Saturday, February 4, 2012

Special Report: On The Real State of the Economy

I've tried to take the glass-is-half-full  approach to the economy recently especially after several months of the unemployment rate declining (although unemployment is just one major factor in this economic mess). But when I read and heard the administration and its enablers popping the champagne corks after yesterday's unemployment report, it made me angry. It made me angry because the administration and especially the media just refuse to be honest with us. They are more interested in circling the wagons to protect this current administration (I'm not naive. I know they've been doing this for three years now). This dishonesty is also dangerous in my opinion. It raises the hopes of many Americans when so much damage has been already done to so many Americans. So allow me to show you the facts and then you can decide who is telling the truth.

  • Beginning with yesterday's unemployment report, it showed it declining again. That's always a good trend. But many of the reports didn't show several other very important data points. Namely, the economy lost 2,689,000 jobs in January (699,000 were part-time jobs). The rise of 243,000 non-farm payrolls is an adjustment. In addition, over a million people fell out of the job market. There are also 5.6 million fewer jobs today than at the start of the recession. And duration of unemployment increased. In other words, the proportion of people with a job fell since 2007 (from about 63% in 2007 to the current 58%).  Dept. of Labor numbers/Fed Reserve/NY Post
  • Unemployment among African Americans is over 15% officially. Unemployment of younger black males is over 40%. Forbes
  • The number of Americans on food stamps has exploded from about 31 million in 2008 to over 46 million in 2011. CNN Money
  • More and more young people have been forced to live with their parents (the unemployment rate of oung people ages 16-19 years of age is 23%). In addition, their parents are helping more and more young adults purchase homes and vehicles. That's a sign that young people are still having a difficult time in this economy. USA Today and US Census

  • The U.S. Poverty Rate increased to over 46 million last year, the highest since this data has been recorded. US Census/UK Guardian
  • Approximately 22% of American children now live in poverty. LA Times/Huffington Post
  • One in two people in America are now classified as low income. One in five families earns less than $15 grand a year. US Census
  • The poverty rate increased among every racial and ethnic group with the exception of Asians. US Census
  • Adjusted for inflation, median household income fell about 6.7% between June of 2009 and June 2011. NY Times
  • Less than a quarter of American companies plan on hiring in 2012 according to Career Builder who surveyed over 3000 HR executives. LA Times
  • According to a recent piece in USA Today, the average age of an American car is now almost 11 years old.
  • The Bureau of Labor Statistics reported in September that the number of self-employed shrunk by about 2 million. They report contributing factors include tightened bank lending, sluggish consumer spending, and depressed home values make it difficult to get home-equity loans generally used for capital in start-ups.
  • The Federal Reserve reported late last year that the net worth of households fell by 4.1% or $2.2 TRILLION since 2008. The decline comes out to almost $8 grand per household.

  • As I write this, the national debt is now at $15,314,603,178,000 (and those number keep changing every second). The U.S. Federal Budget Deficit is now $1.3 trillion. Debt per citizen: $48,930.00. Debt per taxpayer: $135k. Debt Clock Real Time. (Since I wrote this sentence, the national debt rose by over $500k).

  • Health care costs continue to climb. Average premium for a family rose 9% in 2011 compared to 3% in 2010. Kaiser Family Foundation based on 2,088 employers nationwide.
  • The average of 15 U.S. factories close each day in America. Cleveland Plain Dealer PolitiFact Ohio.
  • In February of 2009, the price of a gallon of fuel was $1.952 (CNN Money). Average price of a gallon of gas in January of this year: approximately $3.29-$3.66. LA Times
Are there parts of the economy that are improving? Yes. But keep this important fact in mind when you hear the Obama administration and its enablers proclaiming the economy is improving: the government has poured trillions of dollars into the economy---dollars we don't have. So another important question remains: how long can we sustain pumping up an economy with money we don't have? But if you don't believe me, perhaps you'll believe Pres. Obama when he said in May of 2009 when he called current deficit spending "unsustainable." (Bloomberg News).  And as recently as his State of the Union last month he said, "We have to confront that our government spends more than it takes in...That's not sustainable."

So who are you going to believe?