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Bye Bye American Pie: 10 Reasons Why America’s Economic Pie Is Rapidly Shrinking

All over the mainstream media today, the wealthy are being pitted against the poor.  Those advocating for the wealthy claim that if we could just cut the taxes for the rich and make things easier for them that they will create lots of jobs for the rest of us.  Those advocating for the poor claim that the gap between the rich and the poor is now larger than ever and that if we could just get the workers to fight for their rights that we could get things back to how they used to be.  It is a very interesting debate, but it totally ignores a reality that is even more important.  America’s economic pie is rapidly shrinking.  As part of the new globalist economy, every single month massive amounts of U.S. wealth is being transferred out of the United States and into foreign hands in exchange for oil and cheap plastic trinkets.  In addition, every single month our national government goes into more debt, our state governments go into more debt and our local governments go into more debt.  The interest on all of this debt represents a tremendous transfer of wealth.  What most Americans fail to grasp is that our collective wealth is getting smaller.  There is now less of an “economic pie” for all of us to divide up.

When it comes to economics, most people have a presupposition that the United States will always be getting wealthier.  But that is completely and totally wrong.  The truth is that we have been steadily getting poorer over the last several decades, and now we are bleeding national wealth at such a pace that it is almost unimaginable.

All over the country tremendous economic pain is starting to set in, and tens of millions of people are getting very angry.  Americans are lashing out at both political parties, at their employers and at each other, but the reality is that the vast majority of them simply do not understand why all of this is happening.  They just want to be told that someone is working to “fix” the problem with the economy and that things will get back to “normal” soon.

But things are not going to be getting back to “normal”.  Please follow along as I explain many of the reasons why America’s economic pie is rapidly shrinking….

#1 The Biggest Transfer Of Wealth In The History Of The World

Every single month tens of billions of dollars of our national wealth is transferred to the rest of the world.  We buy far more from the rest of the globe than they buy from us, and this difference is called a trade deficit.  Most Americans don’t even think about the trade deficit, but the truth is that it represents a transfer of wealth that is almost unimaginable.

Every month when the oil-exporting nations of the Middle East send us oil, what do we send to them?  Our dollars of course.  So we burn up their oil in our vehicles and end up with nothing at the end of the month, and they end up with a big pile of our money.  So what happens the next month?  The exact same process repeats again.

But it is not just oil-exporting nations that we are transferring our national wealth to.  Back in 1985, the U.S. trade deficit with China was 6 million dollars for the entire year.  For this past August alone, the trade deficit with China was over 28 billion (that’s billion with a “b”) dollars.

In other words, the U.S. trade deficit with China in August was more than 4,600 times larger than the U.S. trade deficit with China was for the entire year of 1985.

That is why China has so much money to lend back to us – we have been transferring tens of billions of dollars of our national wealth to them month after month after month.

#2 That Great Sucking Sound You Hear Is Our Jobs Leaving The Country

The big global corporations that now dominate our economy have realized that they don’t really need to hire “expensive” American workers after all.  When all of these “free trade agreements” (which are neither “free” nor “fair”) were being debated, the American people were not told that they were going to be merged into one huge global labor pool and that they would soon be directly competing for jobs with the cheapest workers in the world.  Today there are hordes of laborers on the other side of the globe that will gladly work for less than 10 percent of what a typical blue collar American worker makes.

So can American workers compete with that?  Well, just look at what is happening.  The jobs are flying out of this country.  In fact, the United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

But it just isn’t jobs at the low end of the scale that are being lost.  Since the year 2000, we have lost 10% of our middle class jobs.  In the year 2000 there were about 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs.

The truth is that now there are not nearly enough jobs to go around.  Just check out the average duration of unemployment in America – it is now way, way above historical norms….

#3 Unemployed Workers Do Not Create Wealth

When U.S. workers are forced to sit on the sidelines, they drain wealth instead of creating it.  At a time when millions of American workers should be involved in creative economic activity, they are collecting food stamps and unemployment checks instead.

