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Why Is The Economy So Bad?

Millions of Americans have lost their homes, tens of millions of Americans can’t find a decent job and 44 million Americans are on food stamps.  This is causing an increasing number of Americans to ask this question: “Why is the economy so bad?”  There are some Americans that are old enough to remember the Great Depression, but the vast majority of us have never known hard times.  All our lives we were told that America was the greatest economy on the planet and that we would always experience endless prosperity in this nation.  That was easy to believe because even though we had a recession once in a while, things always bounced back and got even better than ever.  But now something seems different.  The current economic downturn began back in 2007 and yet here we are in 2011 and there seems to be no end in sight for this economic crisis.  So what in the world is going on?  Can anyone explain why the economy is so bad?

The following are some of the kinds of questions that the American people are asking about the economy these days….

Why does it seem like it is harder to get a job today than it used to be?

Well, it is because there are far fewer jobs available and far fewer people are getting hired.  According to the U.S. Bureau of Labor Statistics, an average of about 5 million Americans were being hired every single month during 2006.  Today, an average of about 3.5 million Americans are being hired every single month.

Is there much hope that the unemployment rate will start to decline significantly?

Unfortunately there does not appear to be much reason for optimism.  Initial weekly unemployment claims have been above 400,000 for 7 weeks in a row.  The “jobs recovery” we have been promised simply is not materializing. Only 66.8% of American men had a job last year.  That was the lowest level that has ever been recorded.  At the rate we are going things are going to be about the same this year.

So where did all of the jobs go?

They are being sent overseas at a blistering pace.  The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001, and the U.S. trade deficit with China is now 27 times larger than it was back in 1990.  Amazingly, the United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

Why does it seem like nearly all of the jobs that are available right now are crappy, low paying jobs?

Well, because most of the jobs that are available are crappy, low paying jobs.  The following is a brief excerpt from a recent article posted on Tomdispatch.com…..

According to a recent analysis by the National Employment Law Project (NELP), the biggest growth in private-sector job creation in the past year occurred in positions in the low-wage retail, administrative, and food service sectors of the economy. While 23% of the jobs lost in the Great Recession that followed the economic meltdown of 2008 were “low-wage” (those paying $9-$13 an hour), 49% of new jobs added in the sluggish “recovery” are in those same low-wage industries. On the other end of the spectrum, 40% of the jobs lost paid high wages ($19-$31 an hour), while a mere 14% of new jobs pay similarly high wages.

Why are so many Americans afraid to start businesses?

Maybe it is because the overregulation of business in this country has now reached extreme levels.  For example, the U.S. Department of Agriculture recently slapped a fine of $90,000 on one family from Missouri because they sold more than $500 worth of rabbits in a single year.  The $4,600 in rabbits that they sold ended up netting the family only $200 in profits.

If people are not able to make a decent living, then how are they providing for their families?

Sadly, an increasing number of Americans are simply not able to put food on the table anymore.  Today, one out of every eight Americans is on food stamps and one out of every four American children is on food stamps.

For the first time ever, more than a million American homes were repossessed during 2010.  So is there any sign that this will turn around in the years ahead?

Sadly, things could get even worse.  Today, there are 6.4 million homeowners that are delinquent on their mortgages or in foreclosure.  Of those, 675,000 have not made a payment in at least two years.

Will the U.S. housing market ever recover?

Hopefully we will see some sort of a recovery at some point, but right now things don’t look good.  In April, signed contracts to buy homes fell to a 7-month low.  There are 120 million more people in the U.S. than there were in 1963, but home purchases are currently at about half the level they were back then. The truth is that there are dozens of indications that the U.S. real estate crisis may get even worse before things start getting better.

Why does it seem like health care costs so much these days?

Sadly, it is because the entire U.S. health care industry has become a giant money making scam. According to the Bureau of Economic Analysis, health care costs accounted for just 9.5% of all personal consumption back in 1980.  Today they account for approximately 16.3%. One study found that approximately 41 percent of working age Americans either have medical bill problems or are currently paying off medical debt.  Health care costs continue to increase far faster than the general rate of inflation and so this crisis is going to continue to get worse.

Is “retirement” rapidly becoming a luxury that only the wealthy can enjoy?

According to stunning new research, 54 percent of all American workers plan to keep working after they retire. A different study found that American workers are $6.6 trillion short of what they need to retire comfortably.

Why does it seem like U.S. companies are hiring so many temporary workers?

It is because American businesses are hiring them by the bushel.  A whopping 26 percent of all the workers hired in 2010 were temporary workers.  That is way, way above historical norms.  Temporary workers are far cheaper and much easier to get rid of.

Is the gap between the rich and the poor growing in America?

