14 Pieces Of Really Bad News For The U.S. Economy

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Federal Reserve Governor Kevin Warsh told an audience on Friday that the U.S. economy is in the midst of a cyclical recovery and that there are “encouraging” signs of improvement in financial markets.  Many other governmental and media talking heads have uttered similar pronouncements about a “recovery” which will put the U.S. economy back on track.  But are we really experiencing a recovery?  If so, then why are foreclosures still hitting record levels?  Why is unemployment so high?  Why are so many cities and states on the verge of bankruptcy?  Why are so many average Americans hurting so much?  The truth is that what we are experiencing now is a period of stabilization before the “second dip” of the double-dip recession so many economists have been talking about hits.  What the U.S. economy is actually in the midst of is a complete and total structural failure.  The American Dream is going to permanently die for millions of American families.  Millions more are going to lose their jobs and millions more are going to lose their homes.  This is what we get for piling up the biggest mountain of debt in the history of the world and outsourcing much of our manufacturing and industry to places like China and India.  Now we are an aging, bloated dinosaur trying to survive on a service economy and the biggest debt bubble of all time.

 

It would be great if we could experience at least a temporary economic recovery, because very few people are ready for a total economic meltdown right now.  Most of us still need more time to prepare for what is ahead.  But unfortunately almost all of the recent economic news is bad.

The following are 14 pieces of really bad news for the U.S. economy….

#1) According to RealtyTrac, foreclosure filings were reported on 367,056 properties in the month of March.  This represented an increase of almost 19 percent from February, and it was also an increase of nearly 8 percent from March 2009.  In fact, the number for March 2010 was the highest monthly total since RealtyTrac began issuing its report in January 2005.  That is really, really bad news for the real estate industry.

#2) And yet things are expected to get even worse for the housing market.  RealtyTrac projects that there will be 4.5 million home foreclosures before the end 2010.  If you figure that there are approximately 4 people per household, that is another 18 million people that will be forced out of their homes by the end of the year.

#3) Interest rates have already gone up, and most experts forecast that they will continue to increase throughout the rest of 2010 and into 2011.  This is going to make existing adjustable mortgages more expensive, and this will also make it even harder for home buyers to purchase a home.  Needless to say, this is likely to put significant downward pressure on housing prices.

#4) It turns out that the much celebrated foreclosure assistance program introduced by Barack Obama and the Democrats last year is helping very, very few mortgage holders, and the default rates for those who have managed to receive help are still very high.  From all appearances it seems as though the U.S. government is unable to do very much at all to turn around the real estate market.

#5) The unemployment crisis continues to get worse.  The number of unemployed Americans per job opening has started to increase again, hitting 5.5 in February.  There just are not nearly enough jobs for everyone, and this is creating a great deal of despair among unemployed workers.  Many of those who do manage to find work have only been able to obtain part-time employment.  Gallup’s underemployment measure hit 20.0% on March 15th.  This was up from 19.7% two weeks earlier and 19.5% at the start of the year.  That is not a good trend.

#6) The IMF is forecasting that unemployment will remain high for at least two more years.  Unfortunately, IMF forecasts tend to be chillingly accurate, so those Americans hoping for an employment boom in the coming months are likely to be quite disappointed.

#7) Even with the economy struggling and so many out of work, the price of gasoline continues to skyrocket.  It is almost as if the 1970s have struck again and we are back in the days of the misery index.  In some areas of the United States, people are already paying as much as $3.50 for a gallon of gasoline, and many experts are predicting that gasoline could hit $4.00 a gallon by the end of 2010.

#8) And health care costs show no sign of slowing down either.  Even the Los Angeles Times (which is radically pro-Obama) is admitting that the new health care law will not prevent health care premiums from continuing to increase dramatically.  So why did they pass that law again?

