Economists are touting the great strides consumers are making in paying down their debt, but in prompting this illusion they have tuned to the wrong channel.
The real reason many Americans’ went into debt was because their wages didn't keep up with the costs of goods and services. The median wage (adjusted for inflation) dropped between 2001 and 2007, the last purported economic expansion. And that was one of the primary reasons America began borrowing the equity out of their homes, in many cases it was to be able to make the payments and retain some semblance of a purchasing power.
A recession had already begun in 2000, and by September 11, the economy came to an abrupt stand still. What brought us out of that bog was the ability to draw on our own assets. That is what actually maintained the appearance of a robust economy, but that was an appearance only!
As the bubble began to burst, most of the borrowers; that class between poverty and abundance all but threw in the towel
The common wisdom today among Wall Street’s elite is that excessive debt-financed spending was one of the causes of the recent recession; to the contrary, that was what brought America out of the last recession. It was when the ability of borrowers to refinance their assets in order to maintain the economy fell apart that we dropped right back into the fan.
So now Americans out of work and living with much less income from working fewer hours have no choice but to cut back their debt load and perhaps this is why millions have either stopping making their mortgage payments, and in some cases actually filed for bankruptcy.
Consumer spending is 70 percent of the economy. Since consumers had until the financial collapse traditionally lived with their credit cards outstretched, it helps explain why so few jobs are being created, aside from the fact that everything has been outsourced; and it explains why we can't escape the gravitational pull of this Depression without far more government spending. However should government continue to spend like a drunken sailor it will inevitable crush the US economy even further, it seems to be an impasse we are disaster-prone either way we go.
It's also a bad prophecy for the future.
Showing posts with label America. Show all posts
Showing posts with label America. Show all posts
Monday, June 14, 2010
Thursday, April 1, 2010
Obama and the Titanic
The current administration has hit an ice berg and placed Middle Class America in the steerage section of the Titanic
For most of America it feels like April 15, 1912, that’s the date the Titanic hit an ice berg in the Atlantic and within hours went down taking 1,517 people with it. But this time an entire nation could go down and when America sinks it will take practically the entire world with it. The question is no longer if, but when.
Regardless of the lucidity of the administration’s propaganda, we as a nation have been struck by an ice berg and we are sinking, audibly drowning in an abyss of debt.
While the Obama administration helped the large banks step into the life boats, our citizens were relegated to the lower lever steerage where lifeboats were not available.
Yes the banks have rebounded, and yes they will continue financing their cluster of relationships, rewarding those who have allowed the impenitent greed that surrounds Wall Street to go on, even while Middle Class America struggles to hold onto the remnants of a broken ship’s bowl.
We are told that everything is rosy and America is moving ahead, yet the unemployment figures (11 million unemployed) don’t reflect those sentiments. Neither does the current bankruptcy filings (6,000 a day).
The current US Debt is a staggering 12 .6 trillion and growing, at the rate of $4.02 billion per day
Inflation and depreciation of our currency is an inevitable as the looming debt crisis, even as the stock market is overvalued and an adjustment is also eminent.
It’s time to put on the life jacket!
For most of America it feels like April 15, 1912, that’s the date the Titanic hit an ice berg in the Atlantic and within hours went down taking 1,517 people with it. But this time an entire nation could go down and when America sinks it will take practically the entire world with it. The question is no longer if, but when.
Regardless of the lucidity of the administration’s propaganda, we as a nation have been struck by an ice berg and we are sinking, audibly drowning in an abyss of debt.
While the Obama administration helped the large banks step into the life boats, our citizens were relegated to the lower lever steerage where lifeboats were not available.
Yes the banks have rebounded, and yes they will continue financing their cluster of relationships, rewarding those who have allowed the impenitent greed that surrounds Wall Street to go on, even while Middle Class America struggles to hold onto the remnants of a broken ship’s bowl.
We are told that everything is rosy and America is moving ahead, yet the unemployment figures (11 million unemployed) don’t reflect those sentiments. Neither does the current bankruptcy filings (6,000 a day).
The current US Debt is a staggering 12 .6 trillion and growing, at the rate of $4.02 billion per day
Inflation and depreciation of our currency is an inevitable as the looming debt crisis, even as the stock market is overvalued and an adjustment is also eminent.
It’s time to put on the life jacket!
Nobody will bail out America
Regardless of the Stock Market bubble and the reports that “attempt” to paint the economy in a favorable light, financially we are close to the tipping point from where there is no return.
America's swelling long-term debt, which is increasing daily, is close to passing that point, the "tipping point" that could trigger soaring interest rates and a plummeting dollar, that could trigger a "global depression," and we are about there!
