Michael Snyder
Economic Collapse
Feb 11, 2013
How can anyone not see that the U.S. economy is collapsing all around
us? It just astounds me when people try to tell me that “everything is
just fine” and that “things are getting better” in America. Are there
people out there that are really that blind? If you want to see the
economic collapse, just open up your eyes and look around you. By
almost every economic and financial measure, the U.S. economy has been
steadily declining for many years. But most Americans are so tied into
“the matrix” that they can only understand the cheerful propaganda that
is endlessly being spoon-fed to them by the mainstream media. As I have
said so many times, the economic collapse is not a single event. The
economic collapse has been happening, it is is happening right now, and
it will continue to happen. Yes, there will be times when our decline
will be punctuated by moments of great crisis, but that will be the
exception rather than the rule. A lot of people that write about “the
economic collapse” hype it up as if it will be some huge “event” that
will happen very rapidly and then once it is all over we will rebuild.
Unfortunately, that is not how the real world works. We are living in
the greatest debt bubble in the history of the world, and once it
completely bursts there will be no going back to how things were
before. Right now, we are living in a “credit card economy”. As long
as we can keep borrowing more money, most people think that things are
just fine. But anyone that has lived on credit cards knows that
eventually there comes a point when the game is over, and we are rapidly
approaching that point as a nation.
Have you ever been there? Have you ever desperately hoped that you
could just get one more credit card or one more loan so that you could
keep things going?
At first, living on credit can be a lot of fun. You can live a much
higher standard of living than you otherwise would be able to.
But inevitably a day of reckoning comes.
If the federal government and the American people were forced at this
moment to live within their means, the U.S. economy would immediately
plunge into a depression.
That is a 100% rock solid guarantee.
But our politicians and the mainstream media continue to perpetuate
the fiction that we can live in this credit card economic fantasy land
indefinitely.
And most Americans could not care less about the future. As long as
“things are good” today, they don’t really think much about what the
future will hold.
As a result of our very foolish short-term thinking, we have now run
up a national debt of 16.4 trillion dollars. It is the largest debt in
the history of the world, and it has gotten
more than 23 times larger since Jimmy Carter first entered the White House.
The chart that you see below is a recipe for national financial suicide…
Of course things have accelerated over the past four years. Since
Barack Obama entered the White House, the U.S. government has run a
budget deficit of well over a trillion dollars
every single year,
and we have stolen more than 100 million dollars from our children and
our grandchildren every single hour of every single day.
It is the biggest theft of all time. What we are doing to our children and our grandchildren is beyond criminal.
And now our debt is at a level that most economists would consider
terminal. When Barack Obama first entered the White House, the U.S.
debt to GDP ratio was
under 70 percent. Today, it is up to
103 percent.
We are officially in “the danger zone”.
If things really were “getting better” in America, we would not need to
borrow so much money.
Our politicians are stealing from the future in order to make the
present look better. During Obama’s first term, the federal government
accumulated more debt than it did under
the first 42 U.S presidents combined.
That is utter insanity!
If you started paying off
just the new debt that the U.S. has accumulated during the Obama administration at the rate of one dollar per second, it would take
more than 184,000 years to pay it off.
So what is the solution?
Get ready to laugh.
The most prominent economic journalist in the entire country, Paul
Krugman of the New York Times, recently suggested the following in an
article that he wrote entitled “
Kick That Can“…
Realistically, we’re not going to resolve our long-run
fiscal issues any time soon, which is O.K. — not ideal, but nothing
terrible will happen if we don’t fix everything this year. Meanwhile, we
face the imminent threat of severe economic damage from short-term
spending cuts.
So we should avoid that damage by kicking the can down the road. It’s the responsible thing to do.
You mean that we might actually do damage to the debt-fueled economic
fantasy world that we are living in if we stopped stealing so much
money from future generations?
Oh the humanity!
It is horrifying to think that all that one of the “top economic
minds” in America can come up with is to “kick the can” down the road
some more.
Unfortunately, neither Paul Krugman nor most of the American people understand that our financial system
is actually designed to create government debt.
The
bankers
that helped create the Federal Reserve intended to permanently enslave
the U.S. government to a perpetually expanding spiral of debt, and their
plans worked.
At this point, the U.S. national debt is more than 5000 times larger than it was when the
Federal Reserve was first created.
So why don’t the American people understand what the Federal Reserve system is doing to us?
