The people out there that believe that the U.S. economy is experiencing a permanent recovery and that very bright days are ahead for us should have their heads examined.  Unfortunately, what we are going through right now is simply just a period of “hopetimism” between two financial crashes.  Things may seem relatively stable right now, but it won’t last long.  The truth is that the financial crisis of 2008 was just a warm up act for the economic horror show that is coming.  Nothing really got fixed after the crash of 2008.  We are living in the biggest debt bubble in the history of the world, and it has gotten even bigger since then.  The “too big to fail” banks are larger now than they have ever been.  Americans continue to run up credit card balances like there is no tomorrow.  Tens of thousands of manufacturing facilities and millions of jobs continue to leave the country.  We continue to consume far more than we produce and we continue to become poorer as a nation.  None of the problems that caused the crisis of 2008 have been solved and we are even weaker financially than we were back then.  So why in the world are so many people so optimistic about the economy right now?

Just take a look at the chart posted below.  It shows the growth of total debt in the United States.  During the financial crisis of 2008 there was a little “hiccup”, but the truth is that not much deleveraging really took place at all.  And since the recession “ended”, total credit market debt has gone on to even greater heights….

So what does this mean for the future?

Well, if a small “hiccup” in the debt bubble caused so much chaos back in 2008, what is going to happen when this debt bubble finally bursts?

That is something to think about.

Sadly, most Americans seem oblivious to all of this.

If you go out to malls in the wealthy areas of America today, people are charging up a storm.  In all, Americans charged a whopping 2.5 trillion dollars on their credit cards during 2011.  Way too many people have already forgotten the lessons that we all learned back in 2008.

Of course some Americans pay off their credit cards every month, but way too many Americans are not doing that.  Today, Americans are carrying 793 billion dollars in revolving credit balances.

And student loan debt is an even bigger bubble than credit card debt is.  As I have written about previously, total student loan debt in America is rapidly approaching a trillion dollars.

So it looks like U.S. consumers have not learned to stay away from debt.

That is not good.

Well, what about the banks?

Has the financial system learned any lessons since 2008?

No, not really.

Sadly, the “too big to fail” banks are now even bigger than ever.  The total assets of the six largest U.S. banks increased by 39 percent between September 30, 2006 and September 30, 2011.  If they were to fail today, they would be even more of a threat to our financial system than they were back in 2008.

And our major banks continue to be very highly leveraged.  In fact, major banks all over the world are absolutely swamped with debt.

The following statistics come from Zero Hedge….

The U.S. banking system is leveraged 13 to 1.

The Japanese banking system is leveraged 23 to 1.

The French banking system is leveraged 26 to 1.

The German banking system is leveraged 32 to 1.

These are insane levels of leverage, and they are just inviting another major financial crisis.

Do you all remember Lehman Brothers?  The fact that they were leveraged so highly is what did them in back in 2008.  When the value of their holdings declined by just a little bit they were totally wiped out.

Well, during this next financial crisis large financial institutions are going to be wiped out all over the world.  Major banks all over the globe are going to be crying out for more bailouts when things take a turn against them.

They are making the exact same mistakes that they made before, and they are going to be expecting more government handouts when things go bad.

Will we ever learn?

So obviously the banking system has not learned any lessons.

What about the federal government?

Well, if you follow my blog regularly, you know that I love to write about how horrific U.S. government debt is.

Unfortunately, over the past four years things have gotten so much worse.

Back in 2008, the U.S. national debt crossed the 10 trillion dollar mark.

Just recently, it crossed the 15 trillion dollar mark.

So now we are in a much weaker position financially to respond to another major financial crisis.

Just check out the chart posted below.  This is a recipe for national financial suicide….

During fiscal 2011, the Obama administration stole close to 150 million dollars from our children and our grandchildren every single hour.

At the moment, the legacy of debt that we are passing on to future generations is sitting a grand total of $15,351,406,294,640.49.

But keep in mind that it is going up every single hour.

Meanwhile, our ability to service that debt is declining.  We are rapidly getting poorer as a nation.

During 2011, the amount of money that left the United States exceeded the amount of money that entered the United States by more than a half a trillion dollars.

This gap is called a trade deficit, and it is absolutely ripping our economy to shreds.

For a moment, imagine Uncle Sam standing next to a giant pile of money on a map of the United States.  Then imagine a half a trillion dollars being taken out of that pile every single year.

So why haven’t we totally run out of money yet?

Well, it is because we borrow those dollars back.  In order to maintain our false standard of living, our federal government, our state governments and our local governments have to go out and beg the rest of the world to lend us our dollars back.

Sadly, our government schools have “dumbed-down” the population so much that most of them don’t even know what a “trade deficit” is anymore.

Meanwhile, our economic infrastructure is being gutted like a fish.

Look, I know that I go over this point over and over and over, but it is absolutely imperative that we all understand this.

The half a trillion dollars a year that leaves this country every year could have gone to support businesses and jobs inside the United States.

But instead it is going to support businesses and jobs on the other side of the world.

The consequences of this are absolutely devastating.

According to U.S. Representative Betty Sutton, an average of 23 manufacturing facilities a day closed down in the United States during 2010.  Overall, more than 56,000 manufacturing facilities in the United States have shut down since 2001.

Even many so-called “American companies” have been bought up by the rest of the world.  The following comes from a recent article posted on Economy In Crisis….

RCA is now a French company, Zenith is a Korean company. Frigidaire is a Swedish company. IBM’s Personal Computer Division—with its 500 patents—is now a Chinese company. Westinghouse Nuclear Energy’s major shareholder is Toshiba—a Japanese Company. Lucent Technologies, a former research division of AT&T, along with all the patents acquired from the beginning of the phone system, is now a French company. In 2008, Brazilian-Belgian brewing company InBev purchased the iconic American brewer Anheuser-Busch, makers of Budweiser. With the sale of these manufacturing companies, the future profit and technologies all belong to foreign entities.

We once had the greatest economic machine in the history of the world.

Now it is being dismantled and bought up by foreigners.

When America’s economic infrastructure declines, that means that there are less jobs available for all of us.

As I wrote about the other day, the employment situation in this country is not getting better and we have never even come close to recovering from the recession that started back in 2008.

During 2008 and 2009, the U.S. economy lost millions of jobs.  Since the beginning of 2010, the percentage of the U.S. population that has had a job has remained very stable….

Normally, when a recession ends the percentage of Americans that have a job bounces back pretty dramatically.

So considering the fact that the employment situation has never recovered from the last financial crisis, what is going to happen when the next financial crisis hits?

And most of the jobs that have been “created” during this so-called “recovery” have been low income jobs.  In fact, if you look closely at the employment numbers that were released last Friday, you will find that the vast majority of the “new jobs” were part-time jobs.

But you cannot pay a mortgage and support a family on a part-time job.

Sadly, the truth is that median household income in America has been steadily dropping over the past several years.  Tens of millions of American families are deeply struggling and more Americans than ever are falling into poverty.