One out of every six Americans is now enrolled in a federal anti-poverty program.  As 2007 began, 26 million Americans were on food stamps, but now 42 million Americans are on food stamps and that number keeps rising every single month.

The rest of the American people are going to support all of these unemployed and underemployed workers somehow.  Either we are going to provide them with good jobs, or we are going to have to pay for their food stamps and welfare checks.

#4 The National Economic Infrastructure Is Being Destroyed

Proponents of the emerging one world economy talk about how great it is to have so many really inexpensive products, but they don’t realize what the hidden costs are.  The truth is that the United States is rapidly becoming deindustrialized.

Since 2001, over 42,000 U.S. factories have closed down for good.  Meanwhile, hordes of shiny new factories are going up in places like China and India.

Sacrificing our economic infrastructure for cheap foreign imports is kind of like tearing off pieces of your house just so you can keep the fire going.  Eventually, you simply are not going to have much of a house left.

#5 The Government Is Absolutely Exploding In Size, And Government Workers Produce Relatively Little Wealth

It seems like the federal government keeps exploding in size no matter who we elect.  George W. Bush was supposed to be a “conservative”, but the truth is that the U.S. government grew in size more under him than during any other presidency.

But there is a big economic problem when it comes to big government.  It costs a ton to run, but it produces relatively little of economic value.

Just how much is this big federal government costing us?  Well, the total compensation that the U.S. government workforce is going to take in this year is approximately 447 billion dollars.

Not only that, but according to a recent study conducted by the Heritage Foundation, federal workers earn 30 to 40 percent more money on average than their counterparts in the private sector.

The U.S. economy would be much better off if the federal government was dramatically reduced in size and large numbers of government workers started doing something that actually created substantial economic value instead.

#6 Military Spending – Trying To Police The World Is Draining Us Dry

Many people claim that military spending is good for the economy because it provides lots of jobs.  However, the truth is that when you examine what those jobs are actually producing, you quickly realize that they are not creating real wealth.  Instead, they are just feeding a war machine that is designed to kill people and blow things up.

Now, the truth is that we will always need a powerful military and a strong national defense.  But trying to police the world is absolutely draining our national resources.

At this point, it is estimated that the U.S. government has spent over 373 billion dollars on the war in Afghanistan, and over 745 billion dollars on the war in Iraq.

Not only that, today the U.S. military has over 700 bases (some say it is actually over 1000 bases) in 130 different countries around the globe.  It is estimated that it costs about $100 billion a year to maintain these bases.

All of this money may or may not be making us safer, but it is undeniable that it is not going to create wealth and economic activity here at home.

#7 America Is Getting Sicker And It Is Draining Our Wealth

The American people are not going to be creating wealth if they are constantly sick all the time.  The truth is that the toxins in the food that we eat, in the stuff that we drink and in the air that we breathe are destroying our health.

According to one recent report, the United States has dropped to 49th place in the world in overall life expectancy.

49th place?

Diseases such as cancer, heart disease and diabetes are absolutely exploding.  This may be good for the “medical industry”, but how in the world are we supposed to work hard and create wealth if all of us are sick all the time?

#8 The U.S. National Debt Nightmare

Thirty years ago, the U.S. national debt was about 1 trillion dollars.  Today, it is rapidly approaching 14 trillion dollars.

Every single year, hundreds of billions of dollars in interest on that debt gets transferred from U.S. taxpayers to the owners of that debt.  We get absolutely nothing in return for these interest payments.  They are a pure transfer of wealth.

Many of the owners of this debt are international bankers or foreign governments that never reinvest the dollars they are getting back into our system.

#9 The Municipal Debt Bubble

When you bring up the term “government debt”, most Americans only think of the debt of the federal government.  But the truth is that there are literally hundreds of state and local government debt implosions happening all across the United States.

As you read this, state and local government debt is now sitting at an all-time high of 22 percent of U.S. GDP.  All of these state and local loans must be serviced, and the interest costs on them are substantial.  Once again, all of these interest payments (mostly going to international bankers and foreign governments) represent pure transfers of wealth.