#9) Well, it turns out that the new health care bill is not good for physician-owned hospitals either.  According to the executive director of Physician Hospitals of America, more than 60 doctor-owned hospitals across the United States that were in the development stage will now be canceled.  Why will they be canceled?  Well, it is because of the new health care law that Barack Obama and the Democrats wanted so badly.  Apparently the new law singles out doctor-owned hospitals, making new doctor-owned projects ineligible to receive payments for Medicare and Medicaid patients.  Who in the world came up with that bright idea?

#10) Not only that, but soon the United States will be facing a critical shortage of physicians.  The U.S. health care system was already facing a shortage of approximately 150,000 doctors in the next decade or so, but thanks to the health care bill passed by Congress, that number could grow by several more hundred thousand.  Ouch!

#11) Cities and states across America are facing unprecedented financial pressure.  For example, many analysts believe that the city of Los Angeles is on the verge of bankruptcy.  Of course the entire state of California is a financial wasteland at this point, so that is not that much of a surprise.

#12) Several prominent economic analysts are now declaring the the risk that the government of Japan will go bankrupt is very real.  If Japan does financially implode, that will have major implications for the United States, as Japan is one of our biggest and most important trading partners.

#13) The world’s five biggest AAA-rated countries (including the United States) are all at risk of soaring debt costs and will have to implement austerity plans that threaten “social cohnesion”, according to a report on sovereign debt by Moody’s.  To get an idea of how popular “austerity plans” are, just check out the riots that have been happening in Greece lately.

#14) Trillions have been pumped into the U.S. economy over the last couple of years and officially all we have to show for it is about 2% growth.  Oh, and an exploding national debt that our children and grandchildren will never, ever be able to pay off.

The U.S. government continues to spend money like it is water, and yet the U.S. economy continues to be trapped in a death spiral.  The reality is that we have created an economic nightmare from which there is no escape, and it is going to take every ounce of government spending and intervention just to keep the economy functioning somewhat normally.  Unfortunately the economic crisis will become so dramatic at some point that even the government will lose control and that is when everything will really hit the fan.

So prepare yourself and your family now.  Very difficult times are coming, and the vast majority of Americans will be totally unprepared for what is going to happen.

Don’t be one of them.

  • e rheault

    Good article I agree with most of your predictions this will be interesting to watch unfold.

  • Great article! It inspired me.

    Our world has changed and most do not realize it. Money, the almighty purveyor of our well-being has absolutely no value unless someone says it does. It used to be tied to gold, a tangible physical element. You could not print more money unless you had gold to back it. However, in 1971, the US abolished the gold standard and and said the money was tied to GDP and today the value of money is tied to debt.

    http://www.thecomingdepression.net/main-street/bankruptcy-main-street/14-bad-signs-for-the-north-american-economy/

  • Jeff

    The way I understand it, the end of the Mayan calendar is not the end of the world, but a transition to a different way of life for us all. Transition is always difficult and the entire family of man is included in this transition.

    Naturally we have no idea what to expect. I have some extra food, water and ammo to go with my PM’s. Will I need any of it, or all of it and more?

    I’m close to 2 years without a job and now that there are 5 of us for every open position, I guess it’s gonna get really ugly as the number of unemployed increases and the job openings decline.

    We really do live in interesting times.

  • MacGuy

    What suggestions do you have in order to prepare for such a crisis?

  • brian

    Come on guys, its not that bad…. clearly the homes were over priced, move forward and give the house back to the bank, and live there as long as possible and don’t pay the mortgage…Do study and learn a new trades to compete and yes do get a job, for you ,your country,and ur insanity… quite whinning and just do it, forget the house, its not a cash cow any more!!!!!!!!!!!!!!!

