting to see another huge wave of store closings and layoffs.  For example, the parent company of Payless stores has announced that it will be permanently closing 475 stores.  Borders is in the process of closing every single one of its 399 stores.  Also, Bank of America has just announced that it will be closing about 600 branches, and that could result in the loss of about 30,000 good jobs.

#10 Median household income has fallen for three years in a row.

#11 Americans are really starting to rack up consumer debt once again.  According to Time Magazine, U.S. consumers are on pace to collectively add 54 billion dollars in credit card debt in 2011.

#12 Student loan defaults are rising very sharply. Just consider the following excerpt from a recent New York Times article….

The share of federal student loan defaults rose sharply last year, especially at for-profit colleges and universities, where 15 percent of borrowers defaulted in the first two years of repayment, up from 11.6 percent the previous year.

#13 According to a chart in The Economist, whenever the number of newspaper articles in the Financial Times and the Wall Street Journal that mention the word “recession” goes over 1,500 in a particular quarter, the U.S. economy almost always goes into a recession.

#14 The U.S. housing crash just continues to get worse.  The index of home builder sentiment put out by the National Association of Home Builders fell once again during the month of September.  With such a glut of unsold foreclosed homes on the market, it is making things really hard of home builders.  Things have gotten so bad that even the U.S. government now owns nearly a quarter of a million foreclosed homes.  The impact of this housing nightmare on families has been absolutely devastating.  Just check out what a recent Time Magazine article had to say about what has been going on in California….

The impact on children has been brutal: since 2007, 7% of the state’s children have had a foreclosure process started on their homes, the fourth-highest level in the nation, according to a study released this month by the Annie E. Casey Foundation.

#15 Many believe that due to much tighter lending standards, it is now harder to be approved for a mortgage than at any other time since World War II.  This is absolutely crushing the housing market.

#16 Most Americans don’t seem to expect housing prices to recover for an extended period of time.  One recent survey found that 54 percent of Americans believe that there will not be a housing recovery until “2014 or later“.

#17 The combined debt of the largest GSEs (Fannie Mae, Freddie Mac and Sallie Mae) has increased from 3.2 trillion in 2008 to a whopping 6.4 trillion in 2011.  If that debt goes bad, U.S. taxpayers will be left holding the bill.

#18 There are now nearly 50 million Americans that do not have health insurance, and the percentage of Americans covered by employer-based health plans has fallen for 11 years in a row.  Meanwhile, Americans now spend about 3 times as much on health care as they did back in 1990.

#19 The Postal Service has publicly announced that it is “on the verge” of financial collapse.

#20 The number of small businesses continues to fall.  I recently noted this fact on The American Dream Blog….

The number of “self-employed” Americans continues to rapidly shrink.  According the Bureau of Labor Statistics, 16.6 million Americans were self-employed back in December 2006.  Today, that number has shrunk to 14.5 million.  Even though we have 14 million unemployed people in this country and jobs are incredibly difficult to come by, the number of people trying to work for themselves continues to decrease because the environment for small businesses in this country has become so incredibly toxic.

#21 American consumers have become tremendously pessimistic.  According to one recent survey, 61 percent of all Americans believe that they will not return to their “pre-recession” lifestyles until at least 2014.  According to a different recent survey, 39 percent of Americans actually believe that the U.S. economy has now entered a “permanent decline”.

#22 Many U.S. investors certainly seem to believe that trouble is coming.  According to CNN, last month the number of bets against the S&P 500 was the highest that we have seen in about a year.

#23 The number of U.S. households that are “doubling up” continues to grow.  According to the U.S. Census Bureau, the number of combined households has increased by 10.7 percent since 2007.

#24 When Barack Obama moved into the White House, the average price of a gallon of gasoline in the United States was $1.83.  Today it is $3.58.

#25 The number of Americans living in poverty grew by 2.6 million last year.  That was the largest increase since the U.S. government began calculating poverty figures back in 1959.

#26 Back in the year 2000, 11.3% of all Americans were living in poverty.  Today, 15.1% of all Americans are living in poverty.

#27 On Barack Obama’s first day on the job, there were about 32 million Americans on food stamps.  Today, there are more than 45 million Americans on food stamps.

#28 If there is a financial collapse in Europe, that will definitely plunge us into another recession.  Right now, things do not look promising.  At this point, headlines all over the world are proclaiming that Greece is dangerously close to defaulting.

#29 At some point soon, investors all over the globe may decide that it is time to start dumping U.S. government debt.  For example, Chinese officials are now openly talking about the need to “liquidate” their holdings of U.S. Treasuries.