#10 America’s Addiction To Debt

Debt is literally draining this country dry.  Just as with federal debt and municipal debt, consumer debt is a tremendous drain on our wealth.  For example, if you put a $500 television on your credit card but then you eventually pay back $2000 to the bank because of interest and fees, who is getting rich and who is being drained?

Posted below is a chart that shows the growth of total credit market debt over the last several decades.  When you add up all forms of debt in the United States (government debt + business debt + consumer debt), it comes to over 50 trillion dollars.  In fact, total credit market debt now sits at approximately 360 percent of GDP.  It is the biggest debt bubble in the history of the world….

So who does all of this debt benefit?  It benefits the international bankers and foreign governments that are becoming insanely wealthy from all of the interest that all of this debt is generating.

Could you imagine just getting a small slice of the interest that over 50 trillion dollars of debt is generating?

When you look at the chart above, it is easy to grasp why life has been so “good” over the last thirty years.  We have been enjoying a debt-fueled binge of historic proportions and it has been a lot of fun.

But now a day of reckoning is at hand and our national wealth is being funneled out of our hands at a pace that is almost unimaginable.

When wealth gets transferred out of our hands, that means that the “economic pie” that we all get to divide up becomes smaller.  As it continues to shrink, large numbers of Americans are going to become increasingly angry and increasingly desperate.

Unfortunately, the problems that we are facing took decades to develop and they simply cannot be turned around overnight.  In fact, our problems continue to get even worse every single month.

It is time to wake up and realize that the “good times” are coming to an end.  Please share this article with your family and friends.  Most Americans have no idea that our nation is getting poorer and that our economy is literally falling apart.

When the system finally does collapse like a house of cards, the vast majority of Americans will never even see it coming.  Very hard times are coming and now is the time to get prepared.

  • Gary

    According to one recent report, the United States has dropped to 49th place in the world in overall life expectancy.49th place?

    And all you who say socialized medicine does not work and that other countries with a single payer model are worse off than the USA. Sorry about the facts getting in your way.

    Greedy CEO’s who shipped our good jobs overseas so they could buy house #5 in the Hamptons. This was done because there is way too much wealth in way too few hands and that allowed the rich to buy the government.

    Can any one really believe that with all the people out of work and living on food stamps and those working living paycheck to paycheck, that all the right wants to do is give the rich tax cuts? If tax cuts for the rich work so well then where are the jobs? They have had years of tax cuts but still no jobs. It is surreal that anyone would be talking about giving the rich tax cuts while so many are hurting. That shows how messed up this country is. Tax the rich and spread the wealth. Say no to USA=banana republic. Take our country back.

  • mondobeyondo

    The American economy is approximately 70% consumer driven.

    An economy based on consumption does not produce anything. It CONSUMES. It does not PRODUCE!!!

    Great nations do not become great through consumption. They produce goods and products which are consumed, by ourselves and by people in other nations.

    If you don’t think China is now a producing nation, you’ve been living on Mars. Look at the labels of the products you buy. Made in China. Fabrique en Chine. Hecho en China. They don’t just make Chia Pets anymore.

    And remember the days when you used to look at stuff that said “Made in Japan” and thought it was junk? Not anymore. Honda, Toshiba, Sony, Nissan…

    The United States of America USED to PRODUCE. We used to be the top dog. We invented technologies such as the telephone, telegraph, radio, cell phones, television, and even the Internet (if you believe Al Gore, hee!) And then we dropped the ball.

    Now we are content to sit on our laurels, celebrate our past accomplishments (we have six American flags on the moon! Woo-hoo!) – and meanwhile China and India are surpassing us.

    Give them another 20 or 30 years, and there’ll be Chinese and Indian flags on the moon too.

    To paraphrase another line from Don McLean’s magnum opus:
    “This’ll be the day when we die…”

    God help us.

