19 reasons why US economy is dead and gone.

The problem is debt. Collectively, the U.S. government, the state governments, corporate America and American consumers have accumulated the biggest mountain of debt in the history of the world. Our massive debt binge has financed our tremendous growth and prosperity over the last couple of decades, but now the day of reckoning is here.

And it is going to be painful.

#1) Do you remember that massive wave of subprime mortgages that defaulted in 2007 and 2008 and caused the biggest financial crisis since the Great Depression? Well, the "second wave" of mortgage defaults in on the way and there is simply no way that we are going to be able to avoid it. A huge mountain of mortgages is going to reset starting in 2010, and once those mortgage payments go up there are once again going to be millons of people who simply cannot pay their mortgages.

#2) The Federal Housing Administration has announced plans to increase the amount of up-front cash paid by new borrowers and to require higher down payments from those with the poorest credit. The Federal Housing Administration currently backs about 30 percent of all new home loans and about 20 percent of all new home refinancing loans. Tighter standards are going to mean that less people will qualify for loans. Less qualifiers means that there will be less buyers for homes. Less buyers means that home prices are going to drop even more.

#3) It is getting really hard to find a job in the United States. A total of 6,130,000 U.S. workers had been unemployed for 27 weeks or more in December 2009. That was the most ever since the U.S. government started keeping track of this statistic in 1948. In fact, it is more than double the 2,612,000 U.S. workers who were unemployed for a similar length of time in December 2008. The reality is that once Americans lose their jobs they are increasingly finding it difficult to find new ones.

#4) In December, there were also 929,000 "discouraged" workers who are not counted as part of the labor force because they have "given up" looking for work. That is the most since the U.S. government first started keeping track of discouraged workers in 1949. Many Americans have simply given up and are now chronically unemployed.

#5) Some areas of the U.S. are already virtually in a state of depression. The mayor of Detroit estimates that the real unemployment rate in his city is now somewhere around 50 percent.

#6) For decades, our leaders in Washington pushed us towards "a global economy" and told us it would be so good for us. But there is a flip side. Now workers in the U.S. must compete with workers all over the world, and our greedy corporations are free to pursue the cheapest labor available anywhere on the globe. Millions of jobs have already been shipped out of the United States, and Princeton University economist Alan S. Blinder estimates that 22% to 29% of all current U.S. jobs will be offshorable within two decades. The days when blue collar workers could live the American Dream are gone and they are not going to come back.

#7) During the 2001 recession, the U.S. economy lost 2% of its jobs and it took four years to get them back. This time around the U.S. economy has lost more than 5% of its jobs and there is no sign that the bleeding of jobs is going to stop any time soon.

#8) All of this unemployment is putting severe stress on state unemployment funds. At this point, 25 state unemployment insurance funds have gone broke and the Department of Labor estimates that 15 more state unemployment funds will likely go broke within two years and will need massive loans from the federal government just to keep going.

#9) 37 million Americans now receive food stamps, and the program is expanding at a pace of about 20,000 people a day. The United States of America is very quickly becoming a socialist welfare state.

#10) The number of Americans who are going broke is staggering. 1.41 million Americans filed for personal bankruptcy in 2009 - a 32 percent increase over 2008.

#11) For decades, the fact that the U.S. dollar was the reserve currency of the world gave the U.S. financial system an unusual degree of stability. But all of that is changing. Foreign countries are increasingly turning away from the dollar to other currencies. For example, Russia’s central bank announced on Wednesday that it had started buying Canadian dollars in a bid to diversify its foreign exchange reserves.

#12) The recent economic downturn has left some localities totally bankrupt. For instance, Jefferson County, Alabama is on the brink of what would be the largest government bankruptcy in the history of the United States - surpassing the 1994 filing by Southern California's Orange County.

#13) The U.S. is facing a pension crisis of unprecedented magnitude. Virtually all pension funds in the United States, both private and public, are massively underfunded. With millions of Baby Boomers getting ready to retire, there is simply no way on earth that all of these obligations can be met. Robert Novy-Marx of the University of Chicago and Joshua D. Rauh of Northwestern's Kellogg School of Management recently calculated the collective unfunded pension liability for all 50 U.S. states for Forbes magazine. So what was the total? 3.2 trillion dollars.