Yes, it most certainly is.  Between 1979 and and 2007, the average household income of the top 1% of Americans soared from $346,600 to $1.3 million.  During that same time period the average household income for middle class Americans increased only slightly.  At this point, the poorest 50% of all Americans collectively own just 2.5% of all the wealth in the United States.

Does how much money you make tend to alter your view of how well the economy is doing?

Well, according to recent Gallup polling, 46% of those Americans that make less than $30,000 a year believe that we are in a depression right now, while only 23% of those making $75,000 or more believe that we are currently in a depression.

Why do members of Congress seem to care so little about average American workers?

Perhaps it is because 58 percent of the members of Congress are millionaires while only about 1 percent of the general population is made up of millionaires.

So if the economy is in such bad shape why do we still have such a high standard of living?

Sadly, the truth is that we have only been able to maintain our incredibly high standard of living by going into massive amounts of debt. The U.S. national debt is now more than 14 times larger than it was when Ronald Reagan took office.  America has become absolutely addicted to government money.  Any politician that threatens to reduce government payouts usually gets voted out of office fairly quickly.  59 percent of all Americans now receive money from the federal government in one form or another. U.S. households are now actually receiving more income from the U.S. government than they are paying to the government in taxes. In 1980, government transfer payments accounted for just 11.7% of all income.  Today, government transfer payments account for 18.4% of all income.  As long as the American people continue to be addicted to receiving government payouts the federal government will continue to be drowning in debt.

But it is not just the federal government with a debt problem.  State and local government debt has reached an all-time high of 22 percent of U.S. GDP.  Many state and local governments are even closer to going broke than the federal government is.

U.S. households have been on a debt binge for decades as well.  Average household debt in the United States has now reached a level of 136% of average household income.

The truth is that we are a nation that is addicted to debt.  We are living in the greatest debt bubble in the history of the world and it was really fun while it lasted.

Unfortunately, the bills are starting to come due and nobody is quite sure how we can possibly pay for all of our mistakes.

We are drowning in debt at the same time that our economic infrastructure is being ripped to shreds.  Tens of thousands of factories have closed over the last decade.  There is a never ending parade of companies leaving the United States.  U.S. workers are having a really tough time competing against slave labor on the other side of the globe.  Thanks to “globalization“, multinational corporations can hire workers for slave labor wages on the other side of the planet and nobody can stop them.

But if U.S. workers lose their jobs, they go from paying taxes into the system to being a drain on the system.  This makes our government debt situation even worse.

Let there be no mistake – America is in economic decline.

So why is the economy so bad?

The truth is that decades of debt and really, really bad decisions are starting to catch up with us.

The economy is a mess right now and things are going to get a whole lot worse.

You better get ready.

  • Gary2

    this is an easy one: Its bad because we have the worst income and wealth inequality since 1928 and we all know what happened in 1929.

    We HAVE to tax the rich hard at least 50% and start to spread the wealth. If this is too socialistic then too bad. The same thinking (capitalism) that got us into the economic mess will not get us out. We need fresh socialist ideas like a lot less income and wealth inequality.

    It is insane that republicans are cutting programs for the poor, am I mean literally taking food from the mouth of kids (WIC, School lunch programs etc) in order to give the rich more tax cuts. They are not even trying to hide their disdain for anything not rich/corporation. Simply read Paul Ryan’s road-map to poverty plan.

    This is a good thing as even the dumbest among us can see what they really stand for and can vote down their horrible agenda. We already have a good candidate to cream Paul Ryan-Mark Zerbon. I really believe that republicans are going to go down hard, hopefully never to be resurrected. Look at NY-26.

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

      Gary2,

      Instead of passing out fish (other peoples income), consider passing out fishing poles. Do you think that all Americans want to be dependent on their government?

      When employees work for corporations, a good fishing pole would be enough stock shares to provide additional income from stock dividends.

      • Gary

        People need money to buy the fish pole, and need to be trained to fish.

        I am guessing you agree with me about taxing the rich hard so people can buy a fish pole and fishing lessons. With people having money in their pockets the demand for fishing poles will increase and so will the jobs to make/sell/teach how to use them. This will also increase the need for fish farms and water management which will also produce jobs. These jobs will need to be union so they are family supporting.

        You are right-everyone wins!

    • Larry Myles

      Gary, you are studying the wrong depression. If you look at the 1920-1921 depression and then study how Warren G. Harding turned the country around so it could enjoy the greatest era of prosperity ever, you may enjoy a new point of view. Taxing the rich into leaving America is not even a good temporary fix.

      • Gary2

        where are they going to go? Somalia-then they will not have to pay those pesky taxes. No government interference etc. The other first world countries tax them even higher.

