20 Questions To Ask Anyone Foolish Enough To Believe The Economic Crisis Is Over

I am surprised a complete economic meltdown hasn't occured yet, but am still convinced it's a-comin'.

With all this talk about how we are on our way to an economic recovery and the Dow Jones continues to ride high, you might want to look really hard at the following 20 questions.

(You might want to take a strong belt first. I know I wish I had!)

#1 During the 23 months of the "Obama recovery", an average of about 23,000 jobs a month have been created. It takes somewhere in the neighborhood of 150,000 jobs a month just to keep up with population growth. So shouldn't we hold off a bit before we declare the economic crisis to be over?

#2 During the "recession", somewhere between 6.3 million and 7.5 million jobs were lost. During the "Obama recovery", approximately 535,000 jobs have been added. When will the rest of the jobs finally come back?

#3 Of the 535,000 jobs that have been created during the "Obama recovery", only about 35,000 of them are permanent full-time jobs. Today, "low income jobs" account for 41 percent of all jobs in the United States. If our economy is recovering, then why can't it produce large numbers of good jobs that will enable people to provide for their families?

#4 Agricultural commodities have been absolutely soaring this decade. The combined price of cotton, wheat, gasoline and hogs is now more than 3 times higher than it was back in 2002. So how in the world can the Federal Reserve claim that inflation has been at minimal levels all this time? (Because they have changed the way the measure inflation not to include food and energy prices.... ed.)

#5 Back in 2008, banks had a total of 27 billion dollars in excess reserves at the Fed. Today, banks have a total of approximately 1.5 trillion dollars in excess reserves at the Fed. So what is going to happen when all of this money eventually hits the economy?....

#6 If the U.S. economy is recovering, then why are shipments by U.S. factories still substantially below 2008 levels?

#7 Why are imports of goods from overseas growing much more rapidly than shipments of goods from U.S. factories?

#8 According to Zillow, the average price of a home in the U.S. is about 8 percent lower than it was a year ago and that it continues to fall about 1 percent a month. During the first quarter of 2011, home values declined at the fastest rate since late 2008. So can we really talk about a "recovery" when the real estate crisis continues to get worse?

#9 According to a shocking new survey, 54 percent of Americans believe that a housing recovery is "unlikely" until at least 2014. So how is the housing industry supposed to improve if so many people are convinced that it will not?

#10 The latest GDP numbers out of Japan are a complete and total disaster. During the first quarter GDP declined by a stunning 3.7 percent. Of course I have been saying for months that the Japanese economy is collapsing, but most mainstream economists were absolutely stunned by the latest figures. So will the rest of the world be able to avoid slipping into a recession as well?

#11 Next week, Republicans in the House of Representatives are going to allow a vote on raising the debt ceiling. Everyone knows that this is an opportunity for Republican lawmakers to "look tough" to their constituents (the vast majority of which do not want the debt ceiling raised). Everyone also knows that eventually the Republicans are almost certainly going to cave on the debt ceiling after minimal concessions by the Democrats. The truth is that neither "establishment Republicans" nor "establishment Democrats" are actually serious about significantly cutting government debt. So why do we need all of this political theater? (Distraction?)

#12 Why are so many of our once great manufacturing cities being transformed into hellholes? In the city of Detroit today, there are over 33,000 abandoned houses, 70 schools are being permanently closed down, the mayor wants to bulldoze one-fourth of the city and you can literally buy a house for one dollar in the worst areas.

#13 According to one new survey, about half of all Baby Boomers fear that when they retire they are going to end up living in poverty. So who is going to take care of them all when the money runs out?

#14 According to the U.S. Bureau of Labor Statistics, an average of about 5 million Americans were being hired every single month during 2006. Today, an average of about 3.5 million Americans are being hired every single month. So why are our politicians talking about "economic recovery" instead of "the collapse of the economy" when hiring remains about 50 percent below normal?

#15 Since August, 2 million more Americans have left the labor force. But the entire period from August to today was supposed to have been a time of economic growth and recovery. So why are so many Americans giving up on looking for a job?

#16 According to Gallup, 41 percent of Americans believed that the economy was "getting better" at this time last year. Today, that number is at just 27 percent. Are Americans losing faith in the U.S. economy?

#17 According to the U.S. Census, the number of children living in poverty has gone up by about 2 million in just the past 2 years, and one out of every four American children is currently on food stamps. During this same time period, Barack Obama and Ben Bernanke have told us over and over that the U.S. economy has been getting better. So what is the truth?

#18 America has become absolutely addicted to government money. 59 percent of all Americans now receive money from the federal government in one form or another. U.S. households are now receiving more income from the U.S. government than they are paying to the government in taxes. Americans hate having their taxes raised and they hate having their government benefits cut. So is there any hope that this will ever be turned around before disaster strikes? (59% - that is insane. Is there any hope - I don't think so. ed.)

#19 The combined debt of the major GSEs (Fannie Mae, Freddie Mac and Sallie Mae) has increased from 3.2 trillion in 2008 to 6.4 trillion in 2011. How in the world is the U.S. government going to be able to afford to guarantee all of that debt on top of everything else?

#20 If the U.S. national debt (more than 14 trillion dollars) was reduced to a stack of 5 dollar bills, it would reach three quarters of the way to the moon. The U.S. government borrows about 168 million dollars every single hour. If Bill Gates gave every penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for 15 days. So how in the world can our politicians tell us that everything is going to be okay?

20 Questions

Ugh!

