Skip to comments.Why Is The Economy So Bad?
Posted on 05/29/2011 3:58:14 AM PDT by GonzoII
Millions of Americans have lost their homes, tens of millions of Americans can't find a decent job and 44 million Americans are on food stamps. This is causing an increasing number of Americans to ask this question: "Why is the economy so bad?" There are some Americans that are old enough to remember the Great Depression, but the vast majority of us have never known hard times. All our lives we were told that America was the greatest economy on the planet and that we would always experience endless prosperity in this nation. That was easy to believe because even though we had a recession once in a while, things always bounced back and got even better than ever. But now something seems different. The current economic downturn began back in 2007 and yet here we are in 2011 and there seems to be no end in sight for this economic crisis. So what in the world is going on? Can anyone explain why the economy is so bad?
The following are some of the kinds of questions that the American people are asking about the economy these days....
Why does it seem like it is harder to get a job today than it used to be?
Well, it is because there are far fewer jobs available and far fewer people are getting hired. 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.
Is there much hope that the unemployment rate will start to decline significantly?
Unfortunately there does not appear to be much reason for optimism. Initial weekly unemployment claims have been above 400,000 for 7 weeks in a row. The "jobs recovery" we have been promised simply is not materializing. Only 66.8% of American men had a job last year. That was the lowest level that has ever been recorded. At the rate we are going things are going to be about the same this year.
So where did all of the jobs go?
They are being sent overseas at a blistering pace. The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001, and the U.S. trade deficit with China is now 27 times larger than it was back in 1990. Amazingly, the United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.
Why does it seem like nearly all of the jobs that are available right now are crappy, low paying jobs?
Well, because most of the jobs that are available are crappy, low paying jobs. The following is a brief excerpt from a recent article posted on Tomdispatch.com.....
According to a recent analysis by the National Employment Law Project (NELP), the biggest growth in private-sector job creation in the past year occurred in positions in the low-wage retail, administrative, and food service sectors of the economy. While 23% of the jobs lost in the Great Recession that followed the economic meltdown of 2008 were low-wage (those paying $9-$13 an hour), 49% of new jobs added in the sluggish recovery are in those same low-wage industries. On the other end of the spectrum, 40% of the jobs lost paid high wages ($19-$31 an hour), while a mere 14% of new jobs pay similarly high wages.
Why are so many Americans afraid to start businesses?
Maybe it is because the overregulation of business in this country has now reached extreme levels. For example, the U.S. Department of Agriculture recently slapped a fine of $90,000 on one family from Missouri because they sold more than $500 worth of rabbits in a single year. The $4,600 in rabbits that they sold ended up netting the family only $200 in profits.
If people are not able to make a decent living, then how are they providing for their families?
Sadly, an increasing number of Americans are simply not able to put food on the table anymore. Today, one out of every eight Americans is on food stamps and one out of every four American children is on food stamps.
For the first time ever, more than a million American homes were repossessed during 2010. So is there any sign that this will turn around in the years ahead?
Sadly, things could get even worse. Today, there are 6.4 million homeowners that are delinquent on their mortgages or in foreclosure. Of those, 675,000 have not made a payment in at least two years.
Will the U.S. housing market ever recover?
Hopefully we will see some sort of a recovery at some point, but right now things don't look good. In April, signed contracts to buy homes fell to a 7-month low. There are 120 million more people in the U.S. than there were in 1963, but home purchases are currently at about half the level they were back then. The truth is that there are dozens of indications that the U.S. real estate crisis may get even worse before things start getting better.
Why does it seem like health care costs so much these days?
Sadly, it is because the entire U.S. health care industry has become a giant money making scam. According to the Bureau of Economic Analysis, health care costs accounted for just 9.5% of all personal consumption back in 1980. Today they account for approximately 16.3%. One study found that approximately 41 percent of working age Americans either have medical bill problems or are currently paying off medical debt. Health care costs continue to increase far faster than the general rate of inflation and so this crisis is going to continue to get worse.
Is "retirement" rapidly becoming a luxury that only the wealthy can enjoy?
According to stunning new research, 54 percent of all American workers plan to keep working after they retire. A different study found that American workers are $6.6 trillion short of what they need to retire comfortably.
Why does it seem like U.S. companies are hiring so many temporary workers?
It is because American businesses are hiring them by the bushel. A whopping 26 percent of all the workers hired in 2010 were temporary workers. That is way, way above historical norms. Temporary workers are far cheaper and much easier to get rid of.
Is the gap between the rich and the poor growing in America?
Yes, it most certainly is. Between 1979 and and 2007, the average household income of the top 1% of Americans soared from $346,600 to $1.3 million. During that same time period the average household income for middle class Americans increased only slightly. At this point, the poorest 50% of all Americans collectively own just 2.5% of all the wealth in the United States.
Does how much money you make tend to alter your view of how well the economy is doing?
Well, according to recent Gallup polling, 46% of those Americans that make less than $30,000 a year believe that we are in a depression right now, while only 23% of those making $75,000 or more believe that we are currently in a depression.
Why do members of Congress seem to care so little about average American workers?
Perhaps it is because 58 percent of the members of Congress are millionaires while only about 1 percent of the general population is made up of millionaires.
So if the economy is in such bad shape why do we still have such a high standard of living?
