A little under 2 years ago when people stopped being naive and finally admitted we were in a recession I had a pretty interesting talk with a friend of mine. He claimed that President Obama had “fixed” our economy and that the recession was over. Now of course he was getting all his information from this Administrations own website, so obviously I knew he didn’t know what he was talking about. But here we are, now 2 years later, and it still seems as if our country hasn’t made any progress whatsoever on any type of “economic recovery.” In fact, if you follow the numbers like I do, than you know all too well that things have gotten much worse. The following list could have been over 100 reasons long but I narrowed it down to the top 10 statistics that show our economy is not recovering.
- Unemployment continues to get worse and worse each month. In July the United States lost more than 131,000 jobs. The debt that the government keeps accumulating while trying to inject a stimulus into our economy does little to nothing when it comes to fixing our long term problems. Any expert will tell you that the driving force behind our economy is consumer spending. In our case, the consumers no longer have good employment so how can we expect them to spend any money which will in-turn truly stimulate the economy. The sad fact is that America has lost nearly 10.5 million jobs since 2007, and most of these losses occurred between 2008 and 2010.
- Not only are Americans out of work but they are now finding it harder to re-enter the work force. It now takes the average American over 35 weeks to find employment in today‘s job market. If this sounds abnormally high don’t worry because you’re not crazy. This is a record high for our job market.
- The US trade deficit in June reached its widest point in the past 20 months on the rising imports and weakening exports – an indication of a slow economic recovery. Don’t worry though, our President has put raising the US exports as a high priority on his agenda. His administration plans on doubling exports within the next 5 years to about USD $3.1 trillion. However, it is anyone’s guess as to how they plan on doing this seeing as how our manufacturing sector, which in the past has been our strongest export base, has been gutted over the last 30 years thanks to globalization.
- This year will mark for the first time in over 20 years that Social Security will pay out more this year than it receives in payroll taxes. This hasn’t happened since 1983 when the Reagan administration overhauled the program in response to the social security crisis. When the Social Security program started there were over 10 workers for every retiree. Now with the baby-boomer generation reaching the age of retirement and unemployment and underemployment as high as it currently is, there are only 3.2 workers for every retiree. Experts estimate by 2017 there will only be 2 workers for every retiree.
- Home foreclosures have continued to rise in 2010. However, there has been a shift. Back in 2007 and 2008, experts told us that most foreclosures were due to toxic mortgages. People were being suckered into mortgages that they couldn’t afford with “teaser rates” or with payments that would dramatically escalate after a few years, and when those mortgages reset, the people who had agreed to them no longer could make the payments. Now the trends in foreclosures seem to be tied more to unemployment than unethical bank practices. According to RealtyTrac spokesman Rick Sharga, unemployment has replaced bad loans as the number one cause of foreclosures there…
Las Vegas has seamlessly shifted from having a high level of foreclosures due to bad loans to defaults caused by a high level of unemployment.
This is not just a trend in urban areas like Las Vegas or Chicago, this is a national crisis that effects all middleclass home owners from coast to coast. According to the Mortgage Bankers Association, over 10% of homeowners have missed at least one mortgage payment during the January to March period. This figure is an all-time record high and ever supersedes the figure of 9.1% a year ago.
- Now more than ever it seems to be a terrible time to be a college graduate. Not only is the job outlook bleak, but now more than ever college students are relying on loans to finance their education. Obviously this leaves students with a burden of debt to pay off after their graduation, but this burden can translate into other problems for grads with a good deal of debt. According to a survey done by Alliance Bernstein, College grads with over $20,000 or more of debt are more likely to experience a variety of problems than those grads who have no debt. Grads with debt are twice as likely to live paycheck to paycheck, sell personal possessions to “make ends meet”, delay life milestones like buying a house or having a child, and are more likely to experience psychological problems like depression and anxiety. This cycle of debt has not stopped more students from taking out loans though, as more students than ever before are entering college thanks to high-interest loans.
- Last May the number of Americans receiving food stamps rose to the all-time high of 40.8 million people. This rise continued from last year where 19% less Americans were receiving aid at the time. In fact, over the last 18 months we have seen consecutive record setting numbers of Americans receiving food aid from the government. Even worse news is the outlook for the future of food stamps. According to U.S government estimates, the number of Americans that receive food stamps could be as high as 43.3 million by 2011.
- It has been very hard to ignore the increase in American debt over the last decade. According to Erskine Bowles, one of the heads of Obama’s national debt commission, the national debt could be as high as $13.6 trillion by the end of 2010. This would mean that the government would have to spend at least $700 billion on interest on that debt alone. If we go by government estimates, the national debt could be as high as $19.6 trillion by 2015. But at least the executives at AIG, Goldman Sachs, and JP Morgan Chase still get their multi-billion dollar bonus right?
- America still seems to be one of the wealthiest countries in the world right? Too bad that wealth has been increasingly concentrated at the top of our population over the last 30 years. Not since 1929 has the gap between rich and poor been so apparent. Back in 1929, two hundred of the biggest corporations controlled 50% of the nation’s corporate wealth. In 1928, the top 1% of the population had incomes 650% greater that the bottom 10% of Americans. During the early part of the 1900’s, relaxed regulation allowed corporations and investment houses to expand and consolidate into “too-big-to fail” mega-corporations . Sound familiar? What we are seeing now is a wealth transfer on an epic proportion and this is not the first time we have seen this happen. The first great wealth transfer happened sometime between 1900 and 1928 right before the first Great Depression. The corporate class took advantage of relaxed corporate regulation and labor regulation that in the past kept them from exploiting the rest of the population. Look at the chart below and you will notice that the Great Depression subsided sometime around the introduction of revolutionary banking regulations and progressive tax rates that occurred in the 1930’s. Fast forward to the 1980’s and the Reagan Administration introduced the same policies of deregulation that started the second great wealth transfer. And just like the past, when you have an increased wealth gap and unregulated mega-corporations, depression will soon follow.
- The U.S. dollar continues to rapidly decline in value. This is a natural consequence when a fiat currency that is backed by nothing is introduced into an economy An item that cost $20.00 in 1970 would cost you $112.35 today. An item that cost $20.00 in 1913 would cost you $440.33 today.
I could go on and on but I feel like I’m getting too depressed already. The economy is not “recovering” and our politicians in Washington have done absolutely nothing to aid in any type of recovery. Our economy is not getting better. Our economy is dying, and no matter what temporary stimulus this government introduces they will never be able to prevent the inevitable complete collapse of the U.S economy.