Back in the year 2000, about one out of every nine Americans was living in poverty.  Today, about one out of every seven Americans is living in poverty.

All of this is causing a great deal of anxiety in America today.  Large numbers of Americans know that something has fundamentally changed, even if they don’t understand the specifics.  That is one reason why sites such as this one have become so popular.  People want some answers.

And once people get some answers about what is really happening, they tend to want to prepare for the hard times that are coming.

In a few days, a new series on National Geographic entitled “Doomsday Preppers” premieres.  The mainstream media is starting to take notice of the growing “prepper” movement in America today.  It is estimated that there are at least 2 million “preppers” in the United States at this point.  Of course people are “prepping” for a whole host of reasons, but the number one concern among most groups of preppers is the economy.

As the economy crumbles, more Americans than ever have decided that it is not a good thing to be 100% dependent on the system.

Back in 2008 and 2009, millions of Americans suddenly lost their jobs.  Because they did not have any finances stored up, large numbers of them also lost their homes.  Many went from being solidly middle class to being out on the street in a matter of months.

That doesn’t have to happen to you.  Instead of blowing your money on frivolous things, do what you can to set something aside for the difficult times that are on the horizon.

A lot of those “in the know” are quietly making their own preparations.  For example, legendary film director James Cameron (Avatar, Titanic and Terminator) has purchased more than 2600 acres of farmland in New Zealand and he is getting out of the U.S. for good apparently.

Unfortunately, most of us do not have the resources for something like that.  But what most of us can do is we can change our priorities and start focusing on the things that will help us survive the hard times that are coming.

So are you ready?

The Economic Collapse

On Friday, the entire financial world celebrated when it was announced that the unemployment rate in the United States had fallen to 8.3 percent. That is the lowest it has been since February 2009, and it came as an unexpected surprise for financial markets that are hungry for some good news.  According to the Bureau of Labor Statistics, nonfarm payrolls jumped by 243,000 during the month of January.  You can read the full employment report right here.  Based on this news, pundits all over the world were declaring that the U.S. economy is back.  Stocks continued to rise on Friday and the Dow is hovering near a 4 year high.  So does this mean that our economic problems are over?  Of course not.  A closer look at the numbers reveals just how fraudulent these employment statistics really are.  Between December 2011 and January 2012, the number of Americans “not in the labor force” increased by a whopping 1.2 million.  That was the largest increase ever in that category for a single month.  That is how the federal government is getting the unemployment rate to go down.  The government is simply pretending that huge numbers of unemployed Americans don’t want to be part of the labor force anymore.  As you will see below, the employment situation in America is not improving.  Yet everyone in the mainstream media is dancing around as if the economic crisis has been cancelled.  I can’t take it anymore!  It is beyond ridiculous that so many intelligent people continue to buy in to such fraudulent numbers.

The truth is that the labor force participation rate declined dramatically in January.  For those unfamiliar with this statistic, the labor force participation rate is the percentage of working age Americans that are either employed or that are unemployed and considered to be looking for a job.

As you can see from the chart posted below, the labor force participation rate rose steadily between 1970 and 2000.  That happened because large numbers of women were entering the labor force for the first time.

The labor force participation rate peaked at a little more then 67 percent in the late 90s.  Between 2000 and the start of the recent recession, it declined slightly to about 66 percent.

Since then, it has been dropping like a rock.  The chart below does not even include the latest data.  In January, the labor force participation rate was only 63.7 percent.  That is the lowest that is has been since May 1983.  So keep that in mind as you view the chart.

In reality, the percentage of men and women in the United States that would like to have jobs is almost certainly about the same as it was back in 2007 or 2008.  There has been no major social change that would cause large numbers of men or women to want to give up their careers.  So there is something very, very fishy with this chart….

The federal government has been pretending that millions of unemployed Americans have decided that they simply do not want jobs anymore.

This does not make sense at all.

The truth is that unemployment is not really declining at all.  The percentage of Americans that are working is not increasing.  The civilian employment-population ratio dropped like a rock during 2008 and 2009 and it has held very steady since that time.

In January, the civilian employment-population ratio once again held steady at 58.5 percent.  This is about where it has been for most of the last two years….

Does that chart look like an “economic recovery” to you?

Of course not.

If the percentage of people that are employed is about the same as it was two years ago, does that represent an improvement?

Of course not.

If the employment situation in America was getting better, the civilian employment-population ratio would be bouncing back.

We should be thankful that our economy is not free falling like it was during 2008 and 2009, but we also need to understand why things have stabilized.

The federal government is spending money like there is no tomorrow.  During 2011, the Obama administration stole an average of about 150 million dollars an hour from our children and our grandchildren and pumped it into the economy.  Even though the Obama administration spent that money on a lot of frivolous things, it still got into the pockets of average Americans who in turn went out and spent it on food, gas, clothes and other things.

Without all of this reckless government spending, we would not be able to continue to live way above our means and our economic problems would be a lot worse.

But even with the federal government borrowing and spending unprecedented amount of money, and even with interest rates at record lows, our economy is still deeply struggling.  Just consider the following facts….

-New home sales in the United States hit a brand new all-time record low during 2011.

-The average duration of unemployment in America is close to an all-time record high.

-The percentage of Americans living in “extreme poverty” is at an all-time high.

-The number of Americans on food stamps recently hit a new all-time high.

-According to the Census Bureau, an all-time record 49 percent of all Americans live in a home that gets direct monetary benefits from the federal government.  Back in 1983, less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.

So let’s not get too excited about the economy.

Yes, things have somewhat stabilized.  The percentage of Americans that have jobs is about the same as it was two years ago.  Considering how rapidly jobs are being shipped out of the United States, that is a good thing.

Enjoy this false bubble of hope while you can.  Things are about to get a lot worse.

Do you remember how rapidly things fell apart after the financial crisis of 2008?

Well, another major financial crisis is on the way.  This time it is going to be centered in Europe initially, but it is going to spread all around the globe just like the last one did.

As the charts above show, we have never even come close to recovering from the last recession, and another one is on the way.

So how bad are things going to get after the next wave of the financial crisis hits us?

That is something that we should all be thinking about.

The Economic Collapse

A higher percentage of the American population is receiving government benefits than ever before.  Yes, there have always been poor people that have needed our assistance, but what does it say about our economy that the number of Americans dependent on the government is at an all-time high?  Every night on the evening news we are told that the economy is improving, and Barack Obama is endlessly giving speeches about the “economic recovery” that is supposedly underway.  But that is not the reality on the ground for those on the bottom rungs of the income ladder in America.  People are really hurting out there, and the number of Americans that are turning to the government for financial assistance just continues to increase.  Yes, we should always have a “safety net”, but right now our “safety net” is becoming massively overloaded as millions more Americans jump on to it every single year.  What all of these impoverished Americans really need are jobs, but the U.S. Congress and the past several administrations have been systematically killing job growth in America.  So unfortunately the number of poor Americans is going to continue to rise, and that is really bad news for a nation that is already drowning in debt.

