Many of Us Will Never See “Happy Days Are Here Again” Again
The spiral into insolvency continues, despite government’s efforts to make you believe that there is a recovery. At this point, this country is too far gone. It is mathematically impossible to service the debt. Furthermore, the debt burden makes it impossible to regenerate reasonable economic growth. The end has been determined, only the timing remains to be known.
For politicians (and it does not matter which party), the only remaining strategy is to use bailing wire to hold matters together from one election to the next. Unfortunately, the supply of bailing wire is now scarce. Will we last until November 2012 before a financial collapse or some other event uncovers the fraud? That is hard to tell, but the postponement of reality is all that drives the political approach to economic policy.
The employment report this past week showed a substantial rise in new hires, although it was not enough to reflect a true recovery. The mainstream media, desperate for some good news in order to support their candidate Barack Obama, trumpeted the results as an inflection point in the economic “recovery.” There is no economic recovery! Nor will there be one until an economic collapse of historical magnitude occurs.
The increased hiring is welcome, but do not believe it is indicative of a turnaround. The drop in the unemployment rate has been highlighted “the lowest in three years.” Few choose to point out the games played in the measurement of this rate or bother to cite the incongruity of how another 1.2 million workers left the workforce last month. (Here is Rick Santelli’s take.)
The stock market, no longer an investment vehicle but a large roulette wheel, took off roaring in anticipation of “happy times are here again.” Do not be fooled by this burst of euphoria. Nothing has changed other than the pulse beats of the gamblers.
Lets try to put matters into a bit more perspective. Here are three excerpts from some dissenters to Friday’s euphoria:
1. From Economic Collapsecomes this devastating collection of statistics as to what has happened to in this country:
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.
#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.
Of course Ponzi schemes like the above cannot go on forever. Indeed, it is amazing that they have reached the current stages of absurdity. Economic Collapse briefly describes how it will end:
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?
2. So when you are told the economy is getting better, ask whatever delusional proponent proclaiming its recovery a few of these questions from Economic Collapse:
If the economy is getting better, then why are there 6 million less jobs in America today than there were before the recession started?
If the economy is getting better, then why is the average duration of unemployment in this country close to an all-time record high?
If the economy is getting better, then why has the number of homeless female veterans more than doubled?
If the economy is getting better, then why has the number of Americans on food stamps increased by 3 millionsince this time last year and by more than 14 million since Barack Obama entered the White House?
If the economy is getting better, then why has the number of children living in poverty in America risen for four years in a row?
If the economy is getting better, then why is the percentage of Americans living in “extreme poverty” at an all-time high?
If the economy is getting better, then why is the Federal Housing Administration on the verge of a financial collapse?
If the economy is getting better, then why do only 23 percent of American companies plan to hire more employees in 2012?
If the economy is getting better, then why has the number of self-employed Americans fallen by more than 2 million since 2006?
If the economy is getting better, then why did an all-time record low percentage of U.S. teens have a job last summer?
If the economy is getting better, then why does median household income keep declining? Overall, median household income in the United States has declined by a total of 6.8% since December 2007 once you account for inflation.
If the economy is getting better, then why has the number of Americans living below the poverty line increased by 10 million since 2006?
If the economy is getting better, then why is the average age of a vehicle in America now sitting at an all-time high?
If the economy is getting better, then why are 19 percent of all American men between the ages of 25 and 34 living with their parents?
If the economy is getting better, then why does the number of “long-term unemployed workers” stay so high? When Barack Obama first took office, the number of “long-term unemployed workers” in the United States was approximately 2.6 million. Today, that number is sitting at 5.6 million.
3. From the perspective of Graham Summers of Phoenix Capital Research:
If this doesn’t worry you, you need to start looking at the actual numbers in the financial system today. Here are just a few worth considering:
1) US commercial banks currently sit atop $248 TRILLION in derivatives
2) The US Federal Reserve is now buying 91% of all long-term new US debt issuance (at the same time China and Russia are dumping US bonds)
3) Japan already spends roughly half of its annual -tax revenues on debt payments and has relied on debt issuance more than tax revenues to fund its budget for four years now (how much longer can this last?)
4) Europe’s entire banking system is leveraged at 26 to 1 (Lehman Brothers was leveraged at 30 to 1 when it failed)
Folks, bad times are coming. It doesn’t matter what the trading programs or “professionals” thinking about it… the math simply doesn’t add up to us having a calm, profitable time in the markets over the next few years.
Friday was a nice day in the stock market. There may be more, although I cannot imagine why. All of the Madison Avenue glitz pales in comparison to the underlying reality of what is going on in this and the world economies. This is one bandwagon not to jump aboard unless you are a short-term speculator or trade the short-side. For investors, better to be taking money off the table.
Wanting something to be or hearing that it is from people who want you to believe so is no substitute for common sense. Mine tells me we are headed for a period that will make our era eventually known as “The Greater Depression.”