Skip to comments.We Are Living in a ‘Modern-Day Depression’: David Rosenberg(1/5 household income from gov)
Posted on 06/27/2012 2:52:07 AM PDT by TigerLikesRooster
We Are Living in a Modern-Day Depression: David Rosenberg
By Aaron Task | Daily Ticker Mon, Jun 25, 2012 8:13 AM EDT
The Federal Reserve cut its growth forecast for the second half of 2012 and 2013 last week, raising concerns yet again about the potential for a "double-dip" recession. While some, notably the cycle watchers at ECRI, believe the U.S. economy is definitely heading for another recession (or already there), Gluskin Sheff's chief economist and strategist David Rosenberg goes a big step further.
"We are living in a modern-day depression," he declares. This dramatic statement is based on several factors, including the record number of Americans living on Food Stamps 46 million or 1-in-7 in 2011. Because these benefits are now given in the form of electronic debit cards, we don't have bread lines like in the 1930s, but they are there in virtual form. And that's just the most obvious form of government support for its struggling citizenry. (See: Marion Nestle on The (Big) Business of Food Stamps: "Here's Where the Profits Come In")
"Government transfers to the personal sector now makes up nearly one-fifth of total household income," Rosenberg writes. "Even Lyndon Johnson, architect of the 'Great Society', would blush at that."
(Excerpt) Read more at finance.yahoo.com ...
OK, we are near the edge of abyss again. Would we fall off the edge finally or somebody burn gazillions of dollars to buy another few months?
So, 20 percent of American households’ income, comes from the Government. Is that including Social Security recipients? I assume so. My question is this:
How many of that 20 percent, whose incomes come from the government, will vote for Obama?
I’m hearing more people in the Liberal media refer to it as the Great Recession. That’s not good enough for me (I call it the Second Great Depression) but I see it as a real acknowledgement that this is indeed “the worst economy since Hoover” under Obama’s leadership. It really puts the lie to John Kerry’s assertion that George W. Bush gave us the worst economy since Hoover — you know: unemployment 4.6%, DJIA 14,000, annual federal deficit $160B, etc. Those were dark days indeed [/s]
You know what that means?
Big die off...
It’s time to dust off one of my great movie favorites....My Man Godfrey. Made in 1936, it poked hole after hole in the Roosevelt era agenda for the “Great Depression”. It would be great to have it remade today, with the current themes and agendas in place.
Though the numbers were what they were, much of it wasn't real. Sort of like.... "Hey, we have a check book and credit cards!!! We're rich!". We've truly went from bad to worse though. Now, we can't even print/borrow our way to good economic stats. Just back out the borrowing by .gov alone from GDP and you'd probably see at least a 10% contraction. Comparing the deficit between then and now is just staggering.
“It really puts the lie to John Kerrys assertion that George W. Bush gave us the worst economy since Hoover you know: unemployment 4.6%, DJIA 14,000, annual federal deficit $160B, etc. Those were dark days indeed [/s]”
Yep, and all of that in the setting of the worst attack on the US homeland since Pearl Harbor. Further, the housing/mortgage debacle is linked directly to the democrats, and the economic issues started to appear after the democrats took over Congress.
Obama ushered in this devastated economy. He did, and continues to do everything possible to foster it. It’s his baby and anyone with their eyes open knows it. The mainstream media and entertainment industry are pushing a Potemkin reality that fools only the thickest dullards and those without bills to pay. The dam’s getting ready to burst.
And this Great Depression II is being propagated just like the original. What was merely a recession has been repeatedly “fixed” by measures that only freeze in place and prolong the agony. When the Democrats achieved control of both House and Senate in 2007, they passed a number of banking “reforms” which did nothing to control the excesses, but rather made the cost of doing business much higher for small and medium sized commercial activities, and artificially distorted the costs of personal credit. The upshot included increased fees for electronic banking, suppression of savings interest returns, and requirements for minimum balances that were unconscionably high. The original objective was to reduce “profits” for banking concerns, but banks are by their very nature, in existence ONLY for the purpose of making a maximum return on investments, a simple fact that the populist Democrat majority of our time cannot seem to grasp.
This was compounded by the capture of the executive branch in 2009, and the Democrats ran roughshod over the entire spectrum of US commerce, in a vain attempt to change the business structure so dramatically, it would not be recognizable. Profits were to be forbidden, the “wealthy” were to pay their “fair share”, and the downtrodden were to be lifted, finally, from their grinding poverty in the name of “equality”.
But surprise, surprise, capital fled the country, the wealthy took tax avoidance strategies, and rather than lift the downtrodden, many more were pushed into that morass, vastly redistributing misery to levels that had not been suffered before.