Some people out there want to blame the poor for the statistics that you are about to read, but that is a mistake.  Yes, there are a lot of people out there that are abusing the system, and that needs to be stopped.

But many Americans that are dependent on the government are in that situation because there simply are not enough jobs in this country.

And unfortunately, the Obama administration and the U.S. Congress continue to pursue the same job-killing policies that have gotten us into this mess in the first place.  So millions of Americans that have learned to survive as government dependents are not being given the opportunity to break out of that cycle.  When there is a shortage of decent jobs, it is easy to give up.  Many tend to become more and more comfortable being dependent on the government as time goes by.

Once you become addicted to getting a government check in the mail, it can be very difficult to give that up.  There are some that get trapped in a life of government dependence for years or even decades.

The following are 16 statistics which show that the number of Americans dependent on the government is at an all-time high….

#1 According to the Census Bureau, 49 percent of all Americans live in a home that gets direct monetary benefits from the federal government.  Back in 1983, less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.

#2 The amount of money that the federal government gives directly to Americans has increased by 32 percent since Barack Obama entered the White House.

#3 The number of Americans receiving Social Security disability benefits has increased by 10 percent since Barack Obama first took office.

#4 Back in 1990, the federal government accounted for 32 percent of all health care spending in America.  Today, that figure is up to 45 percent and it is projected to surpass 50 percent very shortly.

#5 The number of Americans on food stamps recently hit a new all-time high.  It has increased by 3 million since this time last year and by more than 14 million since Barack Obama first entered the White House.

#6 Today, one out of every seven Americans is on food stamps and one out of every four American children is on food stamps.  This is unprecedented in American history.

#7 In 2010, 42 percent of all single mothers in the United States were on food stamps.

#8 Back in 1980, government transfer payments accounted for just 11.7% of all income.  In 2010, government transfer payments accounted for 18.4% of all income, which was a new all-time high.

#9 By the end of 2011, approximately 55 million Americans received a total of approximately 727 billion dollars in Social Security benefits.  As the retirement crisis becomes much worse, that dollar figure is projected to absolutely skyrocket.

#10 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.

#11 Back in 1965, only one out of every 50 Americans was on Medicaid.  Today, one out of every 6 Americans is on Medicaid, and things are about to get a whole lot worse.  It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.

#12 The U.S. government now says that the Medicare trust fund will run out five years faster than previously anticipated.

#13 The total cost of just three federal government programs – the Department of Defense, Social Security and Medicare – exceeded the total amount of taxes brought in during fiscal 2010 by 10 billion dollars.

#14 It is being projected that entitlement spending by the federal government will nearly double by the year 2050.

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

#16 When you total it all up, American households are now receiving more money directly from the federal government than they are paying to the government in taxes.

Once again, I am not blaming the poor.  Almost all of us know of someone that is on government assistance.  Most of them are not dependent on the government because they are lazy or because they want to cheat the system.  Most of them have just had their dreams crushed by this horrible economy and need a helping hand.

It is incredible how anyone can run around claiming that the U.S. economy is heading in the right direction with all of this going on.

Yes, things are going fairly well for the boys and girls down on Wall Street, but for the vast majority of Americans things are looking quite bleak.

For example, things have gotten so bad that the state of Florida is actually considering using ballparks and sports stadiums as shelters for the homeless.

But when it comes to so many people being financially dependent on the federal government, there is a major problem.

The problem is that the federal government is absolutely drowning in debt.

So why don’t our politicians just explain to the American people that we need to start cutting back and reducing the size of some of these programs?

Well, if any of our politicians try to do that they won’t get elected next time around.

The truth is that the American people are deeply addicted to government money.

Any politician that proposes significant cuts to Social Security or Medicare is a goner.

Every poll or survey that is done on this subject shows that the American people are overwhelmingly against cuts to programs like Social Security and Medicare.

So politicians will just keep spending money like there is no tomorrow, and the American people will just keep sending them back to Washington.

But just like we saw in Greece, a day of reckoning comes eventually.

There will come a time when the federal government will not be able to steal 150 million dollars an hour from our children and our grandchildren.

There will come a time when there will not be enough money for all of these growing social programs.

So once the government checks stop rolling in, what is going to happen then?

The Economic Collapse

Here it is…..

Nonfarm payroll employment rose by 200,000 in December, and the unemployment rate, at 8.5 percent, continued to trend down, the U.S. Bureau of Labor Statistics  reported today. Job gains occurred in transportation and warehousing, retail trade, manufacturing, health care, and mining.

Uh huh.  Let’s see what we actually have in here.

Heh the annualized doesn’t look so bad eh?  But look at the blue dashed line — that’s not so good.  And we need to dig into that and figure out what’s up, because I don’t like that trend at all.

Ok, so the actual number of employed people went down.  Hmmmmm.

“Not in labor force” went down slightly as a trend (that is, the slope decreased), but increased numerically.

How about the employment rate — the most-important number in there, since it controls the taxing capacity of the government.

That’s not good — it’s down a touch and has flat-lined now for basically two years.

Here’s the problem with this report — the non-institutional working-age population went from 240.441 million to 240.584, a gain of 143,000 people of working age.  But the number of employed people went down from 141.070 million to 140.681 — a loss of 389,000.  Adding the two, which is the correct way to look at it, the economy on a population-adjusted basis lost 532,000 jobs.

2011 is nearly complete, so it is time to look briefly behind us and look forward to the new year. Somehow, through some minor miracle, the American and global economies avoided recession this year. Yes, I know, “recession” has become a relative term. It’s well nigh impossible to tell the difference between the “slow” GDP growth we’ve got now and another downturn. However, a recession implies an actual contraction in economic activity, and all that entails—job losses instead of paltry gains, yet another downturn in the housing market, another nosedive in auto sales, and so on.

The “good times” of 2011 are behind us and 2012 lies ahead. What will the new year bring? John Hussman recently asked have we avoided a recession?

In recent months, we’ve observed a fairly neutral flow of economic data — not strong by any means, but offering a reprieve from the clearly  negative momentum that we observed in late-summer.

The following chart  is presents a consensus of economic measures that we track as a  composite (long-term chart here),  focusing on the past decade. Note the bounce toward zero that we’ve  seen in recent months. New orders remain generally weak, but other  measures are dead-neutral. Note that we saw a similar pop for a few  months just as we were entering the last recession in 2007. Modest  upticks in these measures – even if concerted – don’t carry much  information.

And while this graph appears to show there is no cause for alarm, Hussman still sets the chances of a recession in 2012 at about 85% (in another graph not shown here). That prediction is based on his analysis of the economic indicators.

We use a variety of methods to gauge recession  risk. The most straightforward is to form fairly low-order indicator  sets like our Recession Warning Composite (see November 12, 2007, Expecting A Recession),  that have a long historical record of accurately distinguishing  recessions. These indicator sets are comprised of what might be called  “weak learners” — conditions that do not in themselves have infallible  records of identifying recessions, but that provide very strong signals  when observed in combination with other recession flags. They include  fairly straightforward conditions such as whether or not the S&P 500  is below its level of 6 months earlier, whether credit spreads are  wider than they were 6 months earlier, whether the Purchasing Manager’s  Index is in the low 50′s or below, and so forth.