#30 The U.S. national debt continues to explode in size and spiral out of control.  According to Professor Laurence J. Kotlikoff, the U.S. “fiscal gap” increased by about 6 trillion dollars last year.  In fact, Kotlikoff makes a compelling argument that Greece is actually in better shape financially than the United States is.

Do you now understand how much trouble we are in?

The long-term trends that are destroying us continue to get worse.

The United States is steamrolling directly toward an economic collapse.

When this economy hits bottom and splatters all over the place, it is not going to be easy to fix.

The America that we know today is going to be wiped out by a gigantic mountain of debt and by the consequences of decades of really bad decisions.

We were handed the keys to the greatest economic machine in the history of the world and we have wrecked it.

So prepare for really, really hard times ahead.

The era of endless prosperity is ending.

Next comes the pain.

The Economic Collapse

Recent Gallup polls show that Three Years After Crisis, Little Sign of Economic Relief in U.S.

1. There has been no improvement in underemployment (counting part-time workers) from a year ago
2. Job creation has been in a narrow range since October 2010
3. Consumer spending has been stagnant since January 2009
4. Economic confidence is near the lows seen at the depth of the depression

click on any chart for sharper image

Economic Confidence: Back at Recessionary Levels

Americans’ confidence in the U.S. economy is now at its lowest point since February 2009 — near the conclusion of the recession that officially ended in June 2009. Gallup’s Economic Confidence Index was -52 in August, above its financial crisis lows, but much lower than the -21 to -35 range measured from June 2009 to June 2011.

Americans’ current level of economic confidence — which represents their views on the current state and future direction of the nation’s economy — is decidedly negative. Seventy-seven percent said the economy was getting worse in August, the highest — by far — since February 2009, the month in which Congress passed a $787 billion stimulus bill in hopes of lifting the U.S. economy out the depths of the recession.

Job Creation: Improved From 2009-2010 Lows, but Far From Early 2008 Levels

The +13 Job Creation Index for August falls into the +10 to +15 range Gallup has measured since October 2010. The good news is that for nearly a year, Gallup has found consistently higher rates of net new job creation (the difference between hiring and letting go) than it did for the first two years after the global economic collapse. The not-so-good news is that the current rate of job creation is still just half of the +26 score Gallup found when it began tracking this metric in January 2008, when the nation was already technically in a recession.

Currently, 32% of workers say their employer is hiring and 19% say their employer is letting workers go, compared with 40% and 14%, respectively, in January 2008.

Underemployment and Employment: Stuck at Year-Ago Levels

Gallup found 18.5% of workers underemployed, including 9.1% unemployed, in August 2011. These figures are based on Gallup’s measure of employment, which is not seasonally adjusted. Both of the current figures are statistically similar to what they were a year ago, meaning the employment situation in the U.S. is no better now than it was at that time.

Consumer Spending: Nowhere Near 2008 Levels

Americans’ spending has remained essentially stagnant since it fell dramatically in January 2009. Spending in stores, restaurants, gas stations, and online has averaged $66 per day so far in 2011 — similar to the $65 is 2010 and $64 in 2009. This compares with an average of $96 per day in 2008. That year, Americans’ daily spending ranged from $81 to $114 per day in monthly averages. Since 2009, monthly spending averages have ranged between $58 and $75.

No Real Recovery

Clearly there has been no real recovery from the point of view of consumers. There was a financial recovery that is now crumbling, led by bank stocks.

BAC Bank of America

$BKX Banking Index

C Citigroup

Banks Stock fueled the decline in 2008 and have done so this year as well. There was never a recovery in the real economy and now bank stocks signal the financial recovery is over as well.

Mike  “Mish”  Shedlock

Global Economic Analysis

Global Recession, Right Here, Right Now: Japan’s Capital Spending Plummets; Eurozone PMI, UK PMI, US ISM ex-Inventory, China Exports in Contraction

It’s time to stop debating whether or not the US or Europe is headed into recession. The facts show the entire global economy is in recession.