Without profits, industries do not expand, and consequently, do not hire, and in fact, may lay off a large part of their existing work force. Eventually, even with these measures, many simply close their doors, because they cannot return to enough productivity to justify continued existence. Several industries were propped up, with infusions of huge amounts of funds, not through banks, but through the national treasury. Predictably, these enterprises, “too big to fail”, did little to prudently manage the resources available to them, and have, one by one and sometimes in droves, gone into receivership and even greater mismanagement. Too big or not, they eventually fail anyway.
Then, as the signature accomplishment of the current regime, a wholly unworkable medical services delivery scheme is foisted on the American people, with many repeated promises that shall be impossible to keep, and with built-in costs that could only be paid by cannibalizing the existing system, while piling on mandates, fines and penalties on the very organizations that have had to bear the costs and manage the distribution of these services. This is an open-ended invitation to abuse, mismanagement and outright fraud, with the promise that costs will not be contained except on the basis of rationing, leading to the popular belief that faceless “death panels” will be sitting in judgment, determining QARY = Quality Adjusted Remaining Years. This is a part of the formula which will be used to mandate to doctors when and on whom certain procedures will authorized, and if Grandma’s heart has a leaky valve, she will be offered only palliative care and end-of-life counseling. It would also apply to severely compromised medical conditions, which could be alleviated or cured at great cost, but only to leave the individual unable to make a gainful future contribution to society.
Time to take back our heritage and restore the ideal of what was once America, and to halt this progression into a life of perpetual burden and inordinate punishment.
” How many of that 20 percent, whose incomes come from the government, will vote for Obama?”
200% of them.......
I think you have to be willfully blind not to see that we are in an economic depression. For example, if the Fed had not bought up such a huge percentage of our debt, we would be in economic turmoil.
The food stamp program is just one measure of people’s dire condition along with a myriad of other support and giveaways from medical handouts to housing handouts.
And through all this the massive federal spending masks the true GDP contraction that would result without it, and this with wartime spending on two fronts. Usually wars are inflationary. There is a reason we aren’t seeing a lot of inflation in the face of these 2 wars.
The economic depression is very real. You have to be blind not to see it, although most people frankly aren’t paying any attention.
“What time da game on guys?”
I agree with you. The apparent “prosperity” of the Baby Bush years was mostly false, fueled with a flood of cheap credit awash after 9/11. It wasn’t based on savings and investment, but on consumption and debt.
Good idea, but I'm more inclined to dust of "Old Bess".
200 % ROFL
1/5 of people’s income is comfiscated from other people.
Let’s try the abyss for a change.
The Fed’s zero interest rate policy that allows the government to burn gazillions of dollars is killing savers. And it encourages people to hang onto their money even tighter, which appears to be exactly the opposite of what the economic wizards are trying to get us to do.
“Though the numbers were what they were, much of it wasn’t real. “
You’re right, although saying so isn’t going to be popular.
In California in particular, the boom of the 2000s was equal to the amount of home equity withdrawal. It was a personal debt fueled boom.
Everyone here in SoCal thought their house had become an income generating machine.
House prices went up every year and my fellow Californians, displaying the sophistication of a Cargo Cult, knew that this would never come to an end. Since your house would always be worth more next year you would never have to pay the money back.
And while it’s mildly amusing to remember that that is what millions believed, you really have to marvel at the lenders who bought into it too.
And to think:
The Food Stamp Program, administered by the U.S. Department of Agriculture, is actually proud of the fact it is distributing the greatest amount of free meals and food stamps ever.
Meanwhile, the National Park Service, administered by the U.S. Department of the Interior, asks us to “Please Do Not Feed the Animals.”
The stated reason for the policy is because the animals soon grow dependent on handouts, forget how to fend for themselves, and starve to death if nobody is there to feed them.
This ends today’s lesson.
Everybody in a position of authority was making big money and believed there would be no consequences for screwing up.
Always enjoy Rosenberg’s commentary.
Used to get it every day for free but now he’s charging a grand a year which was a bit pricey for me.
“Everybody in a position of authority was making big money and believed there would be no consequences for screwing up.”
That’s right. The guys at the top didn’t want to hear any negativity from their risk officers, the size of the money coming in overwhelmed their good sense.
I never believed things were as great as the government claimed under Bush but things were FAR better than now. There were millions more people producing and millions fewer living on government handouts. It is amazing how some people can persist in the insane folly that consumption drives economies. Those of us who grew up working our tails off on a little family farm know that the only thing that keeps things going is PRODUCTION. Any fool can consume but when consumption exceeds production then you have modern day America and if this ain’t a depression then sugar ain’t sweet and skunks don’t stink.
I read a couple of books on the mortgage “crisis”.
California: high school dropouts working in a car wash were given three days of training and became mortgage brokers making 10 grand a month.
I agree 100%. Too many people are clueless. They just aren’t paying attention.
“California: high school dropouts working in a car wash were given three days of training and became mortgage brokers making 10 grand a month”
All true, I knew a few of them. It was easier to become a mortgage broker than a barber. And they really were pulling in that kind of money, if not more.
Thank you, RipSawyer