  • http://www.liveoffshore.com/ Jason

    Jobs are also leaving the US because government regulation and taxation of business has become absurd. A company can do business outside of the United States far more cheaply and not be encumbered by silly rules, regulations, and a nightmare of a tax system. It makes complete sense for a business to expatriate from the US.

  • Bebe
  • StillWorking

    I remember Ross Perot talking about that “sucking sound” of jobs leaving our country as a result of the then-proposed NAFTA 20 years ago. Too bad more people didn’t pay attention then….

  • Channel

    While I agree with Gary that the USA is in bad shape I disagree with the cause. It’s not about greedy CEOs and the rich. The banks are in serious trouble Gary. You really believe they would commit their own suicide? To me it’s about fiscal irresponsibility on part of people — http://www.amnation.com/vfr/archives/011461.html

  • john

    We not only have a budget/trade deficit, we have a trust deficit. The economy will not get any better until the white collar criminals are prosecuted and sent to jail. Only then will trust begin to return.

  • http://pathtoasia.com Rhea

    The government is the real cause for inflation. They want us to spend our savings so they can have their losses back into their pockets. Besides, people are already tired of hoping for the better. The American government does not have the political will to be honest with the American people about our financial condition. The politicians will most likely take the easy way out by printing us into hyper-inflation rather than admit their folly. The rich will be richer and the poor will be poorer.

    We help Americans find jobs and prosperity in Asia. Visit http://www.pathtoasia.com/jobs/ for details.

  • Owen

    Real reason: Just setting the stage for the concluding conflict in the long war between God and those who choose to oppose Him. Hope you are not on the wrong side of this conflict. Buckle up, the rides get increasingly bumpy from this point forward.

  • http://keruxreplies.blogspot.com/ Kerux

    Hey, you American suckers: South Koreans love you. You buy their Hyundae – Kia cars and their Samsung and LG flatscreen TVs so they can have a high standard of living. Did you know you never see a Ford or a GM car in South Korea?

    Suckers.

  • TK

    I am not rich (far from it) and I do not think that taxing people with more money is the answer. The answer to the economic problem is the people of this country. Bigger government is the problem. To many taxes is the problem. I am willing to bet that the big regulations are the problem.

    I started a small business a few months ago. I am absolutly amazed at all the regulations, licences, and hoops I need to jump through. The economy is in trouble and I need to comply with b.s. rules. THE GOVERNMENT IS THE PROBLEM !!!!!! Taxing the rich will do no good.

    Gary open a book and learn something or better yet try opening a small business.

    People who earn alot of money deserve it. They work for it. Why should they they have to pay more taxes ? Why should anyone work any harder than they have to if they are going to be taxed more for it.

    I would rather have business employ people than let tax dollars and the government handle it.

    Wake up Gary. Do you work for the government ? I bet you do.

  • http://www.thequarterroll.com Mike

    There are many factors that create these issues, but I think one is just personal choices, particularly the untamed spending on wants (not needs) by individuals. Also, too few people take personal responsibility in educating themselves about their own health and practicing preventative medicine.

  • mondobeyondo

    Don’t forget, we Americans love Japanese Toyotas, and Kawasaki motorcycles too.

    Can you say “Banzai!”?

    How many Chevys and Harley Davidsons are on the streets of Tokyo?

  • A Dodgy Bloke

    This is Global problem what really amazes me is when, the US and EU slide under the waves who going to buy all this crap produced in Asia? It’s not bad enough Japan has a 200+% debt to GDP ratio, don’t believe me look it up. It’s mind-boggling how so few people out there understand how interconnected everything is, Asia makes crap sells it to markets to US and Europe who is Asia going to sell this stuff to? You don’t have the developed markets to sell it to your selves, Africa, good luck with that, South America maybe in 50 years and everything semi holds together, and a hell of a lot of luck.
    I read most of this stuff and I just shake my head, maybe it’s time for Human Beings to make room for something else.

  • http://www.planorperish.com Gutter Economist

    #1 “The Biggest Transfer of Wealth” is what Americans are getting for electing criminals and fools. The 2 potty political system, however, is controlled by criminals and fools so Americans have few options. Using the White House for a training school is going to bankrupt the US.