Sadly, the truth is that we have only been able to maintain our incredibly high standard of living by going into massive amounts of debt. The U.S. national debt is now more than 14 times larger than it was when Ronald Reagan took office. America has become absolutely addicted to government money. Any politician that threatens to reduce government payouts usually gets voted out of office fairly quickly. 59 percent of all Americans now receive money from the federal government in one form or another. U.S. households are now actually receiving more income from the U.S. government than they are paying to the government in taxes. In 1980, government transfer payments accounted for just 11.7% of all income. Today, government transfer payments account for 18.4% of all income. As long as the American people continue to be addicted to receiving government payouts the federal government will continue to be drowning in debt.
But it is not just the federal government with a debt problem. State and local government debt has reached an all-time high of 22 percent of U.S. GDP. Many state and local governments are even closer to going broke than the federal government is.
U.S. households have been on a debt binge for decades as well. Average household debt in the United States has now reached a level of 136% of average household income.
The truth is that we are a nation that is addicted to debt. We are living in the greatest debt bubble in the history of the world and it was really fun while it lasted.
Unfortunately, the bills are starting to come due and nobody is quite sure how we can possibly pay for all of our mistakes.
We are drowning in debt at the same time that our economic infrastructure is being ripped to shreds. Tens of thousands of factories have closed over the last decade. There is a never ending parade of companies leaving the United States. U.S. workers are having a really tough time competing against slave labor on the other side of the globe. Thanks to "globalization", multinational corporations can hire workers for slave labor wages on the other side of the planet and nobody can stop them.
But if U.S. workers lose their jobs, they go from paying taxes into the system to being a drain on the system. This makes our government debt situation even worse.
Let there be no mistake - America is in economic decline.
So why is the economy so bad?
The truth is that decades of debt and really, really bad decisions are starting to catch up with us.
The economy is a mess right now and things are going to get a whole lot worse.
You better get ready.
And support communists to boot.
BFLR ....BTTT !
And thanks to unions, it’s now worth it to move everything overseas. Low wages might get companies interested, but the prospect of never ending union extortion will easily convince them to make the massive capital investment starting a new plant in a third world country takes.
Dump unions, fix the overregulation, pass tort reform, deport the illegals, get rid of the unfunded treatment mandate for non-lifethreatening cases that present in the ERs. Do all that, watch prosperity come back.
The reasons things are going to get worse would have been clearer if the author had used this picture of what voters think is a solution. The communist druggie in our White House is not the primary cause of our problems, that would be the parasites who voted for socialism, but he is the guarantee that things will get even worse.
Unions, cheap labor elsewhere, taxation, regulation.
Spetyr has made some very sane points. But there is more.
Too much money is in the government coffers, and not enough money in the private sector, plus the banks are scared shitless, and as a result are hoarding money.
Because they are afraid of a run on the banks. It has happened before, and could happen again.
The government must stop raising taxes and spending so much.
Very simply, the solution to all of this is immediate, across the board import tariffs.
I’d advocate 100%.
Not some central government program of selecting winners and losers - just one uniform 100% tariff on EVERYTHING imported.
Jobs will spring up all over the place, right here in America.
Sure importers like Wal*mart will quickly find their line of “work” less lucrative. Sort of the idea. :)
Plus we gotta figure out a way to stop taxpayers subsidizing stupid unmarried women from going to the nightclub, spreading their legs and creating future drop-outs, gang-bangers and prison inmates.
Actually, another reason they are hoarding money is to avoid having the Feds declare them insolvent out of the blue, and handing their assets over to a ‘connected’ competitor. Which they have apparently been doing.
Both parties are substantially in the wrong, neither represents American interests.
The world is imperfect, and presents imperfect choices.
I'd rather protect American manufacturers, and pay American union workers, than support aliens.
I would, of course, outlaw public employee unions.
Half of US industry will go bankrupt within 24 hours. Try again.
We disagree then.
So be it.
According to the MSM the economy is in great shape.
I would rather pay free Americans not in a socialist-supporting union.
If you think unions are such a good thing, explain to me why they demand that they be kept exempt from every single racketeering law on the books? They are the only exceptions to those laws. Why is that?
By the way, it is completely possible to go to Walmart and buy everything made in the USA. Not just food, either - auto supplies, plastic goods (which you’d expect to be made in China, but isn’t), tools... Not that they don’t carry foreign stuff, but they have far and away more USA-made merchandise than many people here seem to think.
Target, on the other hand.... well, let’s just say that their logo is red for a reason.
I hadn’t thought of that. The government as wicked stepmother! How droll - NOT!
Have you ever been to Leo Donofrio’s website:
He gives an outstanding example of how the U.S. government is screwing over businesses in the nation. It is enough to turn anyone’s stomach!
6.9% of private sector workers are unionized. You’re telling us that this massive drive to outsource everything except management, lawyers, and government is being driven by 6.9% of workers?
Or perhaps it’s the lifestyle that the other 93% enjoy - which is expensive, first world, and takes a lot of inputs to make happen - that is driving jobs overseas to Chinese slave labor.
Businesses will not expand with an anti-business mindset in control in local, state and federal government.
Nobody will hire workers and take risks so long as they see this dark cloud hanging over their business decisions.
At the root of this is a denial of the liberty to pursue economic success without government punishing the hard work needed to achieve the success.
America’s economy is, as we lose our manufacturing base, rapidly becoming a shrinking, giant zero-sum game.
Since we have effectively stopped innovating things which are actually made here - America is effectively shrinking.
50 billion or so dollars every month. Shrinking. Every day, we have fewer dollars, fewer jobs and less innovation.
The reason is BUYING IMPORTS. Nothing more.
Our economy sucks more every day, because we are spending America into catastrophe.
Import tariffs, would incent job creation in America - which is the only way we will start to grow again.
Import tariffs, are the only solution.