This “Economic Recovery” Is About To End and More Pain Is About To Begin
Michael Snyder: Not so fast. Those that are publicly declaring that an economic recovery has arrived are ignoring a whole host of numbers that indicate that the U.S. economy is in absolutely horrendous shape. The truth is that the health of an economy should not be measured by how well the stock market is doing. Rather, the truth health of an economy should be evaluated by looking at numbers for things like jobs, housing, poverty and debt. Some of the latest economic statistics indicate that unemployment is getting a little bit worse, that the housing market continues to deteriorate, that poverty in America continues to soar and that our debt problem is worse than ever. If we were truly experiencing the kind of economic recovery that the United States has experienced after every other post-World War II recession we would see a sharp improvement across the board in most of our economic statistics. But that simply is not happening. Sadly, this is about as much of an “economic recovery” as we are going to get because soon the economy will be getting much worse. So enjoy this period of relative stability while you can.
The Obama administration would have us believe that unemployment in the United States has declined, but the truth is that the percentage of working age Americans that are employed has stayed very, very flat for more than two years and now there are some measures of unemployment that are actually getting worse.
For example, according to Gallup the unemployment rate in the United States has risen from 8.5% in December to 8.6% in January to 9.1% in February. The Obama administration would have us believe that it is actually going the other direction.
Initial unemployment claims are rising again. For the week ending March 3rd, they increased by 8,000 over the previous week to 362,000. This is not the kind of good news that people were hoping for.
What the U.S. economy could really use are millions of good jobs. But those are being shipped out of the country at a staggering pace.
Right now there are millions of Americans in their prime working years that are sitting at home wondering what to do with their lives. The average duration of unemployment in the United States continues to hover near a record high, and if we were truly experiencing an economic recovery it should have been falling by now.
But a lot of Americans have bought into the propaganda about an economic recovery and they are out running up huge amounts of debt once again. In January, consumer credit increased by much more than expected. The following is from a recent Reuters report….
Nonrevolving credit, which includes auto loans as well as student loans made by the government, rose $20.723 billion during the month. That was the biggest increase in dollar terms since November 2001, when credit was surging in the wake of the September 11 attacks in New York and Washington.
Don’t fall into the trap of debt slavery. During the last recession millions of Americans lost their homes and most of what they owned because they got overextended.
Don’t do it.
The U.S. housing market continues to deeply struggle as well. If we were really in an economic recovery housing would be bouncing back. But that is not happening. Just consider the following facts….
*The number of new homes sold in the United States continues to hover near a record low.
*U.S. home prices in the 4th quarter of 2011 were four percent lower than they were during the 4th quarter of 2010.
*According to CoreLogic, 22.8 percent of all homes with a mortgage in the United States were in negative equity as of the end of the 4th quarter of 2011. That was an increase from 22.1 percent in the third quarter.
Why are things still getting worse for the U.S housing market?
That is a really good question.
We should have seen some improvement by now.
But it isn’t happening.
Also, poverty in America continues to explode.
For example, the number of Americans on food stamps has increased to 46.5 million – a brand new all-time record.
If we really were in an economic recovery, wouldn’t that number be going down?
We should be thankful that the U.S. economy is not declining as rapidly as it was during 2008 and 2009. But what we are experiencing right now is not an economic recovery. It is simply just a bubble of false hope.
The big problem is that our nation is covered in an ocean of constantly expanding debt.
U.S. consumers are drowning in debt, U.S. businesses have pushed debt levels to the red line, and the U.S. financial system is massively overleveraged.
Of course government debt is our biggest debt problem of all.
All over the nation, state and local governments are on the verge of financial ruin.
If we were in the middle of an economic recovery, so many states would not be in crisis mode. A recent article in the Los Angeles Times declared that “California could run out of cash in March“. As the economy continues to crumble we are going to hear a lot more of this kind of thing.
A lot of local governments around the nation are on the verge of total financial collapse. Stockton, California has announced that they will be defaulting on some debt payments, and Suffolk County in New York recently declared a fiscal emergency after discovering that it would rack up more than 500 million dollars of debt between 2011 and 2013.
Keep your eyes open for more news items like this in the months ahead.
Of course the biggest problem of all is the U.S. national debt and it continues to rapidly get worse.
According to the Congressional Budget Office, the U.S. government had a budget deficit of 229 billion dollars in the month of February. That is the worst one month budget deficit in the history of the United States.
The Congressional Budget Office also says that the U.S. government is now borrowing 42 cents of every single dollar that it spends.
The U.S. national debt has gotten more than 59 times larger since 1950.
The U.S. national debt is now more than 22 times larger than it was when Jimmy Carter became president.
Are there any words in the English language that are strong enough to describe how foolish we have been?
Of course we won’t be able to accumulate so much debt indefinitely. At some point the trillion dollar deficits will stop and our false prosperity will disappear.
If you want to get an idea of what happens then, just take a look at Greece.
But Barack Obama and most members of the U.S. Congress don’t really care about what they are doing to our future.
What they care about is winning the next election so that they can continue living their fabulous lives.
Barack Obama is supposed to be taking care of the American people, but instead he has been very busy taking care of the people who helped him get elected. Politics in America is all about money. Just check out the following very short excerpt from a recent article in the Washington Post….
More than half of Obama’s 47 biggest fundraisers, those who collected at least $500,000 for his campaign, have been given administration jobs. Nine more have been appointed to presidential boards and committees.
At least 24 Obama bundlers were given posts as foreign ambassadors, including in Finland, Australia, Portugal and Luxembourg. Among them is Don Beyer, a former Virginia lieutenant governor who serves as ambassador to Switzerland and Liechtenstein.
Washington D.C. is deeply corrupt and if you are waiting for our politicians to fix our problems you are going to be deeply disappointed.
The federal government is not going to save you.
Our politicians are not going to save you.
You better figure out how you are going to take care of yourself and your family in the years ahead because this is about as good as things are going to get.
This “economic recovery” is about to end and more pain is about to begin.
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Michael has an undergraduate degree in Commerce from the University of Virginia and a law degree from the University of Florida law school. He also has an LLM from the University of Florida law school. Michael has worked for some of the largest law firms in Washington D.C., but now is mostly focus on trying to make a difference in the world.