    #2 There are actually 2 “sucking sounds”. The second is the flow of American investment capital into emerging markets such as China. Americans don’t care if they turn the US into a banana republic (or their neighborhoods into ghettos) as long as they get a better return on investment.

    #3 OK

    #4 The same elected criminals and fools hard at work.

    #5 Government workers create NO wealth.

    #6 Wars are the most efficient way to destroy wealth.

    #7 The US health care system is based on disease maintenance rather than disease prevention to benefit doctors and drug companies.

    #8 The real “debt nightmare” is the fact that no one knows the real amount (14 trillion or 200 trillion?).

    #9 A collapse of the municipal bond market will probably be the tipping point or the first domino to fall as we enter the coming economic collapse.

    #10 The Total Credit Market Debt Owed chart indicates that both political parties (democrat and republican) are responsible for our current debt crisis.

    #XX Most Americans including many politicians still believe that the US is a country with unlimited wealth that just needs to be properly managed by the right democrat or republican in the White House.

  • mondobeyondo

    One of my former co-workers at my former job thought Japanese cars were the best. He grew up a GM man – always bought Chevys. Wouldn’t get near a Ford (Found On Road Dead) though.

    Now he thinks Acuras are the best. He says he even wants to upgrade to a Prius in the future, because there are no “green” American made cars.

    I wish I could give him a toy Yoda for Christmas. Complete with the light saber. Made in China, of course, not Japan…

  • SGary

    Excellent article. Up until a few years ago I would have argued with roons like Gary for the cause of the “conservative side”. There is no conservative side and all are working towards the same goal of melding us into the one-world system. Good and bad news – America can’t collapse until we are totally destroyed for our wickedness as foretold in Revelation 18 because the merchants will lament over our destruction and they wouldn’t do so if there was no wealth at the time we are destroyed.

  • Silas Campbell

    You have completely omitted an obvious reason why the share of the pie per person in the US has declined: the number of the people in the United States has doubled since 1950. In 1950 there were about 155 million people in the US, and now thre are about 310 million.
    What sense does it make to double the number of people when the size of the pie, as measured by jobs or resources available, is declining?

  • Gary

    China is growing like crazy, and will leave us in the dust, because they don’t suffer from the delusion that the American-style “democracy” (i.e., oligarchic control of the government) works.

    The Chinese government does not allow anyone to control it. Their loyalty is only to their goal of making China succeed as a country. Our government is just a puppet of the rich.

  • missy

    I wish everyone a peaceful Christmas. Christmas, and particularly the image of the Christ child is, to me, a symbol of rebirth and faith in a new and better world. For those of you of the Christian faith, remember the struggles He went through, and that, despite His poverty and death at the hands of authorities, He made the world a better place. May those who read this blog take heart in the enduring spirit of hope for a better tomorrow. Remember, no man is really defeated until he believes he is.

  • it is a joke

    The United States is in deep shit. Jobs have been sent out of the country and foreign worker brought in.

    I lost my home, my family is split and needed to move to DC for a job. DC is the only place jobs still exist. I want to go home, however no more jobs exist.

    The federal buildings are filled with foreign contractors. That is right, US Federal buildings with Chinese and Indian workers. It is disgusting, however many feds don’t give a shit.

    I don’t think the United States is going to be able to get out of this mess.

  • mondobeyondo

    1950 ~ 155 million population
    2010 ~ 310 million population

    And yet… by 1950, America had participated in 2 world wars (and won both, with the help of our allies), endured and for the most part recovered from a Great Depression, and was the undisputed economic leader of the world.

    You’d think that with nearly double the population we had in 1950, our economy would be twice as strong. But it isn’t so.

    True, China has about 1.2 billion people. And they also have a much lower standard of living than most Americans. So it isn’t just about population.