Global Recession Supporting Data-Points

• Euro zone’s manufacturing purchasing managers’ index fell to a two-year low of 49.0 in August, down from a preliminary reading of 49.7. (Business Insider)
• PMI’s contractions in Ireland, France, Italy, Spain and Greece. (Business Insider)
• Germany’s manufacturing PMI slowed to its lowest level since September 2009, slumping to 50.9, well below an initial estimate of 52.0. (Business Insider)
• US Manufacturing ISM ex-inventory Growth in contraction (Mish)
• Japan’s PMI fell at three-month low (Financial Times)
• PMI Readings in Switzerland, Sweden Drop (Financial Times)
• British manufacturing PMI falls 49, a 26-month low, in contraction (MarketWatch)
• Germany private consumption fell for first time since Q4 2009, Manufacturing growth slowest in 23 months (Reuters)
• Japan Capital Spending Plummets 7.8% In Q2, Expectations were 1% Increase (RTT)
• US Construction Declines 3.5% vs. Same period in 2010 (US Census Bureau)
• China exports to US contract, PMI barely above contraction (Reuters)
• Container traffic at Port of Long Beach drops 3.17% smack in face of normal Christmas season ramp-up (Bloomberg)
• Canada GDP unexpectedly declines led by a 2.1% drop in exports(Bloomberg)
• Brazil Unexpectedly cuts interest rates .5% to combat recession.62 of 62 Analysts Miss Call on rate cut (Mish)
• Taiwan’s PMI dropped to 45.2 in August, the lowest reading since January 2009 (Reuters)
• German economy grew just 0.1 percent in the second quarter (Reuters)
• Switzerland, economy grew at its slowest pace since 2009, as a record strong Swiss franc also bites into exports. (Reuters)
• Retail Giant in Australia Warns of Massive Price Deflation and Falling Sales, “Hardest Christmas in Retailer Lives” Coming Up (Mish)
• US Zero Jobs Growth, Unemployment Rate Flat at 9.1%; Charts, Graphs, Details (Mish)

Ten Things to Remember

1. Prior stimulus in the US is dead, having run its full course
2. There is no incentive in the US Congress for more stimulus
3. Austerity measures have yet to hit Italy and France
4. Austerity measures will continue to bite Spain, Greece, Ireland
5. Germany export machine will die without the rest of Europe
6. QE3 will fail much sooner than QE2 as interest rates already extremely accommodating
7. Gold may respond well to competitive currency devaluation schemes
8. The Eurozone is highly likely to breakup although timing is unknown
9. Global equities and commodities are priced for perfection.
10. Perfection is not happening.

Additional Reads

Talk of avoiding recession when the global economy is clearly in one and fundamentals are horrendous is sheer lunacy.

In case you missed them, please consider ….

• US In Recession Right Here, Right Now
• Yes Virginia, U.S. Back in Deflation; Inflation Scare Ends; Hyperinflationists Wrong Twice Over

Mike  “Mish”  Shedlock

Global Economic Analysis

Do you have friends, neighbors and relatives that can’t find work?  Well, unfortunately the current U.S. jobs famine is about to get a whole lot worse.  Right now there are approximately 13.9 million unemployed Americans.  That does not count those that “are not looking for work”.  That does not count those that are working part-time jobs but that are desperate for full-time work.  The truth is that we need tens of millions more full-time jobs in order to give one to everyone that wants one.  Sadly, the long-term trends that have caused this mess continue to get worse.  Unless truly dramatic changes are made, the U.S. economy is going to continue to bleed jobs and that is going to suck the hope right out of this country.  It is time to wake up America!  It is not a big mystery why we don’t have enough jobs.  But sadly, very few of our leaders are talking about the real issues.

Something has got to be done.  Unemployment is already at epidemic levels, and this country can’t afford for things to get much worse.  Just check out how a recent article in The Wall Street Journal summarized our current predicament….

There are more unemployed than the combined populations of Wyoming, Vermont, North Dakota, Alaska, South Dakota, Delaware, Montana, Rhode Island, Hawaii, Maine, New Hampshire, Idaho and the District of Columbia.

If they were a country, the 13.9 million unemployed Americans would be the 68^th largest country in the world, bigger than the population of Greece or Portugal (each of which has 10.8 million people) and more than twice the population of Norway (4.7 million.)

Isn’t that incredible?

The number of unemployed Americans is larger than the entire population of Greece.

There are millions of Americans that will be sitting at home in front of their televisions tonight wondering why they can’t find jobs.  Last month, only 58.1% of Americans over the age of 16 were employed.  Our economy should be able to do far better than that.

All over the Internet there are stories of people that have sent out hundreds (or even thousands) of resumes and nobody even wants to interview them.  One recent survey found that approximately 80 percent of all Americans believe that it is “difficult” to find a job right now.

Unfortunately, things are going to get much, much worse before all this is over.

The following are 10 very obvious reasons why the devastating U.S. jobs famine is going to suck the hope right out of America….

#1 Our politicians simply do not care that America is bleeding jobs.  Amazingly, even with rampant unemployment plaguing this nation, Obama administration officials continue to declare that it is okay that we are losing manufacturing jobs because a lot of cheaper products are things that “we don’t want to make in America” anyway.  The following is what U.S. Trade Representative Ron Kirk told Tim Robertson of the Huffington Post the other day….