Interesting...

Hey, I got it!
I think what we need is CHANGE!

I'm telling you, this time it will work

reply to post by Hessling


I seriously belief we have passed the point of no return on this subject. There is no 'fixing' it. The idea of 'fixing' it involves more pretend money being thrown at the monster..which only strengthens the problem. There is so much double speak and flat out lies being told, not to mention manipulation of money that the entire world can see it. China and Russia have all but said no more, yet people have such a hard time believing the land of the free has become the land of the indebted, thus making us all slaves.

You would indeed be a fool if you believe in the MSN recovery .The GFC has not even begun .

reply to post by bruisedhalo


I would have to agree with you, mostly.

I still hold some teeny bit of hope that we can find a way out of this mess. However, every day I have deeper and deeper doubts.

The manipulation of money is a lurking monster who has yet to fully rear its ugly head. When it does that will be the true test of our economic capability.

I read a story a few days ago about India now creating jobs for people in the USA. I can't locate the original story but I've linked another source.

The soaring unemployment in the US has made it possible for Indian firms to hire US citizens at cheap rates. Struggling residents desperate for work are happy to take a call centre job paying around $14 an hour.

businesstoday.intoday.in...

Ok, the numbers are very small, yet it's a very interesting development. We in the Uk, have lost many jobs to India in the call centre field due to cheap labour. Now Indians are demanding larger wages, hence India looking to outsource.

The US has not dealt with the reality that they have to face. It is easier for most politician's to live on borrowed time, and spend money form future generations. The reality is that the US is in store for about a 30% drop in their standard of living. You can only play the pyramid scheme game so long.

Eventually, when you are downgraded credit wise, the Chinese stop buying your worthless bonds, and your dollar is at .56 Canadian some SOB politician will get in power and make some tough decisions. You will vote him out of office and the media will hate him. 30 years in the future he will be seen as a great leader in a time of need.

Human nature being what it is, you will not fix your problems until you hit rock bottom.

reply to post by Ultraman2011


The track record for being re-elected when being honest and forthright on serious economic issue is dismal at best.

You are so very right when you point out how politicians refuse to make the hard choices. Making hard choices is political death nowadays.

Most of what you posted is false. If you go the article and check the links, most are from fox news with a history of lieing and they are wrong and the numbers that the link has are wrong. The sources this article uses are dubious in an attempt to cause fear and discredit the president.

reply to post by gorgi



So you actually think you guys have it figured out and are on the right path? You are becoming a laughing stock in the world. This goes beyond Obama. Your entire political system is becoming a joke and maybe an example for the rest of us, how not to do things.

As it stands now, it wouldn't matter if the Republican's got in power, or Fox news existed or not. Your "system" is so full of corruption, graft, and special interest, you would make Putin blush.

When I was younger, I used to admire (on paper) the system of checks and balances in the US, but now, I thank my lucky stars I live in a Parlimentary democracy.

reply to post by Ultraman2011

What we must never forget: The supply of each industrialized nations most basic products could easily be produced by every current industrialized nation if the markets were not locked up by global corporate producers. Supply is not a problem. The global prices of goods is largely jacked up by global speculation of commodity futures contracts.

But the global demand for commodities by most nations is limited to the price which will sustain the minimum living conditions to feed a impoverished labor market which is often not able to demand higher wages. So global oil and commodity prices can not continue to rise unless wages rise, somewhere.

I think you may be right that many Americans will face difficult times ahead, while India and China may face better times.

The whole world faces a correction of the current global derivatives bubble to which the US plays a large part in creating. Many retirements may be lost as the banker/broker bubble pops.

The US middle class can not sustain its standard of living by simply allowing the creation of fiat currency and fiat stocks. This fiat wealth enriches those who manage investments (via investment fees and bonuses), not those who invest in stock 401K's or those who live off US service jobs.

The bitter medicine needed is a fair trade policy. The US should not continue to import products with an average tariff of 2.5% while China and Europe demand higher tariff rates and a 17% Value Added Tax (VAT), etc.... This may be the best reason not to vote for "Free Trade" candidates in 2012.

Paul Krugman told us in 2009 that the $700 billion in US domestic stimulus (Global Fed loans excluded) was completely insufficient, and that even with a couple trillion dollars fully spent on something legitimate (such as US infrastructure) the US recovery would require about 300K new jobs a month for a few years to bring the US unemployment rate back to comfortable levels.

The US Government did not get out of the Great Depression before it borrowed over 100% of a year's GDP. That would be like borrowing (and actually spending) about $10 trillion in 2012. But to work, this spending would have to be directed to support the working class so it would not buried in the vaults (or foreign investments) of the wealthy global investor class. This sort of spending might be the sugar to sweeten a bitter ad valorem tariff for US consumers. Spending on the poor via Social Security and Food Stamps could also be increased to bring back demand in the US market.

Yes, I'm suggesting that 99% of the US corporate media has it exactly wrong. Congress must not cut spending. As the buyer of last resort, the US Government, must spend much more for a few years, not less.

The spending might be best timed to occur after the next market crash and after the rules restricting banks from acting like brokers are reestablished (after the US reinstates Glass-Steagall). US banking laws must also make sure that derivatives (complicated bets) can not be used as collateral for US bank loans by the "too big to fail" banker/brokers, as they were before the 2008 crash of the US mortgage market (and as they are probably still used now in the US oil/commodities markets).

My advice to Americans: Turn off your TV and search the Internet for your daily news....