It is because most of them are still plugged into the matrix. A
Zero Hedge article that I came across today put it beautifully…
US society in a nutshell: Chris Dorner has been around for a week and has 222 million results on Google; the Federal Reserve has been around for one hundred years and has 187 million results.
If nothing is done about our exploding debt, it is only a matter of time before we reach financial oblivion.
According to Boston University economist Laurence Kotlikoff, the U.S.
government is facing a “present value difference between projected
future spending and revenue” of
222 trillion dollars in the years ahead.
So how in the world are we going to come up with an extra 222 trillion dollars?
But it is not just the U.S. government that is drowning in debt.
Just check out this chart which shows the astounding growth of state and local government debt in recent years…
All over the United States there are state and local governments that
are on the verge of bankruptcy. Just check out what is going on in
Detroit.
The only way that most of our state and local governments can keep
going at this point is to also “kick the can” down the road some more.
And of course most of the rest of us are drowning in debt as well.
40 years ago, the total amount of debt in the U.S. economic system (government + business + consumer) was
less than 2 trillion dollars.
Today, the total amount of debt in the U.S. economic system has grown to
more than 55 trillion dollars.
Can anyone say bubble?
The good news is that U.S. GDP is now more than
12 times larger than it was 40 years ago.
The bad news is that the total amount of debt in our financial system is now more than
30 times larger than it was 40 years ago…
At the same time that we are going into so much debt, our ability to produce wealth continues to decline.
According to the World Bank, U.S. GDP accounted for
31.8 percent of all global economic activity in 2001. That number dropped to
21.6 percent in 2011. That is not just a decline – that is a nightmarish freefall. Just check out the chart in
this article.
We are becoming less competitive as a nation with each passing year.
In fact, the U.S. has fallen in the global economic competitiveness
rankings compiled by the World Economic Forum
for four years in a row.
Most Americans don’t understand this, but the United States buys far
more from the rest of the world than they buy from us each year. In
2012, we had a trade deficit of
more than 500 billion dollars with the rest of the world.
That means that more than 500 billion dollars that could have gone to
U.S. workers and U.S. businesses went out of the country instead.
So how does our country survive if hundreds of billions of dollars more is flowing out of the country than is flowing into it?
Well, to make up the shortfall we go to the countries that we sent
our money to and we beg them to lend it back to us. If that doesn’t
work, we just print and borrow even more money.
Overall, the United States has run a trade deficit of
more than 8 trillion dollars with the rest of the world since 1975.
That is 8
trillion dollars that could have saved U.S. businesses, paid the salaries of U.S. workers and that would have helped fund government.
But instead, our foolish policies have greatly enriched China and the oil barons of the Middle East.
Sadly, politicians
from both political parties continue to boldly support the one world economic agenda of the global elite.
Just consider how destructive many of these “free trade” deals have been to our economy…
When NAFTA was pushed through Congress in 1993, the United States had a trade
surplus with Mexico of 1.6 billion dollars.
By 2010, we had a trade
deficit with Mexico of
61.6 billion dollars.
Back in 1985, our trade deficit with China was approximately
6 milliondollars (million with a little “m”) for the
entire year.
In 2012, our trade deficit with China was
315 billion dollars. That was the largest trade deficit that one nation has had with another nation in the history of the world.
In particular, our trade with China is extremely unbalanced. Today, U.S. consumers spend
approximately 4 dollars
on goods and services from China for every one dollar that Chinese
consumers spend on goods and services from the United States.
But isn’t getting cheap stuff from China good?
No, because it costs us good paying jobs.
According to the Economic Policy Institute, the United States is losing
half a million jobs to China every single year.
Overall,
more than 56,000
manufacturing facilities in the United States have been shut down since
2001. During 2010, manufacturing facilities in the United States were
shutting down at a rate of
23 per day. How can anyone say that “things are getting better” when our economic infrastructure is being
absolutely gutted?
The truth is that there are never going to be enough jobs in America
ever again, because millions of our jobs are being sent overseas and
millions of our jobs are being
lost to technology.
You won’t hear this on the news, but the percentage of the civilian
labor force in the United States that is employed has been steadily
declining every single year
since 2006.
Younger workers have been hit particularly hard. In 2007, the
unemployment rate for the 20 to 29 age bracket was about 6.5 percent.
Today, the unemployment rate for that same age group is
about 13 percent.
If you are under the age of 30 and you aren’t living with your
parents, there is a really good chance that you are living in poverty.
If you can believe it, U.S. families that have a head of household that
is under the age of 30 have a poverty rate
of 37 percent.