Let’s increase our competitiveness… the reality is about half of our imports, our trade deficit is because of how much oil [we import], so you take that out of the equation, you look at what percentage of it are things that frankly, we don’t want to make in America, you know, cheaper products, low-skill jobs that frankly college kids that are graduating from, you know, UC Cal and Hastings [don't want], but what we do want is to capture those next generation jobs and build on our investments in our young people, our education infrastructure.

The economic negligence that recent administrations have demonstrated has been absolutely mind boggling.  Blue collar male workers in particular are being absolutely devastated by the loss of manufacturing jobs.  Back in 1967, 97 percent of men with a high school degree between the ages of 30 and 50 had jobs.  Today, that figure is down to 76 percent.

#2 The Obama administration has now instituted a policy of “backdoor amnesty” for illegal immigrants by executive fiat.  Janet Napolitano has announced that from now on there will be a case-by-case review of all deportation cases.  Cases involving criminals will be prioritized and most others will be thrown out.  A list of 19 factors that will allow government officials to use “prosecutorial discretion” in immigration cases has been distributed.  Recently, I listed a few of those “factors” on The American Dream website….

-arrival in the U.S. as a young child

-actively “pursuing an education”

-serving or served in the U.S. military

-spouse of someone in the U.S. military

-18 years old or younger

-”elderly”

-pregnant or nursing

-victim of a “serious crime”

-serious disability or health problem

-caring for a family member with a serious disability or health problem

Obviously, it is not going to be too difficult for most illegal immigrants to fit into at least one of those categories.

On top of everything else the Obama administration has announced that it will now allow illegal immigrants to apply for work permits….

Illegal aliens living in the United States typically don’t apply for work permits for fear of deportation, but under the new policy, they could apply for work permits if granted deferred action or parole and compete with 22 million Americans who can’t find a full-time job.

So now blue collar Americans workers will have even more competition for the dwindling number of jobs.

#3 State and local governments all over the country are dead broke, and an atmosphere of austerity is sweeping the nation.  Right now state and local governments are slashing jobs at an unprecedented rate.

In the past, government jobs were considered to be very secure and they definitely paid a lot higher than average.  But now that era is coming to an end, at least on the state and local government levels.

According to the Center on Budget and Policy Priorities, state and local governments have eliminated more than half a million jobs since August 2008.  UBS Investment Research is projecting that state and local governments in the U.S. will cut 450,000 more jobs by the end of 2012.

#4 U.S. businesses are being absolutely crushed by mountains of nightmarish regulations, and yet the federal government, the state governments and local governments just continue to pile them on.  For example, the U.S. Food and Drug Administration is projecting that the food service industry will have to spend an additional 14 million hours every single year just to comply with new federal regulations that mandate that all vending machine operators and chain restaurants must label all products that they sell with a calorie count in a location visible to the consumer.  Due to these kinds of ridiculous regulations, many business owners have simply given up and many other potential business owners figure that owning a business is just not worth the hassle.

#5 As I have written about so many times before, the “global economy” is really bad for American workers.  When we merged our economy with the economies of nations where it is legal to pay slave labor wages, we made it inevitable that we would start losing massive amounts of jobs.

Why would a giant corporation pay a U.S. worker 10 to 20 times as much as a worker on the other side of the globe?  Investors actually expect big companies to have an “outsourcing” strategy today.  When more jobs get shipped out of the country, profits go up, stock prices go up and executive bonuses go up.

Big corporations don’t exist to provide you with jobs.  They exist to maximize shareholder wealth.  If taking your job away and giving it to someone in Asia will make more money for them, then that it exactly what they are going to do.

#6 Unfair trade is absolutely killing our economy.  It would be one thing if the U.S. was running a massive trade deficit solely because we were incompetent.  But the truth is that a big factor is that a number of our “trade partners” are economic predators that are purposely trying to prey on us.

The other day, I wrote about some of the things that China does to steal our jobs, our factories and our wealth….

China massively subsidizes their biggest corporations, they brazenly steal technology from anyone that they can, they openly manipulate exchange rates and they allow their workers to be paid slave labor wages.

Today, we spend about 4 dollars on imports from China for every 1 dollar that China spends on imports from us.  China now even makes more beer than we do.  Even the new Martin Luther King, Jr. Memorial on the National Mall was made in China.

Until our politicians start insisting on a level playing field, all of this is going to continue.

