For two years we have been forced to listen to the despicable fiction that the U.S. economy is enjoying a “recovery”. I say “despicable” because if the U.S. government (and media talking-heads) hadn’t kept lying to the American people that “things are getting better” then the U.S. government would have been forced to actually engage in positive measures for the American people, and the overall U.S. economy.
Instead, Americans were subjected to “faux stimulus”, where the Obama regime sprayed $100’s of billions at the U.S. economy but where most of that money went into “food stamps”, unemployment benefits, or simply disappeared into the pockets of Wall Street bankers. There was virtually nothing done to directly “stimulate” employment growth – despite the worst unemployment problem in the U.S. since (at least) the Great Depression.
Now, as the U.S. economy is quite obviously turning lower again, Americans are finally shedding their “rose-coloured glasses” and beginning to view the U.S. economic nightmare for what it really is. That conclusion is strongly reinforced by a pair of statistics.
A CNN poll shows 48% of Americans predicting “another Great Depression in the next 12 months.” While that percentage might have been slightly worse during the worst of the 2008 crisis, this new (extremely pessimistic) number comes after more than two years of a supposed “economic recovery”. Obviously if there had been any real improvement in the economic fundamentals at the household level there couldn’t have possibly been such a serious erosion of public sentiment.
That first expression of despair is backed up a statistic at least as bleak, if not more so. A recent U.S. survey found that 85% of U.S. college graduates were forced to move back home to live with their parents. If there was one, single number which could shriek “no jobs” in the U.S. more clearly than any other, this is it.
At the other extreme in the realm of education, roughly ¼ of all young, adult Americans are high school drop-outs, with that number rising to about 50% in the under-funded school districts into which most of the U.S.’s ethnic minorities are funneled. Combining the two numbers, roughly half of all the young adults in the U.S. are unemployed college graduates forced to live at home, or high-school drop-outs whose best “hope” for the future would be some menial, minimum-wage job.
Those numbers don’t tell us that a U.S. Great Depression is “coming in the next 12 months”, but instead echo what I have been writing all along: the U.S. entered a “Greater Depression” in 2008 – from which it has never emerged.
This conclusion is easily reinforced once people understand how easy it is for governments to fake “economic growth”. All it takes is for governments to deliberately underestimate inflation – and then each percentage-point by which inflation is understated instantly becomes a percentage-point of “GDP growth”. As I have explained many times previously, all GDP estimates must be fully “deflated” by the prevailing rate of inflation, otherwise price increases are transformed into “economic growth”.
With real U.S. inflation being (deliberately) “underestimated” by at least 6%, while the latest number for “GDP growth” was an anemic 1.8%, you don’t require a degree in mathematics to figure out that not only is there no “growth” in the U.S. economy, but it is once again shrinking rapidly.
Obviously the “future” of any/every economy is its next generation, and here the U.S. simply has no hope, at all. Compounding the massive, structural unemployment of U.S. college graduates, soaring eduction costs and ever-less government “assistance” mean that U.S. college-grads are now far more indebted than any other graduates in the history of our species.
The average debt-load for a U.S. college graduate is now $50,000. Indeed, U.S. student loans have been exploding upward with such ferocity that total U.S. student loan debt has exceeded total U.S. credit-card debt for the first time in history. If you’re an unemployed U.S. college graduate, living with your parents, and staring at a $50,000 ‘mortgage’ on your future, it doesn’t require much imagination to predict a “Great Depression” in the next 12 months.
Paying interest on $1 trillion in credit card debt has been an utterly pointless drain (and drag) on the U.S. economy. Similarly, racking-up $1 trillion of student loan debt (and now paying interest on it) – only to end up unemployed and living with one’s parents is an equally pointless waste of economic resources. That $1 trillion (plus all the interest being accrued on it each day) could have produced enormous dividends had it instead been used as start-up capital for small businesses.
This is not to criticize all of those studious Americans who laboured to earn degrees. It was their own government which repeatedly told them (and lied to them) that “higher education” was the path to success. Thus the only “crime” which these heavily-indebted college grads are guilty of is trusting their own government. They have now squandered $1 trillion on that misplaced trust, and all that the U.S. government (and the bankers lurking behind it) have to say to these unemployed graduates is “pay up”.
More generally, the U.S. propaganda-machine reported that U.S. consumer confidence “unexpectedly declined” in May. Obviously the use of the word “unexpected” here is nothing short of absurd.
In addition to all of the extremely bleak factors listed above, Americans are being battered by the following:
2) The neglected/abandoned/foreclosed homes which pock-mark towns and cities all across the U.S. are not only a visual blight, but the crime and squatters associated with them are making neighbourhoods steadily less-safe and livable for the families who remain.
3) The cost of “necessities” (i.e. food and energy) are soaring at the fastest rate in decades, while the Federal Reserve lies to Americans, telling them that inflation is well “contained” (yes, “contained” in every new Bernanke-bill which “Helicopter Ben” cranks-out).
4) Despite the fact that the average American has been enduring falling (real) wages for 40 years, all they are hearing from Republican “leaders” (at both the state and federal level) is that U.S. families can look forward to nothing but “more cuts”: in unemployment insurance, in their pensions, in their health-care – and in their jobs, as any significant spending-cuts inevitably have a serious impact on employment.
Yet with all this transpiring in the U.S. economy, we still see these media-liars expressing “surprise” at the lack of confidence among Americans. Obviously the “surprise” is just as feigned as their belief that the U.S. economy is actually growing.
As I explained in a recent commentary, this pathetic charade around the issue of “confidence” is in fact one of the key elements in the entire propaganda-campaign of the U.S. government (and the Wall Street bankers pulling their strings). This is now nothing but a Ponzi-scheme economy, and like any/all scams it can only continue as long as the confidence of the “chumps” (i.e. the American people) can be maintained.
As the renewed deterioration of the U.S. economy now accelerates, maintaining this illusory confidence becomes increasingly impossible for the U.S. government – and thus the Ponzi-schemes teeter precariously. Nothing is more “precarious” than the banksters’ $1.5 quadrillion “bubble” in the derivatives market (more than 20 times larger than the entire global economy), and a huge chunk of this bubble remains tied to the crumbling U.S. housing market.
Stacked-up along-side all of the “debt bubbles” in the U.S., we see an entire economy now ready for a sickening implosion which will not merely “echo” but will likely exceed the economic disintegration of the Soviet Union. Having squandered every policy tool (and “stimulus” dollar) at its disposal, the U.S. government is now utterly powerless to counteract the coming collapse. This leaves absolutely nothing standing in the way of a total collapse of the U.S. economy other than the printing press of the Federal Reserve,
Can you say “more quantitative easing” Ben Bernanke? I knew you could.