        The 1920-1921 recovery sure did not last too long so the solution clearly did not work. We need long term fixes and not short term solutions.

        Given the history of capitalism boom/bust and the devastating impact it has on so many and only benefiting a few its time to rethink if this is the best way to organize our economy. We can have a more socialist/capitalist mix. (in most measures Europe beats us hands down-happiness, life expectancy, infant morality, % of people in poverty etc etc) It does not need to be one or the other but the best of both. Capitalism is great at generating profits but horrible at distributing them. This is where socialism can step in with the distribution part.

        Time to tax the rich and spread the wealth!

        • from europe

          try Monaco idiot. yes. how much is tax there? 0. Zero. zipp. nada.

          and i hear it’s really nice there. aha.

          so drop you bs whinning, noone will go to somalia. except you maybe :)

          • Do your research

            From Europe: Ad hominem is not debate. (And it’s ugly. And dumb.)

        • http://yahoo.com Marsha Mayer

          it’s not capitalism anymore,it’s not a democracy,it’s a tolitarian-socialist-dictatorship-oligarchy,stupid. It’s not a “free capitalism”society! You are now a peasant,with no power,and the “govt.”is a huge dictatorship!! You fool,your “votes”are worthless.It’s like RUSSIA.

        • Ron Paul

          Dear Gary, first i would like to say that I empathize with your frustration, and wish you success in all your endeavors. Secondly I’m happy that you are so passionate about the present state of the economy and how it effects you fellow Americans. Your altruism is truly enviable, and I hope you honestly seek the truth regarding the origins of our dilemma and its remedy. One great place to start is a book I wrote called End The Fed, another great place to search is at mises.org. If you haven’t the time check out a video or two on youtube, just type “Ron Paul” in in the search area. Again I want to thank you for you concerns.
          remember sound money is the foundation of a sound economy.

          Dr. Ron Paul 2012

      • http://yahoo.com Marsha Mayer

        There’s no “fix”,you can do,except to destroy the whole “govt.”,from the bottom up,and destroy all the ones upstairs,who own and run it.I’m not advocating you do that.But “fixes”will not work.It’s too far gone,for any fixes at all.

      • http://endoftheamericandream.com Bliver

        The answer to the rich leaving the country is simple if they decide to go then they must leave the bulk of their wealth here in this country in the form of a SUBSTANCIEL TAX that they must pay in advance after all this country made it possible for them to acquire this wealth in the first place and they should not be allowed to keep it if they don’t want to be obligated to give back a portion to help this country prosper again.

        • Mari

          Presumably, they have already paid taxes on that ‘wealth’.

      • Brandon

        The 1920-21 downturn WAS NOT A DEPRESSION! Where do you people GET this crap?? Lemme guess… you’re a Schiffbot or think Tom Woods and the von Mises idiots are SOOOO SMART, dontcha?? It was a mere RECESSION where unemployment reached barely 10%, at best. Probably not even THAT…

        The only people who seem to think it was “a depression” are those who believe in Austrian economics and/or are libertarian dumbsh*ts who LOVE to rewrite history to promote long-debunked laissez-faire. Warren Harding DID cut some spending, but it’s not like THE GOV’T WAS THAT BIG TO BEGIN WITH then! The economy was structured far differently, and the amount the feds spent as a percentage of GDP was so small compared to today that to assume that any cuts in spending would’ve had a deleterious effect is absurd. Of course, the situation is FAR DIFF. today, and major cuts in federal spending (about $3.4 Trillion a year) would STIFLE DEMAND IN A HUGE WAY.

        But seriously, HOW do the Harding cuts “prove” that NO STIMULUS IS EVER NEEDED, esp. in a major recession or depression when DEMAND IS LOW?? If demand is low, most entrepreneurs aren’t gonna have much incentive to START NEW BUSINESSES, right? After all, their profit expectations aren’t gonna be that optimistic, nor will CURRENT companies (save the biggest and most-profitable ones) have much incentive to EXPAND. Besides, only ONE recession with the president CUTTING SPENDING is enough to “prove” that stimulus is NEVER NEEDED and that CUTTING SPENDING can somehow “create jobs”? Get real…

        Oh, I’m sorry… Did Ron Paul get an Econ. degree? Where’s HIS Nobel Prize in econ.?? Has he been “recognized” as a scholar in the field? No? THEN STFU AND STOP TREATING HIM LIKE A SUPER-SMART MAN WHO KNOWS ALL ABOUT THE ECONOMY! He’s just a laissez-faire-loving, reactionary, libertarian dipsh8t. And a history-revising goldbug…

        Stop kissing that guy’s ass, you fools. “end the Fed” Lol
        Look, as much as I hate what the Fed is doing on a lot of things, I can assure you that WILLY-NILLY ENDING IT would be DETRIMENTAL to economic growth! The fact of the matter is, the Federal Reserve HAS been a tremendous factor in moderating our business cycle, and EVERY credible economist agrees with this (long-term)! Sure, they’ve had some failures, but the Federal Reserve System DOES have a place in our econ. You have to look at THE BIG PICTURE! Plus, deregulation and irrational exuberance had just as much (if not more) a hand in causing the financial crisis as the Fed!