As of last week, a simple average of 20 of these  binary recession indicators continued to show a preponderance of signals  still in place — a condition that has never been observed except  alongside a U.S. recession.

This is the calm before the storm according to Hussman, which is is bad enough if we consider only the United States. But then there is a possibility of a global contraction led by the troubles in Europe and the ever-more-obvious downturn in China. Hussman provides charts to document those catastrophes in the making. What would happen to the American economy in the context of a global recession? More specifically—

• What would happen to America’s already unhealthy import/export balance?
• What would happen if contagion in the global finance system spreads to this country?

And then there are oil prices, which now exceed $100/barrel. If there is a global recession, we might expect demand to fall off and prices to decline. However, those prices are undoubtedly helping to push us into another recession.

If we add all of these factors together, it appears that a new recession is all but inevitable. Thus it appears we will not escape “unscathed” in 2012 as we did in 2011. (I am not talking about the Mayan Prophecy  ) It appears that serious damage is going to be done next year, not only in Europe and China, but right here in the United States. This would harm many, many ordinary Americans, not only in the short-term but over the long haul. In a recent post Little Hope and Not Much Change, Financial Armageddon’s Michael Panzner cites a new study which foreshadows the long-term damage which might occur.

The John J. Heldrich Center for Workforce Development at Rutgers University has published an updated working paper, Categorizing the Unemployed by the Impact of the Recession, detailing the results of surveys conducted from August 2009 through  August 2011 of American workers who lost a job during the height of the  Great Recession…

Just 7% of the unemployed initially  contacted by the Heldrich Center in the summer of 2009 have made it back  to where they were before the recession. And just another 23% are  on the way back — they have experienced a minor downward change in their  quality of life that they believe will be temporary. Another third of  those participating in the initial August 2009 survey can be thought of  as downsized. Many here (11%) have taken a minor quality of life hit and  say their financial situation is poor, but believe they will work their  way out of it in time. Another 10% are in at least fair financial shape  but report a minor downward change in their lifestyle they believe will  be permanent.

The remaining 36% speak of cataclysmic  effects of the Great Recession on them and their families. They comprise  two groups, both of whom can be said to have been devastated. We  consider 21% to be devastated because they are in poor financial shape  and have suffered a major quality of life change, even if they believe  it to be temporary. Also included in this group are respondents who  report being in fair economic shape, but who have experienced a major  decline in their lifestyle they expect to be permanent. Finally, there  is a sizeable 15% who appear to have been wrecked by the recession. They  are at the bottom on all three measures — they are in poor financial  shape, have suffered a major change in lifestyle, and believe this new  state of affairs will be a permanent condition.

Even if a new recession is not as severe as the “Great” one, it would still hurt those who are “climbing back,” or who were “downsized” or “devastated” in the aftermath of the financial meltdown in 2008. A new recession would further push millions of Americans into poverty or out of the Middle Class, and these injurious changes could be effectively permanent. So we need to take the prediction of a new recession very seriously indeed.

I’m sorry to tell you about this impending Bad News, but that’s just the way it looks.

Decline of the Empire

I’d take credit for a “spot on” prediction, but unfortunately it’s not that simple.  Let’s first deal with the simple — the headline.

I said +125k +/- 50, and the actual number was +120k.

The unemployment rate fell by 0.4 percentage point to 8.6 percent in November, and nonfarm payroll employment rose by 120,000, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in retail trade, leisure and hospitality, professional and business services, and health care.  Government employment continued to trend down.

Heh, not bad; I pretty much nailed it.  So I can go home with a feather in my cap, right?

Unfortunately not.

There’s a fairly serious problem with the numbers, and it’s not in the headline — it’s in the only number that matters from a fiscal perspective for the government — and there, it’s bad news.  Even worse, there is some real serious misdirection going on in here, me thinks.

Let’s do the charts:

Heh wait a second…. that monthly line (blue dashed) shows a flat to small decline in employment!  How’s that possible?  Let’s look at the “not in labor force” numbers:

So those not in labor force aren’t re-entering the labor force.  That’s not so good; remember that you need about 125,000 people to find jobs a month to keep up with the population.

This led to the following “big picture” chart:

That’s the labor participation rate which is all that matters for the ability of government to collect taxes — since all taxes are paid by people, and if you’re not working, you’re not paying taxes.

And that number, my friends, is down on the month.

Not by a lot, but down.

So what we have here is a report that is nowhere near as strong as it appears.

PS: The original version of this post called the report an outright fabrication.  The BLS site went unavailable for nearly an hour from the time I picked up the figures until I posted the Ticker, and when it was available again the figures were in different places.  Among other things the original data showed a decrease in population, and not a small one either.  I have updated the graphs above from the now-available data tables.  Whether this was an error in their table or in my original pick-up I cannot determine at this point as I did not save the original copy off to local disk.  In any event the report is not strong on a monthly basis and the lack of recovery in the employment rate bodes ill for the ability of the government to continue to spend, which is the “big picture” argument I’ve made since I began this series of reports.

Have you ever been so poor that you had to live in your car?  Have you ever been so low on funds that the only place you could afford to live was a rat-infested motel?  Have you ever spent a night living in a tent city or sleeping in the streets?  If not, you should consider yourself to be very fortunate.  As the recent Black Friday madness demonstrated, there are still lots of Americans that are doing well enough to go on wild shopping sprees, but the reality is that there are also millions of American families that are falling through the “safety net” to a place of total desperation.  In a previous article I talked about the fact that the U.S. Census Bureau recently announced that a higher percentage of Americans is living in extreme poverty than has ever been measured before.  Not only that, 2.6 million more Americans fell into poverty last year.  That was also a new all-time record.  As you read this, one out of every seven Americans is on food stamps and one our of every four U.S. children is on food stamps.  Tens of millions of American families are living on the edge of desperation.  In many communities across the United States, there is so much despair in the air that it is almost tangible.  When you look into the eyes of many Americans these days, it almost seems as if all the hope has been sucked right out of their hearts.  Economic despair is at epidemic levels, and unfortunately the economy is about to get a whole lot worse.

Did you see the report on families that are living in their cars that Scott Pelley did for 60 Minutes the other night?

If you have not seen it yet, I highly recommend that you take a few minutes to check it out.

At one school in Florida alone, Pelley met 15 children who had been living in  their cars.

The following is a brief excerpt from Pelley’s report….

This is the home of the Metzger family. Arielle,15. Her brother Austin, 13. Their mother died when they were very young. Their dad, Tom, is a carpenter. And, he’s been looking for work ever since Florida’s construction industry collapsed. When foreclosure took their house, he bought the truck on Craigslist with his last thousand dollars. Tom’s a little camera shy – thought we ought to talk to the kids – and it didn’t take long to see why.