#14) Social Security and Medicare expenses are wildly out of control. Once again, with millions of Baby Boomers now at retirement age there is simply going to be no way to pay all of these retirees what they are owed.

#15) So will the U.S. government come to the rescue? The U.S. has allowed the total federal debt to balloon by 50% since 2006 to $12.3 trillion. The chart below is a bit outdated, but it does show the reckless expansion of U.S. government debt over the past several decades. To get an idea of where we are now, just add at least 3 trillion dollars

16) So has the U.S. government learned anything from these mistakes? No. In fact, Senate Democrats on Wednesday proposed allowing the federal government to borrow an additional $2 trillion to pay its bills, a record increase that would allow the U.S. national debt to reach approximately $14.3 trillion.

#17) It is going to become even harder for the U.S. government to pay the bills now that tax receipts are falling through the floor. U.S. corporate income tax receipts were down 55% in the year that ended on September 30th, 2009.

#18) So where will the U.S. government get the money? From the Federal Reserve of course. The Federal Reserve bought approximately 80 percent of all U.S. Treasury securities issued in 2009. In other words, the U.S. government is now being financed by a massive Ponzi scheme.

#19) The reckless expansion of the money supply by the U.S. government and the Federal Reserve is going to end up destroying the U.S. dollar and the value of the remaining collective net worth of all Americans. The more dollars there are, the less each individual dollar is worth. In essence, inflation is like a hidden tax on each dollar that you own. When they flood the economy with money, the value of the money you have in your bank accounts goes down.

theeconomiccollapseblog.com...

There are actually 20 reasons but the 20th reason is purely opinon. 19 solid facts that should hit home and kill any pre-notion you may have had living in la la land that the united states can continue to ignore thier debt and recover. Capitalism is a doomed finanical system, America is a failed state. I suggest this recent thread www.abovetopsecret.com... to get an idea of what to stock up on when this happens, not if. your thoughts...?

[edit on 23-1-2010 by TheCoffinman]

Thanks for putting that out there.

So many people automatically assume that the economy is going to bounce back and recover.

How do we know it won't get worse?

reply to post by Lou Minotti


Wow, Thanks for the post. For some reason it feels like a weird prophecy. Right now I'm ill and I have a test coming up next month for my Adult Ed GED. I plan on going to college and then business school. My family has been getting both Food Stamps and SSI each month and it still isn't enough for everyone. Growing up in a Blue collar home all your life puts you in the front seat of this economic meltdown. Trust me it sucks. I wish it can be better, But I am fortunate to achieve from graduating from college, then making it in the capitalistic monopoly world. All I can do is prepare for the best and worst.

reply to post by Romantic_Rebel


my father gets social security income and my mother works at a convenience store, she makes too much money to get food stamps (what a crock of bs) we have enough to pay bills and get some grocieres every week. thats it. ive been jobless for more than a year now and im a vet. wheres our bailout? sorry obama, no money has "trickled" down to the common folk, the only thing that has trickled down to us is taxes, higher food prices, gas prices, loss of benefits and higher unemployment... when the system goes its families like mine and yours that are going to suffer most.

I try to keep hoping that there is some possibility of a turnaround, or a way to correct direction in the future. That said the situation is discouraging at best. Here in DFW Texas, we are not nearly as bad off as a lot of the rest of the country. That being said a good friend of mine lives on a short county road, about 16 houses in all. Of those 16 at least four I know of have been abandoned in the last year or so. Of those folks still out there at least 4 houses are currently funded by unemployement, including my friends. He has been out of work for about 9 months now, with no leads, after getting laid off from a company he worked for 13 years. Wasn't just a few short years ago here good paying jobs were too numerous to fill them all. Now I see starting wages down by as much as fifty percent. I am stocking necessities. That's all I know to do.

reply to post by TheCoffinman


I think those are all valid economic reasons that the economy is failing. However, you are wrong to call what we have capitalism. What we have today is fascism. The federal reserve is at the heart of this collapse... a sickening marriage between the elite bankers and the government. Yes it is a ponzi scheme but it isn't a private one.

Capitalism is private ownership of property. Fascism is when those private firms are in control of the government. Very big difference.

The idea of the corporation is not very capitalistic in the first place... a "corporation" is a collective of individuals who have additional rights. Advocates of capitalism oppose the idea of governments creating things called corporations that have special rights and privileges that individuals do not have. It actually interferes with the free market which favors equal opportunity for all people. Capitalism is a very good system of offering an incentive for those who help out the economy to continue helping it out.