    America has lost her moral compass. Heck, forget losing our moral compass. We don’t even have any kind of compass anymore! Morals, dignity and ethics are out the window. What used to be taught by parents at home, is now taught through your TV set. Fine then, just let Justin Bieber raise your sons, and Lady Gaga raise your daughters. It’s all good.

    Whatever you sow, ye shall reap. And our harvest will be a bitter one.

  • http://http//www.mortgageresistanceofamerica.com FrankyFreelance

    It’s international economics 101 – accented with a dash of class-conflict driven corruption.

    Interestingly, I am currently reading Alan Greenspan’s biography “The Age of Turbulance”. I wanted to get past all of the hype (and negativity) about him and so picked up the book. he is quite an interesting thinker – grew up in a working class neighborhood during the Great Depression error. Worked his way up. He also says that the media and politics did a real job on twisting around his efforts.

    What interests me most about his story is his strong belief in the objectivity of economics. That is that it is more difficult to understand a problem if you let morality/values get in the way when you look at the facts. Morailty/values come afterwords – once you have looked at the situation for what it is.

    The biggest problem in America is that we have lost the sense of scientific objectivity which allowed us to build our once productive nation. The more subjective forces of media, politics, etc. have gotten in the way.

    Greenspan says that a certain level of corruption exists in ALL human societies. The key is to quell the level of corruption to a manageable level.

    I agree with many of the comments in the previous posts. The multi-national corporations are in bed with Washington and world governments. They are seeking (according to the basic laws of economics) the cheapest inputs in order to keep their costs down. This is a natural (and healthy) free-market impulse – unless you are, of course, on the losing end of this zero-sum game (which America now is).

    However, the U.S. government’s responses to the factors involved in this shift in global production have definitely not been in the best interest of the working class – or ANY class not married to the corporations.

    Sad to say, but what is happening right now is the product of inept regulation of the economy by the U.S. government (with the goal of protecting the country AS A WHOLE – instead of just those select citizens who can contribute to the profitable sell-out of the country for personal gain.

    I jumped the American ship (to Asia) five years ago because I could see all of this coming. I wish I were wrong.

    Things happen.

    http://www.mortgageresistanceofamerica.com

  • Jacob

    We are far more than 14 trillion in debt. Add that to the 14 trillion in debts from borrowing from Social Security that never got paid back, and the 37 trillion borrowed from Medicare that never got paid back. That comes to $65 trillion we owe.
    The USA is going to collapse all together very soon.
    Don’t forget to thank those republicans for lowering our taxes and increasing our debts that they only wanted future generations to have to pay back. Well those future generations won’t know what the USA was unless they read history books.

  • http://www.YeshuaAgapao.com YeshuaAgapao

    Corruption and incompetence will destroy any government or country. It doesn’t matter what kind of government it is. Any good government is better than a corrupt government, no matter what the form. An intelligent, fair despot concerned for his people will produce a better country than any corrupt democracy will. And vice versa. Large-legislature governments have more averaging, so one bad egg doesn’t destroy everything.

    But if a democracy is wholly corrupt, it is no better than a corrupt dictator, though the large bureaucratic nature of democracies makes it more difficult for corruption to control the population, so soon after it becomes wholly corrupt, it is only a matter of years before a wholly corrupt democracy deteriorates into a oligarchical rule (China today) or a dictatorship (Hitler/Stalin).

  • lew

    Frankly frankly. …. Greenspan is one of the reasons we’re in this mess. Of course there’s level of corruption in a nation, but you HAVE to have morals in order to have an economy that supports everyone. If not, then you have a 3rd world nation! lol

  • Dr. Funk

    I’ll tell you what the problem is, its the ridiculous standard of living that we think needs to continue on in perpetuity.

    There was a time when one didn’t need air conditioning, heating, a car or gasoline.

    We’re all morons.

  • Tom from Bricktown

    400 billion in the mid east try 10 trillion $ wasted, for what, 9/11, get over it America. half of that money should have been funneled into our banking system. Just wait America, soon our banks are going to do business overseas.get out your Chinese dictionary, you’ll need it.