Pelley: How long have you been living in this truck?

Arielle Metzger: About five months.

Pelley: What’s that like?

Arielle Metzger: It’s an adventure.

Austin Metzger: That’s how we see it.

Pelley: When kids at school ask you where you live, what do you tell ‘em?

Austin Metzger: When they see the truck they ask me if I live in it, and when I hesitate they kinda realize. And they say they won’t tell anybody.

You can view the entire 60 Minutes report below….

Did you ever think that this would happen to America?

What makes things even sadder is that there are millions upon millions of empty homes right now in the United States.

Millions of American families have been foreclosed upon in recent years and home prices keep falling with no end in sight.

In fact, today it was reported that home prices are now the lowest that they have been in eight years.

So why aren’t people renting or buying more homes?

Well, the truth is that you can’t afford a mortgage payment or a rent payment if you don’t have a decent job.

When someone can’t find a good job, then none of the other economic statistics that many of us love to talk about so much really matter.

That is why I write about what is happening to American jobs so often.  Today, big corporations are shipping as many jobs as they can out of the country.  An average of 23 manufacturing facilities were shut down every single day in the United States last year.  Even though our population is rapidly increasing, there are 10 percent fewer middle income jobs in the U.S. today than there were a decade ago.  Until this trend gets reversed, the number of American families living in their vehicles is only going to increase.

Unfortunately, the U.S. economy is about to get even worse.

Today, it was announced that American Airlines has filed for bankruptcy.  Sadly, there will be many more companies filing for bankruptcy during the upcoming economic downturn.

As I wrote about yesterday, we really are on the verge of a major league collapse of the financial system in Europe.

Jim Cramer of CNBC says that because of what is happening in Europe, the global financial system is at “DEFCON 3, two stages from a financial collapse that is so huge it’s hard to get your mind around.”

Unfortunately, Jim Cramer is not exaggerating.  The global economy is heading for a massive amount of trouble if something dramatic is not done immediately.

This is not a drill.  Bert Van Roosebeke, an economist with the Center for European Policy, recently made the following statement about the cold, hard reality now facing Europe….

“We’re actually really running out of money”

Back during the early 1930s, the flow of credit was greatly restricted and that was one of the primary causes of the Great Depression.  Back in 2008, another massive credit crunch just about brought the financial world to its knees.

Well, now it is starting to happen again.  A nightmarish credit crunch has already begun in Europe, and nobody seems to have any answers about how to stop it.

The following comes from an article in the New York Times….

From global airlines and shipping giants to small manufacturers, all kinds of companies are feeling the strain as European banks pull back on lending in an effort to hoard capital and shore up their balance sheets.

The result is a credit squeeze for companies from Berlin to Beijing, edging the world economy toward another slump.

When there is a credit crunch of this magnitude, it causes the money supply to start to shrink.  This is already happening all over Europe as a recent article in the Telegraph noted….

All key measures of the money supply in the eurozone contracted in October with drastic falls across parts of southern Europe, raising the risk of severe recession over coming months.

Right now, we are seeing the money supply in each of the “PIIGS” nations fall at a staggering rate.  The following comes from the same Telegraph article referenced above….

Simon Ward from Henderson Global Investors said “narrow” M1 money – which includes cash and overnight deposits, and signals short-term spending plans – shows an alarming split between North and South.

While real M1 deposits are still holding up in the German bloc, the rate of fall over the last six months (annualised) has been 20.7pc in Greece, 16.3pc in Portugal, 11.8pc in Ireland, and 8.1pc in Spain, and 6.7pc in Italy. The pace of decline in Italy has been accelerating, partly due to capital flight. “This rate of contraction is greater than in early 2008 and implies an even deeper recession, both for Italy and the whole periphery,” said Mr Ward.

Those numbers are really, really bad.

But instead of doing something to prepare for the coming economic crisis, members of the U.S. Congress are focused on stripping even more of our liberties and freedoms away from us.

As I wrote about yesterday, a new law (S. 1867) is being pushed through the U.S. Senate that is extremely frightening.

If this bill becomes a law, the United States of America would officially become part of the “battlefield” in the war on terror, and any American citizen could easily be flagged as a “potential terrorist”.

Once identified as a “potential terrorist”, the U.S. military would be able to arrest you, take you to a foreign prison and detain you for the rest of your life without ever having to charge you with anything.

What in the world is happening to America?

Unfortunately, as the economy gets even worse civil unrest in this country is going to intensify and the thin veneer of civilization that we all take for granted is going to start to disappear.

In response to the coming civil unrest, the U.S. Congress will try to pass laws that will be even more repressive than S. 1867.

Our nation has entered a downward spiral and things are going to become very frightening if this thing is not turned around.

The Economic Collapse

What happens to a debt-dependent economy when it hits the wall of debt saturation? The job market and the very nature of work will change.

What is the future of work in a debt-dependent economy that no longer responds to more debt?  In a word: bleak.

Given the “recovery’s” stagnant job market and the economy’s slide toward renewed contraction, it’s a timely question. To answer it, we must first ask, What is the future of the U.S. economy?

In broad brush, the Powers That Be have gone “all in” on a bet that this  recession is no different than past post-war recessions. All we need to do to get through this “rough patch” is borrow and spend money at the Federal level, and the household and business sectors will soon recover their desire and ability to borrow more and spend it all on one thing or another. We don’t really care what or how, because all spending adds up into gross domestic product (GDP).

In other words, we’re going to “grow our way” out of stagnation and over-indebtedness, just as we’ve done for the past fifty years.

Unfortunately, this diagnosis is flat-out wrong. This is not just another post-war recession, and so the treatment—lowering interest rates to zero and flooding the economy with borrowed money and liquidity—isn’t working. In fact, it’s making the patient sicker by the day.

The best way to eliminate the signal noise of official propaganda (“The stock market is rising, so everything’s great for everyone!” etc.) and the high keening wails of Keynesian cargo cultists is to construct a model of the underlying fundamental forces that will shape the future.

The best way to do that is to glance at a few key charts.

Let’s start with debt.  Clearly, the “growth” of the U.S. economy since 1980 is debt-based. Debt has exceeded growth by 136%. If debt had risen in tandem with GDP, then total debt would be a mere $22 trillion instead of $52 trillion.

The next chart reflects how every incremental increase in debt has had a diminishing effect on growth. Where $1 of debt once added 70 cents to GDP, now it adds basically nothing, or even reduces GDP.

We hear a lot of euphoric babble about households “deleveraging;” that is, paying down debt and thus setting the stage for the next ramp-up of household debt. But the reality is not quite so euphoric. Compared to the explosion in household debt since 1980, which we might term the debt elephant, the recent “deleveraging” reduction in debt is more like a mosquito.

Next, let’s look at jobs and employment. To make sure we’re getting the full picture, let’s look at several measures of employment as a reflection of the underlying economy.