The thing about private vs. public ownership is that it doesn't matter who owns the banks. The IMF is at the very least technically a communist enterprise... the IMF is owned by government which in turn is supposedly controlled by the people. And even if it really were as it is supposed to, the IMF could just as easily continue on with its loan sharking. I don't care if its the worker-owned companies doing the loan sharking or private-owned companies doing loan sharking.

There shouldn't be any loan sharking... no communist loan sharking(the IMF), no capitalist loan sharking(Payday Loans), and no government loan sharking(France's forced debts on Haiti). I bring up the IMF and France to point out that private ownership(capitalism) isn't the problem... government is the problem. Therefore capitalism isn't the problem... fascism is the problem. We can't trust the fascists to run our money supply and we we're fools to allow it, and even bigger fools to let it run past the previous great depression.

[edit on 23-1-2010 by truthquest]

reply to post by truthquest


i dont disagree with you there. however facism isnt really an economic system, its a political one. let us comprimise and call it "capitalist facism" i like to call it a "bankocracy" our forefathers and president of the past have been quotes many time over about the dangers of the very thing happening as we speak..

www.breakthematrix.com...

The fall of the mighty Roman Empire seems like a fairy-tale to many. It is hard to imagine that the most powerful, wealthy nation could be brought to its knees. However, this is a vital concept that current American citizens need to recognize. Just as the Roman Empire fell, the United States could fall as well. Political corruption, inflation, and military spending are only a few of the many problems Americans face today. Not only does the United States share these common problems with Rome, but also share other issues like unemployment and poor public health. Drawing parallels with the end of the Roman empire, Walker warned there were “striking similarities” between America’s current situation and the factors that brought down Rome, including “declining moral values and political civility at home, an over-confident and over-extended military in foreign lands and fiscal irresponsibility by the central government”. If Americans continue to repeat history, the same results will be seen, and yet another mighty empire will crumble.

a great article about how the current american "climate" is very much like that of ancient rome right before it fell..

Originally posted by TheCoffinman
reply to post by truthquest

 

i dont disagree with you there. however facism isnt really an economic system, its a political one. let us comprimise and call it "capitalist facism" i like to call it a "bankocracy" our forefathers and president of the past have been quotes many time over about the dangers of the very thing happening as we speak..

I really don't object to calling the problems with the US capitalist fascism... but just keep in mind the some of the worst organizations causing economic devastation including the IMF are really pretty far from capitalist. My whole point is that the concept of private ownership plays a small role compared to the role of government regulations.

The constitution states that US states are to pay their debts in gold and silver. But they pay them using US dollars. US dollars are the root cause of the US economic mess.

What is needed to solve messes like this is LESS regulations in the currency market... specifically the Federal Reserve needs to have its monopoly on the money supply destroyed. The Federal Reserve money supply is a sickening cross between public and private ownership. The government has a lot of control over the federal reserve, and the federal reserve has a lot of control over the government.

I'm a resident of Orange County and never knew that we went into bankruptcy in 1994, however, I did live in Oregon at the time.

It is really depressing to consider the state of the republic. It really seems that since the bailouts, only the little guy has to foot the bill while the corporations have made out really well. What is really frustrating is that productivity and profit have gone up, however, wages have remained stable. It is like we are stuck in some corporate dictatorship.

Originally posted by TheCoffinman
my father gets social security income and my mother works at a convenience store, she makes too much money to get food stamps (what a crock of bs) we have enough to pay bills and get some grocieres every week. thats it. ive been jobless for more than a year now and im a vet. wheres our bailout? sorry obama, no money has "trickled" down to the common folk, the only thing that has trickled down to us is taxes, higher food prices, gas prices, loss of benefits and higher unemployment... when the system goes its families like mine and yours that are going to suffer most.

I'm basically in the same boat you're in. I receive ssi from my dads death, and my mother gets it because she's just plain lazy. We barely get enough from it, too. Our freezer and fridge look like a desert, currently.

I heard a while back that the "Experts" say the US recession is over. The moment I heard that, I basically said 'Dern. We're all screwed, now..'

About the Roman Empire thing: I've had many talks with people about how America is starting to look just like the Roman Empire did, in its' last days.

