Random ruminations from your resident curmudgeon...
For some time, I have been telling you that the numbers that we get on T.V. and the proclamations from the media talking heads and government officials as to the state of our economy should be taken with a grain of salt.
A very large grain of salt.
Now I want to share an article with you from Michael Snyder of the Economic Collapse blog. Snyder gives you the same information that I have been sharing and makes a cogent case that things are so rosy in our economy.
Here is his blog:
If you believe that
ignorance is bliss, you might
not want to read this article. I am going to dispel the notion that
there has been any sort of “economic recovery”, and I am going to show
that we are much worse off than we were just prior to the last economic
crisis. If you go back to 2007, people were feeling really good about
things.
Houses were being flipped like crazy, the stock market was booming and unemployment was relatively low. But then the financial crisis of 2008 struck, and for a while it felt like the world was coming to an end.
Of course it didn’t come to an end – it was just the first wave of our problems.
The waves that come next are going to be the ones that really wipe us out.
Unfortunately, because we have experienced a few years of relative
stability, many Americans have become convinced that Barack Obama, Janet
Yellen and the rest of the folks in Washington D.C. have fixed whatever
problems caused the last crisis. Even though all of the numbers are
screaming otherwise, there are millions upon millions of people out
there that truly believe that everything is going to be okay somehow.
We never seem to learn from the past, and when this next economic
downturn strikes it is going to do an astonishing amount of damage
because we are already in a significantly weakened state from the last
one.
For each of the charts that I am about to share with you, I want you
to focus on the last shaded gray bar on each chart which represents the
last recession. As you will see, our economic problems are
significantly worse than they were just before the financial crisis of
2008. That means that we are far less equipped to handle a major
economic crisis than we were the last time.
#1 The National Debt
Just prior to the last recession, the U.S. national debt was a bit
above 9 trillion dollars. Since that time, it has nearly doubled. So
does that make us better off or worse off? The answer, of course, is
obvious. And even though Barack Obama promises that “deficits are under
control”,
more than a trillion dollars
was added to the national debt in fiscal year 2014. What we are doing
to future generations by burdening them with so much debt is beyond
criminal. And so what does Barack Obama want to do now? He wants to
ramp up government spending and increase the debt even faster. This is
something that I covered in my previous article entitled “
Barack Obama Says That What America Really Needs Is Lots More Debt“.
#2 Total Debt
Over the past 40 years, the total amount of debt in the United States
has skyrocketed to astronomical heights. We have become a “buy now,
pay later” society with devastating consequences. Back in 1975, our
total debt level was sitting at about 2.5 trillion dollars. Just prior
to the last recession, it was sitting at about 50 trillion dollars, and
today we are rapidly closing in on 60 trillion dollars.
#3 The Velocity Of Money
When an economy is healthy, money tends to change hands and circulate
through the system quite rapidly. So it makes sense that the velocity
of money fell dramatically during the last recession. But why has it
kept going down since then?
#4 The Homeownership Rate
Were you aware that the rate of homeownership in the United States
has fallen to a 20 year low? Traditionally, owning a home has been a
sign that you belong to the middle class. And the last recession was
really rough on the middle class, so it makes sense that the rate of
homeownership declined during that time frame. But why has it continued
to steadily decline ever since?
#5 The Employment Rate
Barack Obama loves to tell us how the unemployment rate is “going
down”. But as I will explain later in this article, this decline is
primarily based on accounting tricks. Posted below is a chart of the
civilian employment-population ratio. Just prior to the last recession,
approximately 63 percent of the working age population of the United
States was employed. During the recession, this ratio fell to below 59
percent and it stayed there for several years. Just recently it has
peeked back above 59 percent, but we are still very, very far from where
we used to be, and now the next economic downturn is rapidly
approaching.
#6 The Labor Force Participation Rate
So how can Obama get away with saying that the unemployment rate has
gone down dramatically? Well, each month the government takes thousands
upon thousands of long-term unemployed workers and decides that they
have been unemployed for so long that they no longer qualify as “part of
the labor force”. As a result, the “labor force participation rate”
has fallen substantially since the end of the last recession…
#7 The Inactivity Rate For Men In Their Prime Working Years
If things are “getting better”, then why are so many men in their
prime working years doing nothing at all? Just prior to the last
recession, the inactivity rate for men in their prime working years was
about 9 percent. Today it is just about 12 percent.
#8 Real Median Household Income
Not only is a smaller percentage of Americans employed today than
compared to just prior to the last recession, the quality of our jobs
has gone down as well. This is one of the factors which has resulted in
a stunning decline of real median household income.
I have shared these next numbers before, but they bear repeating. In
America today, most Americans do not make enough to support a middle
class lifestyle on a single salary. The following figures come directly
from
the Social Security Administration…
-39 percent of American workers make less than $20,000 a year.
-52 percent of American workers make less than $30,000 a year.
-63 percent of American workers make less than $40,000 a year.
-72 percent of American workers make less than $50,000 a year.
We all know people that are working part-time jobs because that is
all that they can find in this economy. As the quality of our jobs
continues to deteriorate, the numbers above are going to become even
more dismal.
#9 Inflation
Even as our incomes have stagnated, the cost of living just continues
to rise steadily. For example, the cost of food and beverages has gone
up nearly 50 percent just since the year 2000.
#10 Government Dependence
As the middle class shrinks and the number of Americans that cannot
independently take care of themselves soars, dependence on the
government is reaching
unprecedented heights.
For instance, the federal government is now spending about twice as
much on food stamps as it was just prior to the last recession. How in
the world can anyone dare to call this an “economic recovery”?
So you tell me – are things “getting better” or are they getting worse?
Snyder makes some compelling points that all of us would be wise to keep in mind the next time you turn on the television and hear someone say everything is fine and getting better.
It's not.
And that, my friends, is my view.