Our economy has been steadily bleeding huge numbers of middle class
jobs, and many of those jobs have been replaced by low paying jobs in
recent years.
According to one study,
60 percent of the jobs lost during the last recession were mid-wage jobs, but
58 percent of the jobs created since then have been low wage jobs.
And at this point, an astounding
53 percent of all American workers make less than $30,000 a year.
Oh, but “things are getting better”, right?
Maybe if you live on Wall Street or if you are
an employee of the federal government.
But for most families this economic decline has been a total nightmare. Median household income in America has fallen for
four consecutive years. Overall, it has declined by over $4000 during that time span.
Sometimes people forget how good things were about a decade ago.
About three times as many new homes were sold in the United States
in 2005 as were sold in 2012.
But we like to live in denial.
In fact, a lot of families are trying to keep up their standards of living by going into tremendous amounts of debt.
Back in 1983, the bottom 95 percent of all income earners in the
United States had 62 cents of debt for every dollar that they earned.
By 2007, that figure had soared
to $1.48.
Fake it until you make it, right?
But how much debt can our system possibly handle?
Total home mortgage debt in the United States is now
about 5 times larger than it was just 20 years ago.
Total credit card debt in the United States is now
more than 8 times larger than it was just 30 years ago.
We are a nation that is completely addicted to debt, but as the
financial crisis of 2008 demonstrated, all of that debt can have
horrific consequences.
As the economy has slowed in recent years, the Federal Reserve has decided that “the solution” is to
recklessly print money in an attempt to get the debt spiral cranked up again.
Have they gone overboard? You be the judge…
And of course this won’t have any affect on the value of the money that you have been saving up all these years right?
Wrong.
Every single dollar that you own is continually losing value…
Overall, the value of the U.S. dollar has declined
by more than 96 percent since the Federal Reserve was first created.
As the cost of living continues to go up and wages continue to go
down, millions of American families have fallen out of the middle class
and into poverty.
If you can believe it, the number of Americans on food stamps has grown from about
17 million in the year 2000 to more than
47 milliontoday.
But “things are getting better”, right?
Incredibly,
more than a million public school students in the United States are homeless. This is the first time that has ever happened in our history.
But “things are getting better”, right?
There are now
20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.
But “things are getting better”, right?
In 1999,
64.1 percent of all Americans were covered by employment-based health insurance. Today, only
55.1 percent are covered by employment-based health insurance.
But “things are getting better”, right?
Today, more Americans than ever have found themselves forced to turn to the federal government for help.
Overall, the federal government runs
nearly 80 different “means-tested welfare programs”, and at this point
more than 100 million Americans are enrolled in at least one of them.
According to the U.S. Census Bureau,
49 percent of all Americans live in a home that receives direct monetary benefits from the federal government. Back in 1983,
less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.
So is it a good sign or a bad sign that the percentage of Americans
that are financially dependent on the federal government is at an
all-time high?
And in future years the number of Americans that are receiving
benefits from the federal government is projected to absolutely
skyrocket.
Back in 1965, only one out of every 50 Americans was on Medicaid. Today,
one out of every 6 Americans is on Medicaid, and things are about to get a whole lot worse. It is being projected that Obamacare will add
16 million more Americans to the Medicaid rolls.
If you take a look at Medicare, things are very more sobering.
As I wrote
recently, it is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to
73.2 million in 2025.
At this point, Medicare is facing unfunded liabilities of more than
38 trillion dollars over the next 75 years. That comes to approximately
$328,404 for every single household in the United States.
Are you ready to contribute your share?
Social Security is a complete and total nightmare as well.
Right now, there are approximately 56 million Americans collecting Social Security benefits.
By 2035, that number is projected to soar to an astounding
91 million.
Overall, the Social Security system is facing a
134 trillion dollar shortfall over the next 75 years.
Oh, but don’t worry because “things are getting better”, right?
I honestly do not know how anyone can look at the numbers above and come to the conclusion that the economy is in good shape.
We have accumulated the largest mountain of debt in the history of
the world, our economic infrastructure is being gutted, we are bleeding
good jobs, government dependence is at an all-time high and we are
getting poorer as a nation with each passing day.
But other than that, everything is rainbows and lollipops, right?
If you want to see the economic collapse,
just open up your eyes.
And if dramatic changes are not made quickly, things are going to get much, much worse from here.
Please share this article with as many people as possible. Time is
quickly running out and there are a whole lot of people out there that
we need to wake up while we still can.