Someone please post '19 reasons the US will flourish' and we can have a nice debate!

Another ramifications of all the bad mortgages causing defaults, is the collateral damage to the other home owners' home values in those states that got the highest number of "bad mortgages," which is triggering a HUGE amount of people to just walk away from their homes.

I live in Arizona, one of the hardest 4 states hit. When the foreclosures started, it may have been started by those who got the "bad loans" but then it started affecting everybody else's home values around them. The result? In Arizona, our home values dropped about 50% from 2005.

Now, this isn't a big deal if you bought way before 2004, but if you bought 2004-2007, you just lost 50% of your investment. So, as an example, in my neighborhood, about half of the townhouses are for sale, for rent, vacant, or being foreclosed on.

Here in Arizona, we're basically playing "musical houses." Everybody, no matter their credit rating, no matter their job, no matter their socio-economic status is scrambling to get out of our houses.

And like you mentioned in point 1 or 2, in 2010, there is another round of foreclosures coming from high interest home loans....so basically, we'll have another round of foreclosures, another round of people losing value of their homes, and then another round of walk-aways.



[edit on 23-1-2010 by nikiano]

From my perspective, the American economy could turn around - if the politicians wanted to turn it around. Unfortunately, that won't happen. At least not in my lifetime.

How? Easy. Cut corporate taxes to the bone. Massively reduce the government rolls. Reduce onerous regulation on business owners. Incentivize businesses to hire American workers. Install steep penalties for companies that move jobs abroad in any way, shape, or form. Fund technology, education, and science sectors to the hilt to drive new innovation and entrepreneurship.

Stop funding these ridiculous nonsense wars that are draining our people, finances, and resources.

None of this, however, will ever happen. It's simply a pipe dream. It could be done, but it won't. Our leaders don't have what it takes to make it happen. Either out of stupidity, incompetence, greed, or a combination of all of these factors.

America deserves better.

I do wonder, however, if the roots of these problems are really economic.

I tend to think lately that more of these problems are spiritual in nature, and the roots of these economic issues are the culture's moral depravity, greed, and general lack of any moral compass whatsoever.

The economic woes we are seeing are simply the result, not the cause. The cause is man's depravity, greed, and immorality.

[edit on 23-1-2010 by CookieMonster09]

reply to post by CookieMonster09


interesting viewpoint, the author of the source link seems to agree with you as his 20th reason was just that. i hope people take a good look at these 19 FACTS and think carefully and hard about them. im kinda saddened that more people havent replied or flagged this thread, this stuff is important. ignorance im afraid is alive and well, even here on ATS...

Originally posted by CookieMonster09
How? Easy. Cut corporate taxes to the bone. Massively reduce the government rolls. Reduce onerous regulation on business owners. Incentivize businesses to hire American workers. Install steep penalties for companies that move jobs abroad in any way, shape, or form. Fund technology, education, and science sectors to the hilt to drive new innovation and entrepreneurship.

Stop funding these ridiculous nonsense wars that are draining our people, finances, and resources.

You should run for office. Then try to take over the POTUS.
This sounds like one of the best plans I've heard in years.

You know what makes me sick?
The fact that this IS that easy, but "their" plan is to dominate, not let flourish.

I wish more people thought this way...

Originally posted by TheCoffinman
reply to post by Romantic_Rebel

 

my father gets social security income and my mother works at a convenience store, she makes too much money to get food stamps (what a crock of bs) we have enough to pay bills and get some grocieres every week. thats it. ive been jobless for more than a year now and im a vet.

I hear ya but...

Food stamps are for those who can't work or make less than what could be lived on. I know what you're saying, however even though the "Safety Nets" are in place there are many more who are less fortunate.

The system is unfair to some but nothing that man has created is ever perfect.

Good luck with the job searching. It may help if you and everyone you know [or Reading this thread] would simply stop buying Chinese made low quality knock offs.

Just a thought.

P.S. ChinaMart I mean WalMart did over 375 BILLION dollars worth of business between the Chinese manufacturers and American Consumers in the middle of the recession.

Originally posted by joojii
Someone please post '19 reasons the US will flourish' and we can have a nice debate!

I only need one.

Truth be told we have the technology and the means to not only
survive but thrive.

-- The glass is half full --