#7 Small businesses are traditionally one of the primary engines of job growth in this country.  But right now, small businesses all over America are having a really hard time getting anyone to loan them money.  A big reason for this is that the Federal Reserve is actually paying banks not to make loans.  Unfortunately, if small businesses can’t get the money that they need, then they can’t hire people.

#8 A lot of people may not want to hear this, but businesses in the United States are being absolutely taxed into oblivion.  The U.S. now has the highest corporate tax rate in the world, but that is only a very small part of the story.

Michael Fleischer, the President of Bogen Communications, wrote an op-ed last year for the Wall Street Journal entitled “Why I’m Not Hiring”.  The following is how Paul Hollrah of Family Security Matters summarized the nightmarish taxes that are imposed when Fleischer hires a new worker….

According to Fleischer, Sally grosses $59,000 a year, which shrinks to less than $44,000 after taxes and other payroll deductions. The $15,311 deducted from Sally’s gross pay is comprised of New Jersey state income tax: $1,893; Social Security taxes: $3,661; state unemployment insurance: $126; disability insurance: $149; Medicare insurance: $856; federal withholding tax: $6,250; and her share of medical and dental insurance: $2,376. Roughly 25.9 percent of Sally’s income is siphoned off by Washington and Trenton before she receives her paychecks.

But then there are the additional costs of employing Sally. In addition to her gross salary, her employer must pay the lion’s share of her healthcare insurance premiums: $9,561; life and other insurance premiums: $153; federal unemployment insurance: $56; disability insurance: $149; worker’s comp insurance: $300; New Jersey state unemployment insurance: $505; Medicare insurance: $856; and the employer’s share of Social Security taxes: $3,661.

Over and above her gross salary, Bogen Communications must pay an additional $15,241 in benefits and state and federal taxes, bringing the total cost of employing Sally to approximately $74,241 per year. Sally gets to keep $43,689, or just 58.8% of that total.

After reading all that, can you really blame business owners for not wanting to hire additional workers?

#9 The national debt is like a giant albatross around the neck of the economy. The U.S. national debt has increased by more than 4 trillion dollars since Barack Obama took office.  The rampant government spending that has been going on has not done much to create new jobs, but it will be a massive burden that will weigh down economic growth for many years to come.

When a nation is drowning in debt, a tremendous amount of economic resources must go to servicing that debt.  Right now, hundreds of billions of dollars a year that could be used to build up our economy are instead being used to pay interest on the national debt.  If interest rates go up significantly, we could soon be paying over a trillion dollars a year just in interest on the national debt.

#10 Right now America is very deeply divided and a tremendous sense of pessimism has set in.  One recent survey found that 48 percent of Americans believe that it is likely that another great Depression will begin within the next 12 months.  With such a negative feeling in the air, it is going to make it even less likely that business owners will be in the mood to hire people.

I know that I pick on Detroit a lot, but it really is a microcosm of what is happening to America.  The following video contains some absolutely amazing footage of the ruins of Detroit….

Sadly, what is happening to Detroit is happening in hundreds of other communities across the United States.

All over America, neighborhoods that were once teeming with hope and prosperity are now falling apart.  Hopelessness is rampant and it is spreading.  The number of Americans on food stamps has increased 74% since 2007.  If not for our increasingly overwhelmed “safety net”, we would already have mass rioting in the streets.

Sadly, we are already seeing all sorts of signs that society is collapsing.  As the economy continues to fall apart, the violence in our neighborhoods is going to get even worse.

The following is one very shocking recent example from the Chicago Tribune….

Moments before she was slain last week on Chicago’s Southwest Side, 17-year-old Charinez Jefferson begged the gunman not to shoot because she was pregnant, prosecutors said today.

Despite her plea, Timothy Jones, 18, opened fire on Jefferson anyway, yelling an expletive at her as he shot her in the head, prosecutors said. He then stood over her as she lay on the ground and fired several more times, striking her in the chest and back.

America is changing.  The country that so many of us have loved all of our lives is becoming unrecognizable.  Large numbers of communities have had all of the hope sucked right out of them.  Tens of millions of Americans that want to do things the “right way” are rapidly losing faith in the system.

When you can’t get a decent job after months and months of trying it can be absolutely soul-crushing.

What do you tell someone that has spent a year sending out resumes and has used up all of their savings?

The era of endless prosperity for America is at an end.  The cold, hard consequences of decades of bad decisions are starting to set in.

Unless a dramatic change of course happens, the long-term trends noted above are going to get progressively worse.  It won’t matter who is running Congress and it won’t matter who is in the White House.

Right now our economy is rapidly hurtling downhill on a bus without breaks and we are headed directly for a cliff.

Please wake up America.

The Economic Collapse