This first chart looks like a steady onward-and-upward trend of job growth. The “jobless recovery” appears to be a modest bump in the road of ever-rising employment.

By other measures, however, employment hasn’t hit a bump in the road; it’s off the road and sinking into a bottomless bog. Here is the civilian participation rate, which measures how many folks in the civilian population are participating in the labor market in one way or another.

By this measure, the labor market has retraced to the level of the 1981-82 recession thirty years ago.

Next, let’s look at another, perhaps even more telling metric: private payrolls per capita, which is basically a measure of how many jobs there are per capita in the economy.

What this means is that beneath the glitter of a “rising GDP” and “rising stock market,” the economy is producing far fewer jobs per capita.

If we look at the total number of civilians and the total number of jobs, the chart looks even uglier. We are back to the levels of 1970s stagflation, just as women began entering the workforce en masse to compensate for declining household purchasing power.

This next chart is civilian employment per capita, which is similar to the previous chart of private payrolls per capita, but includes all jobs, including public-sector/government employment. Once again it shows that the economy is back to the levels of the mid-1980s, even including the rapid expansion of local and state government payrolls.

Another way to measure the real performance of an economy is capacity utilization — how much of the potential capacity of the economy is being used. In good times, capacity is added because the existing capacity is running full-tilt. In recessions, there is not enough demand to use the economy’s full capacity, and therefore no reason to add to capacity with business investment.

I’ve drawn some lines to clarify what happened during each primary phase of the post-war era. During the stagflationary 1970s, capacity utilization see-sawed between growth and recession, tracing out a series of lower lows and lower highs. This downtrend reflected the reality that the economy wasn’t growing; it was stagnating, hitting new lows with every downturn, and never reaching its previous high-point during recovery.

After finally hitting bottom in the 1981-92 recession when Federal Reserve Chairman Paul Volcker vanquished inflation by jacking up interest rates to 18%, the economy entered a 30-year cycle of financialization (deregulation of the banking sector and the rise of debt as the engine of growth), globalization, and technological innovation that fueled a multi-decade trend of rising productivity.

The wheels fell off the financialization and dot-com boom in 2000, and the Federal Reserve and federal government created an even more extreme version of financialization that inflated a gigantic debt/real estate bubble. Like all financial bubbles, this one burst, and once again the Fed and federal government scrambled to inflate another debt bubble.

Since the household sector was tapped out and its primary asset, the family home, had lost a third of its bubble value, the Federal government borrowed $6 trillion to bail out the banking sector and spread trillions of dollars around as stimulus and giveaways like “Cash for Clunkers.”

Unsurprisingly, this injection of trillions of dollars did boost capacity utilization. Roughly 11% of the entire GDP is borrowed and spent every year now by the federal government. But just as in the stagflationary 1970s, the decline reached a new low and the subsequent rise never got close to the previous bubble high of 2006.

Now that the economy is rolling over again, capacity utilization is also declining.

None of this reflects a healthy economy. What it does reflect is an economy that has depended on ever-greater amounts of debt to power a diminishing trend of growth, and an economy which creates fewer and fewer jobs with ever-greater mountains of debt.

This is not a bump in the road; it is the exhaustion of the entire model of  growth that we have depended on for the past 30 years. Once the debt saturation point has been reached, adding more debt subtracts from the economy rather than adds to it. This is reflected in the decline of employment by every metric: total number of jobs, civilian participation, payrolls per capita, and employment as a percentage of the total population.

We are past the point of debt saturation, and so we need a new model of employment, and indeed of “growth” itself. Sadly, as discussed in a recent report, the Status Quo financial witch-doctors have only prescribed more debt and more unproductive friction.

Unfortunately, as the above charts abundantly illustrate, the patient (the U.S. economy) hasn’t been cured; rather, its condition has gotten worse. The stock market is like a sort of makeup that has been slathered on by the Fed to give the appearance of health, but the internal measures of jobs and income (both declining) show that both the “health” and the “recovery” are illusory.

So, the key question to ask ourselves is, Where will the demand for work be in a post-debt, post-”cheap oil” economy”?

In Part II: The Future of Work, we tackle this critical question and provide a framework for potential job seekers/switchers to use in positioning themselves for meaningful and dependable employment in this coming era.

Click here to read Part II of this report (free executive summary; paid enrollment required to access).

This article was first published on Chris Martenson.com as “The Future of Work.”

Charles Hugh Smith – Of Two Minds

It is absolutely amazing how many Americans are still convinced that more “free trade” is the answer to our economic problems.  The truth is that there is a vast difference between “free trade” and “fair trade”, and in this article I will prove that all true conservatives and all true liberals should be completely against the insane trade policies of the federal government.  Yes, we will always need to trade with other nations.  Other nations make or have things that we need to trade for.  Balanced trade relationships with other nations that have similar economies and that share similar values can be very beneficial.  For example, our trading relationship with Canada, though not perfect, is generally beneficial to both sides.  However, the United States also has dozens of trading relationships that are highly destructive to the U.S. economy.  There are some predatory nations that are blatantly and openly cheating and everyone can see it.  They are getting away with bloody murder and they are robbing us blind.  The United States of America is being taken advantage of, and as a result thousands of good businesses are being destroyed and millions of good jobs are being lost.  If you are an American and you are in favor of all of the unfair trade that is currently going on, then either you don’t know much about economics or you actually want to see the U.S. economy be destroyed.

Congress has just passed new free trade agreements with South Korea, Colombia and Panama.  The Obama administration has also made “the NAFTA of the Pacific” a very high priority.

Obama says that all of these new trade pacts will create more U.S. jobs.

Well, either Barack Obama is completely ignorant when it comes to economics or else he is lying.

When we merge our economy with the economies of nations where wages are much lower, it is inevitable that large numbers of jobs are going to leave the high wage areas (where we live) and go to areas where wages are much lower.

It also certainly does not help that we have the highest corporate tax rate in the world, that we burden our businesses with mountains of ridiculous regulations,  and that we allow our “trade partners” to give their businesses a huge advantage by openly subsidizing them.

The way that the system is set up now, nearly all U.S. businesses are at a massive, massive disadvantage.  In general, the only businesses that can compete effectively in this environment are the giant corporations that can offshore huge portions of their operations.

If you are a conservative, then there is no way that you should support our current trade policies.  If you are a liberal, then there is no way that you should support our current trade policies.

However, if you are a “George W. Bush Republican” or a “Clinton/Obama Democrat” that believes in globalism and the establishment of a one world economy as part of a “New World Order”, then it would make sense why you would want to see America deindustrialized and brought down to the level of the rest of the world.

But if you are a true conservative or a true liberal, then the following are reasons why you should be horrified by our current trade policies….

#1 Other Nations Openly Manipulate Their Currencies In Order To Gain A Significant Competitive Advantage

For example, China keeps its currency set at a super low level relative to the U.S. dollar.  By doing this, their products are far cheaper than U.S. products, and U.S. businesses cannot compete with them.  This has resulted in the death of large numbers of U.S. businesses and the loss of millions of U.S. jobs.