The U.S. is facing $50 trillion in unfunded liabilities and around $62 trillion in total long-term debt, how can we pull out of the maze this administration has created? Simply we can’t!
What's ultimately at stake, Americans' faith in government and our standard of living!
Both may collapse unless we can find some 12 million jobs immediately, and that likelihood of that is untenable.
America has reached its pinnacle. We cannot assuage this tremendous debt this administration has burdened us with unless we have a tax base, but a realistic tax base. That means getting America back to work.
Even more importantly, these extravagant wars of choice are draining the economy, and financed through deficits, but enhancing the large corporate structure that surrounds the military Industrial War Complex.
Since 2001, to date, the total cost of war that has been allocated by Congress is $1.05 trillion, with $747.3 to Iraq and $299 to Afghanistan. The numbers include both military and non-military spending such as reconstruction.
These expenditures include only incremental costs, those additional funds that are expended due to the war. For example, soldiers' regular pay is not included but combat pay is included. Potential future costs, such as future medical care for soldiers and veterans wounded in the war, are not included. These numbers do not account for the wars being deficit-financed or that taxpayers will need to make additional interest payments on the national debt due to these deficits.
But the war is a hands’ off topic, even aware that these wars of choice have made America and Americans and the World less safe.
When Obama took office he had a choice, a fork in the road, to the right were initiatives to put America to work, to end these wars, and make peach in the world, and to the left was health care, although both were a necessary goal the agenda should have involved each road, and not just the one to the left. While congress and the President invested a full year attempting to author a Health Care Bill, that has already met with challenges and surely will fail, America still requires jobs, and an end to foreign hostilities.
But even more, aside from needing jobs, Americans require help to retain their homes.
While the government bailed the Banks out, it left Main Street America to fall on its face.
30 million Americans are underemployed, another 9 million are unemployed, The Bank REO’S are estimated to be around 7 million, with another 7 million in default and another 15 million potentially ready to walk away. Bankruptcy’s are at 6,000 a day and business failures remain on the rise, and in the end we as a nation have lost faith in our own government, both in its integrity and its ability to solve the issues facing all of us.
In the final analysis, the entire globe is in a similar state, there is no nation that has the ability to bail out America when we fall.
America's swelling long-term debt, which is increasing daily, is close to passing that point, the "tipping point" that could trigger soaring interest rates and a plummeting dollar, that could trigger a "global depression," and we are about there!
The U.S. is facing $50 trillion in unfunded liabilities and around $62 trillion in total long-term debt, how can we pull out of the maze this administration has created? Simply we can’t!
What's ultimately at stake, Americans' faith in government and our standard of living!
Both may collapse unless we can find some 12 million jobs immediately, and that likelihood of that is untenable.
America has reached its pinnacle. We cannot assuage this tremendous debt this administration has burdened us with unless we have a tax base, but a realistic tax base. That means getting America back to work.
Even more importantly, these extravagant wars of choice are draining the economy, and financed through deficits, but enhancing the large corporate structure that surrounds the military Industrial War Complex.
Since 2001, to date, the total cost of war that has been allocated by Congress is $1.05 trillion, with $747.3 to Iraq and $299 to Afghanistan. The numbers include both military and non-military spending such as reconstruction.
These expenditures include only incremental costs, those additional funds that are expended due to the war. For example, soldiers' regular pay is not included but combat pay is included. Potential future costs, such as future medical care for soldiers and veterans wounded in the war, are not included. These numbers do not account for the wars being deficit-financed or that taxpayers will need to make additional interest payments on the national debt due to these deficits.
But the war is a hands’ off topic, even aware that these wars of choice have made America and Americans and the World less safe.
When Obama took office he had a choice, a fork in the road, to the right were initiatives to put America to work, to end these wars, and make peach in the world, and to the left was health care, although both were a necessary goal the agenda should have involved each road, and not just the one to the left. While congress and the President invested a full year attempting to author a Health Care Bill, that has already met with challenges and surely will fail, America still requires jobs, and an end to foreign hostilities.
But even more, aside from needing jobs, Americans require help to retain their homes.
While the government bailed the Banks out, it left Main Street America to fall on its face.
30 million Americans are underemployed, another 9 million are unemployed, The Bank REO’S are estimated to be around 7 million, with another 7 million in default and another 15 million potentially ready to walk away. Bankruptcy’s are at 6,000 a day and business failures remain on the rise, and in the end we as a nation have lost faith in our own government, both in its integrity and its ability to solve the issues facing all of us.
In the final analysis, the entire globe is in a similar state, there is no nation that has the ability to bail out America when we fall.
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