  • ^^^ Good point Brian, but Americans also have to realize that their SYSTEM is fundamentally BROKEN. When my PC running Windows goes haywire, I reformat the damn hard disk and do a clean reinstall.
    Of course, I run Linux Mint which is based on Ubuntu (no viruses, trojans, worms, malware, etc.). And I’ve also upgraded to Windows 7.
    My point is that Americans need to DEMAND a real CHANGE. A lot of you are big fans of Ronald Reagan but look at the policies he (er his cronies) initiated: massive military buildup, war on drugs that prevents industrial hemp and cannabis to be used in the US and that would lower costs and create tons of NEW jobs, etc. Real leaders who would’ve taken a different course of action are either assassinated (JFK & his bro) or voted (Jimmy Carter) out of power. And INTELLIGENT peeps like Ron Paul, you never give a chance. WTF??? So YOU the PEOPLE are also to BLAME for the mess America (and the world) is in.

    America at one time was a great world leader, but she’s gone down thanks to poor management (maybe deliberately?) at the helm. Japan is full of engineers; America is full of LAWYERS (liars?). Iran’s & China’s main leaders are all scientists. And your’s? I think you get my point.

    God bless the REAL America that brought us HP, Apple, Atari, Bugs Bunny and the rest of the Hana Barbara crew, Disney, Star Trek, Boeing, GE, Sun Microsystems, Oracle, Yahoo, Microsoft, Google, Netscape, Mozilla Firefox, Open Source Software, TCP/IP, Digital Equipment Corp. (DEC), VAX/VMS, C/C++, OS X, Steve Jobs, Bill Joy, Phillipe Khan (of Borland), Intel, AMD, BSD Unix (FreeBSD, NetBSD, OpenBSD), MIT, UC-Berkley, Stanford…
    This is the America we want to see dominating the world…not the one lead by self-righteous Big Oil Neocons and Democrats fixated on warmongering and profiteering.

  • Uncle B

    Fact is, America must switch from a foreign liquid based economy to a domestic electric economy as fast as possible. Remember the Oil Embargo of the 70’s? Where America’s military were given their orders. not from Washington, but from the oil barons in the Middle East! We have yet to correct that little problem haven’t we? We are witnessing the end of the American Empire. It dies as all those before it have, with funny money at the front of the parade, and slothful living, without moral fiber to protect the family unit, at the other end of the parade! No family structure = no nation! Revert to the family farm, they cry! It is far too late to turn back! America was set on a suicidal course by the Corporatists and Capitalists – no respecters of Democracy – shortly after WWII! America is doomed to stay on this path to the bitter end, much as Nazi Germany was in WWII! Blinkers on! Forward into battle! We will follow the U.S.S.R. through the gates of Hell, singing songs of our own Glories as we march past the Devil himself! We have not learned from our Canadian neighbors how to preserve Democracy with large doses of Socialism, and we have allowed the cancers of democracies, Capitalism and Corporatism to gain astronomical powers and we suffer for it! America is dead on the waters, the oil-spoiled waters of the Gulf! We cannot turn back now, and replace the bus and airplane routes with nuclear/electric powered electric bullet trains for our patriots, as China has been so wise to do! We are a gasoline guzzling machine bent on self-destruction. Even if you run for the hills, your very ammunition for survival is foreign oil based and that oil is diminishing. Diminishing oil precludes Americans forced by a very weak dollar to bid for oil on world markets against a much stronger, more stable Yuan for oil, and this larger share demanded by a Burgeoning Asia will be taken right out of the gasoline pumps in America! We will pay dearly at the pumps shortly! Enjoy the proliferation of Asian 4 cylinder cars today! Tomorrow you may not even have fuel for them, and be forced into “short-hop” rechargeable battery cars! Asians have already devised a means of exchanging batteries in Tokyo’s taxi cabs just to satisfy the realities of running Solar, Wind, Wave, Hydro, Tidal, Geothermal, and Nuclear produced electricity for cars! America lags behind! 32nd in education! By shameful admission of our own President! We hardly produce a very few, relatively poor cars for domestic use! Shame! What was taught in Michigan’s Engineering schools besides passing foot balls with great skill? Not much I am afraid!Detroit, the ruins of which are a monument to Corporatism and Capitalism in control, shames Americans on TV and on the Net! Our Banksters screwed the nation! Publicly! and were not punished! No hangings? no rope stretching for treason? No “John Wayne” type Americans left? Yes! Big awards and cushioned retirement plans for crooks? Not good America! Now, our famous sea food basket, the Gulf, lays in ruins? Done by Corporative powers set free by Bush and company? In a collective, social group that allows cost over-runs for safety’s sake, like NASA, we excelled! We walked on the Moon! We brought the Astronauts back! Alive! We can’t drill for oil safely? Why not? The corporative involvement that’s why not! What the Hell is going on in America! Who really rules? To answer that question, Google, Torrent, the movie “Who Stole The Electric Car”. Watch it carefully! What does it say? What happened to the “Miracle Batteries” that made it all possible? Did the Socialists steal them? Did the government ban them? Did the inventor get greedy? Just what the frick did GM(America) do with the miracle cars and the miracle batteries? Why? Who really runs the U.S.A. inc.? and, where is the U.S.A. Democracy to the world? What happened here while we smoked all that dope? drank all that booze? popped all those pills? Ducked and ran for cover in cushy corporative jobs? Asians know! they stole our economy while we were partying!Now, they are gonna kick our asses! That’s what America!