So just how bad is this problem?  Well, a recent CNN article stated the following….

Critics of China’s policy estimate that the yuan is still undervalued by 25% to 40%, even with the recent rises in value.

The other day the U.S. Senate passed a bill that would impose tariffs on currency manipulators, and China has already retaliated, even though the bill has not become law yet and even though it almost certainly won’t.

China plays hardball.  They love the advantage that they are getting right now and they do not plan on losing it.

#2 Millions Of Good Paying Jobs Have Been Shipped Overseas And They Are Never Coming Back

Our politicians all try to tell us how good they are at creating jobs.

But what is the truth?

The truth is that a total of zero jobs were created last decade.  The following is a quote from a recent article in Washington Monthly….

“If any single number captures the state of the American economy over the last decade, it is zero. That was the net gain in jobs between 1999 and 2009—nada, nil, zip. By painful contrast, from the 1940s through the 1990s, recessions came and went, but no decade ended without at least a 20 percent increase in the number of jobs.”

Last decade we opened up our trade with the rest of the world more than ever before.  But instead of creating jobs it destroyed them.  Our trade deficits exploded and unemployment skyrocketed.

The Economic Policy Institute says that since 2001 America has lost approximately 2.8 million jobs due to our trade deficit with China alone.

So if you are unemployed, that is probably what happened to the job you are supposed to have.

It went overseas and it is not coming back.

#3 America Is Being Deindustrialized At A Blistering Pace Thanks To Globalism

The advocates of “free trade” cannot dispute the cold, hard facts….

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

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

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

*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.

*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.

#4 (For Conservatives) True Conservatives Should Be Horrified That We Are Being Taken Advantage Of By A Hardcore Communist Nation That Hates Us

Ronald Reagan would have never engaged in “free trade” with the Soviet Union.  The Communist Party is in complete control of China and while we may regard China as a “frenemy”, they really do believe that they will totally defeat us someday.  If you doubt this, just read what the top generals and politicians in China are writing.

It is so incredibly stupid what we are doing.  Our trade relationship with China has enabled the largest communist economy in the world to go from third world status to superpower status.  China is now the second largest economy in the world, and that would have never happened without our help.

A lot of people like to talk about how “capitalist” China is becoming, but the truth is that they have never wavered from their pure belief in communism.  7 of the 10 largest corporations in China are owned by the government.

A host of other corporations in China are very deeply subsidized by the government.

U.S. businesses have a very hard time competing with foreign businesses that are deeply subsidized by their own national governments.

It is called cheating, and we let other countries get away with it.

So our businesses die and their products fill up our store shelves.

#5 We Are Endangering Our National Security By Greatly Enriching Our Biggest Potential Enemies

The biggest threats to the United States are not some goat herders hiding out in the caves of Afghanistan.

The biggest threats to the United States are actually China and Russia.

Conservatives are supposed to be the ones that are so concerned about national security.  But instead of expressing concerns about China, they just keep pushing for more free trade.

As a result, China has been able to become a true global military superpower.

Someday we will deeply, deeply regret that.

#6 China Brazenly Steals Technology From Anyone And Everyone That They Can

China gets away with bloody murder when it comes to stealing technology.  They will do it “legally” if they can, and they will do it in “other ways” if they have to.

At this point, China has invented a whole host of ways to extract technology from any firms that wants to do business in China.

The following is a short excerpt from a recent article on CNN….

Foreign companies are often required to set-up joint ventures with Chinese firms before the can start doing business there. And China is instituting new “indigenous innovation” rules that U.S. companies say force them to transfer their own technology to their Chinese partners.

#7 We Should Never Trade With Any Nation That Has A “One Child” Policy

China has a very strict “one child policy” which should be absolutely abhorrent to all Americans.

Most Americans have no idea what is really going on over in China.  The following is from a recent article in the Epoch Times….

Pregnant women lacking birth permits are hunted down like criminals by population planning police in China and forcibly aborted.

All over China, mobile abortion vans are used to help enforce the one child policy.  What women in China must endure is absolutely sickening, and this kind of behavior should never be accepted in the global community.

But instead of penalizing China, we reward them for this behavior.  They even get awards at the United Nations for it.

Look, conservatives are supposed to be pro-life.  If you are a social conservative, then it goes against everything that you believe to support trade with China.

You can support trade with China if you want, but then don’t even try to call yourself “pro-life” again.

We should never trade with any nation that has a “one child policy”.  Such a policy is against everything that America is supposed to stand for.

#8 Our Horrendous Trade Imbalance Has Allowed Other Nations To Accumulate Gigantic Amounts Of Our Debt

Every month, we send much more money to the rest of the world than they send to us.  One thing that those other nations are doing with all of that money is that they are buying up our debt.

Our trade deficit with China has enabled them to accumulate nearly a trillion dollars of our debt.  This gives them tremendous leverage over us and is a very serious threat to our economy and to our national security.

So now China can threaten the stability of our financial system with just a phone call.

#9 Globalist Trade Institutions Are A Serious Threat To Our National Sovereignty

Today, the “global economy” is governed by globalist institutions such as the G20, the WTO, the IMF and the World Bank.  The United States has given up huge amounts of national sovereignty to these organizations.

If you are a true conservative, this should greatly disturb you.

We don’t want faceless international bureaucrats telling us what our trade policies will be.  But to a large degree that is the situation that we have gotten ourselves into.

#10 Liberals (And All Americans) Are Supposed To Care About What Is Best For American Workers

Millions of working class jobs have been shipped overseas, and yet Barack Obama just keeps pushing for more “free trade” agreements which will make the problem even worse.

But instead of screaming bloody murder, liberals keep on supporting Obama.

It’s disgusting.

The truth is that the Obama administration actually says that there are certain kinds of jobs that we “don’t want” in the United States.

For example, the following is what U.S. Trade Representative Ron Kirk recently told Tim Robertson of the Huffington Post about the Obama administration’s attitude toward keeping manufacturing jobs in America….

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.

So where is the outrage?

Is anyone even awake out there?

Even the construction of many of our roads and bridges is being outsourced to China.  Just check out the following quote from a recent ABC News article….

In New York there is a $400 million renovation project on the Alexander Hamilton Bridge.

In California, there is a $7.2 billion project to rebuild the Bay Bridge connecting San Francisco and Oakland.

In Alaska, there is a proposal for a $190 million bridge project.

These projects sound like steps in the right direction, but much of the work is going to Chinese government-owned firms.

“When we subsidize jobs in China, we’re not creating any wealth in the United States,” said Scott Paul, executive director for the Alliance for American Manufacturing.

Liberals are supposed to be working to defend the working class.

So why won’t they openly go after Obama on these issues?

Our unfair trade agreements have put American workers in direct competition for jobs with the cheapest labor on the globe.

Until this is fixed, you will continue to hear a “great sucking sound” as millions of jobs continue to leave the United States and go to places where labor is ten to twenty times cheaper.