  • misanthropope

    “So why did they pass that law again?”

    you know, in my experience, people who use rhetorical questions in print are generally aware that they don’t have a very strong argument for the implied assertion.

    one of the major effects of insurance overhaul is that insurance companies are now obliged to provide a _service_ for the premiums they collect. “get sick/ get dropped” may have provided a cost savings some small portion of which was passed back to the customer, but thinking adults may not find that to be the final word on the arrangement

  • Daryl

    I think the real issue we have is regulation. Companies don’t like regulation because it means a little less profit. So they tell the politicians, with money of course. And laws for regulating bank spend and industrial safety/pollution get shot down or never go as far as they should. Then later you find out that this has cost your country twice as much as whatever benefit your country received from the “added production” of not regulating.
    Its just plain stupid.
    The government should operate in a manner where there interest is in the general public. Properly enforced regulation does this, and doesn’t require the federal government to create new departments or expand budgets.
    Right now you have an government that is bloated and toxic and cant accomplish what it was originally intended to do. The problem is with both parties. The problem is the political games. The problem is the lack of true conviction in the citizens. At some point there has to be change for America to become great and that change isn’t going to come from a Republican or Democrat.

  • Uncle B: Good Comment . Thank You. The Average American is living in a fantasy world by using military might to protect hot air. He/She is Financially illiterate. But this Condition was definitely not there 40 years ago. Some where after the Vietnam war – there must be a Great Pentagon-CIA-Oligarch secrecy that robbed the USA of the 1945 to 1970 USA that we know of from the People. This was done in so gradual steps that the engineering is not Noticeable. So sly and subtle are their methods that it is nothing short of diabolical. The People will only wake up when the price of a loaf of bread is more than a movie ticket and an 80 year old will still have to work for his living!

  • losing it

    Do you think the usa will be. No more? Do you think that it will ever cease to exist? Who do you think will be the new world power? Perhaps china? Do you think the usa will always have government? Will the usa become a land of.unbelievable chaos?

    Just some things to think about god is real. And he loves us all. Everything he has done he has done for us any answers you are looking for can be found in his word and through having a personal relationship with christ this may sound crazy to u or hoaxie but it is real. Find peace through these hardx times with god. God is. Seeking to recruit a team of. Faithful believers into his. Powerful infantry and all are welcome so let’s win this battle together through christ.

  • George Ferenzi

    Screw American greed go pay big ticket prices for your stupid
    sports teams. Fill their pockets as they laugh all the way to the
    bank.

    All blue collar american only worry about their beer,drugs, and
    who is going to win the next game.

    Let them suffer.