It is insanity what we are doing.  We allow big corporations to send their manufacturing offshore and also to ship their products back into the United States for free.

Where in that equation is good news for the American worker?

#11 Liberals (And All Americans) Should Be Horrified By The Exploitation Of Slave Labor Around The Globe

All over the globe, workers toil in nightmarish conditions for slave labor pay just so that Americans can feed their addiction for cheap foreign products.

Big corporations and collectivist governments such as China are getting unbelievably rich by exploiting this slave labor pool.

Get educated about this and find out the truth.  It just might totally change the way that you view “free trade”.

#12 Liberals (And All Americans) Should Be Horrified By The Damage To The Environment Our Trade Relationships Cause

Liberals are supposed to deeply care about the environment.  But our trade relationship with nations on the other side of the globe result in thousands of factories and businesses leaving our shores and ending up in countries where the environmental regulations are not nearly as strict.  In fact, nations such as China are a complete and total environmental nightmare at this point.  If liberals truly cared about the environment they would want to keep factories and businesses here.

#13 Very Dangerous Products Continue To Flood Into This Country From Overseas

Isn’t product safety supposed to be a big thing for liberals?  Today, a huge percentage of the products we buy are made outside the United States far from the watchful eyes of our regulatory agencies.  Over the past couple of years, there has been headline after headline about dangerous products made in China.  The following is just one example of this: 10 Babies Die Mysteriously At Fort Bragg: Toxic Drywall From China Used In Base Homes The Culprit?

#14 The Globalization Of The Economy Causes Income Inequality To Grow

By paying slave labor wages to workers overseas, the big corporations are becoming very wealthy.  At the same time, that means that there are much fewer jobs for average working class Americans, and wages for the jobs that remain are pushed down because of increased competition for jobs.

So the rich get richer and the poor get poorer.

If you don’t believe that income inequality in the United States has become a huge problem, just check out this chart.

#15 Because Of All Of The Cheating And All Of The Predatory Behavior That Is Going On, Our Trade Relationships Have Become Incredibly Imbalanced

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

So how is that even close to “fair”?

Our store shelves are absolutely packed with stuff from China.

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

Even in high technology products we are being destroyed.  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.

#16 Our Gigantic Trade Deficit Is Destroying Our National Wealth

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.

Our gigantic trade deficits are making us poorer as a nation each and every month.  Each year, somewhere around half a trillion dollars of our national wealth gets transferred out of the United States.  That half a trillion dollars could be going to support U.S. businesses and U.S. jobs.  Taxes could be paid on that half a trillion dollars.  But instead it leaves the country and makes other nations wealthier.

#17 The Globalization Of The Economy Has Caused Unemployment In The United States To Explode

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.

#18 As Our Cities Are Deindustrialized, Many Of Them Are Being Transformed Into Absolute Hellholes

The other day, I wrote the following about what is happening in cities and towns across the United States….

All across America there are cities and towns that were once prosperous and beautiful that are being transformed into absolute hellholes.  The scars left by the long-term economic decline of the United States are getting deeper and more gruesome.

#19 Without Good Jobs, An Increasing Number Of Americans Are Having To Turn To Government Assistance

We are going to support U.S. workers one way or another.  Either we are going to provide them with good jobs, or we are going to let their jobs be shipped out of the country and we are going to pay for the government to feed and house them.

Today, there are more than 45 million Americans on food stamps.  That number has gone up by more than 70 percent since 2007.  Almost every single month we set a new all-time record for the number of people being fed by the federal government.

#20 If Nothing Is Done, All Of This Is Going To Get A Lot Worse

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

Can you imagine what America is going to look like if that happens?

**********

Okay, so in light of all of that information, can anyone out there defend the current “free trade” policies of the federal government?

The Economic Collapse

America, you’re being destroyed from within.  And you don’t even know it.  If you want to know why you lost your job, you better pay attention to what OUR government is doing to you…but not just to the poor American who is now unemployed, you Americans working are FUNDING the literal destruction of your fellow Americans’ jobs.  If you’re paying Medicare taxes (and all of us who are working are doing that), then you are directly kicking a fellow American out of his job.  How the hell can this be?  Well…..

Medicare and Medicaid money have been used to outsource American jobs, and US workers say they were fired and discriminated against by a healthcare insurance company funded solely by federal funds, according to a suit filed in Los Angeles Superior Court.

 By way of Molina, several billion of UStaxpayer’s dollars have gone directly to India without any benefit to theAmerican company or the US taxpayer,” the suit states.

The suit, filed on behalf of more than 50 employees, alleges Molina Healthcare Inc. used federal money, defrauded the federal government, failed to pay overtime, discriminated, terminated and violated numerous federal and state labor codes. Molina collected over $9 billion in federal funds in the last three years, the suit states.

‘Since 2006, Molina has spent a large portion of the taxpayer’s money to fire American workers and to hire an abundance of workers brought in from India.

The suit further claims:

… in or around 2007 and 2008, Molina terminated approximately 100 American workers in various states to make room for 100 laborers from India to handle all Molina’s US business operations involving Medicare and Medicaid claims … Molina then billed the US government for the cost it incurred by importing workers from India.

The suit, filed in Los Angeles Superior, alleges Molina used a H1-B visas to bring the workers into the US. “This case is not about illegal or undocumented workers,” the suit states.

To bring in workers from India, the suit alleges Molina used a Cognizant Technology Solutions, a California-based recruiting company, and further claims Cognizant “had to provide false statements to the federal government because Cognizant had to certify there were ‘no qualified United States citizens.” On Jan. 13, 2010, the US Dept. of Labor approved Cognizant’s application for 40 H1-B visa holders from India to work for Molina, in the middle of a recession when many American workers were seeking jobs.

Cognizant imports H1-B employees almost exclusively for India and leases said employees to United States employers … Cognizant has received billions of dollars through it’s business practices … and has displaced millions of of competent US workers from their jobs.

“The recession in the United States made it a virtual certainty that there were US workers available,” the claim states.  They were hired at $50,000 a year without benefits. To file the federal government claim, Cognizant certified that it searched and could find no qualified American applicants (or green card holders) to fill job openings for programmers and security analysts for the same pay.

On Jan. 14, the day after the application was approved by the Labor Department, Molina fired 40 workers – programmers, managers and security analysts, the suit states. Most fired employees earned between $75,000 and $100,000 a year with benefits. Employees listed in the lawsuit also claim the Indian managers allowed the celebration of India’s holidays, but not US holidays and ‘actively discouraged US workers from celebrating US holidays and traditions,” such as Fourth of July, Thanksgiving and Christmas, by assigning mandatory work that required working holidays.

The suit seeks unspecified damages against Cognizant, Molina and several Indian managers.

Your government is intentionally destroying American jobs to enrich certain preferential corporations and using taxpayer money to do so.  Are you beginning to understand WHO the criminals are?  And just to be clear, the politicians involved are both Republican and Democrat.

Wade Booth-Corona – FedUpUSA

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