        Ending it would MOST SURELY just help to BRING BACK the disastrous business cycle of the 1800s and early 1900s, which resulted in SEVERAL terrible bank panics AND the Long Depression. We were CONSTANTLY having financial crises, in fact! Instead of one every 70 or 80 years, it was more like ONE EVERY 20 OR 30! Is that the kind of economy YOU WANT, libertarians?? THINK… Unfettered capitalism is not the paradise you imagine.

    • Do your research

      Gary2: Somewhere you got the idea that the world is black and white. Evil Republicans stealing food from the mouths of children! (You said “literally” which means “in actuality,” but I haven’t seen any vids of Paul Ryan grabbing food out of kids’ mouths.)

      We have to quit spending. That’s all. It’s not one big, bad bunch of people picking on everybody else. Wealth provides jobs. The poor do not. The Dems are notorious for giving money to Wall St. bankers. Don’t think for a minute that you can blame the economy on one party of people.

      Sorry, but congress has to stop. The party is over. No more. We have enough money coming in –it’s the outgo that’s killing us. (And remember, Obama, has added more to the debt than every other president in history COMBINED.)

      We have to let our job creators do what they do best. We cannot go on closing down oil drilling, coal mining, agriculture, fishing, transportation, advertising, and food industries because of regulation. That, and cutting spending, is all we — conservatives AND liberals – need to do.

      • Brandon

        Please… STOP PARROTING THIS “JOB CREATORS” NONSENSE! Did they “create a lot of jobs” under Bush? NO! Bush had ONLY 3 MILLION NET JOBS CREATED! Some “job creators” they were, huh?? Guess those tax cuts didn’t do a DAMN LICK OF GOOD. Besides, we ALREADY HAD LOW RATES for the rich (39.5%, far from 70 or 90%), so I don’t know WHY anyone thought LOWERING THE TOP INCOME TAX RATE A MERE 4.5% would ‘boost growth.’

        JOB CREATION IS INCUMBENT UPON DEMAND! That’s it… If demand is high, and profits are good, COMPANIES WILL HIRE! We have to first STIMULATE DEMAND! Since when do businessmen JUST HIRE A LOT OF PEOPLE B/C THEY HAVE TONS OF LEFTOVER CASH?? If a company DOESN’T NEED THE EXTRA LABOR, why would it hire? DO THESE QUESTIONS NOT GO THROUGH YOUR HEADS when you spout this crap??

        If you GIVE EVERYTHING TO BIG BUSINESS, but they have NO INCREASED DEMAND, why would they hire TONS MORE PEOPLE?? They have NO REASON TO! THEY can do what they need to WITH CURRENT LABOR! Besides, 70% of our GDP IS CONSUMER SPENDING! Knowing that, shouldn’t we focus on INCREASING CONSUMER DEMAND, rather than just giving more goodies to Corporate America??

        Honestly… you people MAKE NO ************** SENSE! Regular people SPEND 70% OF GDP, yet you think we should focus on ‘strengthening’ the 10-15% that’s investment. REALLY?? …Gimme a break. If we STIMULATE DEMAND, the investment WILL FOLLOW, AND JOBS WILL FLOW. Hopefully good jobs, but unless PEOPLE CAN GET LOW-COST TRAINING FOR THOSE JOBS, they’re ***************.

        We have to FIX THE THE STRUCTURAL IMBALANCES WITHIN OUR CURRENT ECONOMIC SYSTEM before we can even BEGIN to think about “getting gov’t out of the way”! Romney-Ryan are nothing but pro-1% TOOLS who KNOW NOTHING about how real economies prosper. I mean, these people are WHINING ABOUT GOV’T SPENDING BARELY 1/4TH OF GDP! When that means that over 75% of GDP IS STILL PRIVATELY-OWNED…

      • Brandon

        “Job creators” is a NEW TERM that only came to be en vogue RIGHT AFTER THE FINANCIAL CRISIS! I RARELY heard it used, even among those on the Right, before 2008 or 2009! Now, it’s EVERYWHERE on the Right. It’s just BS used to excuse DEREGULATION, LOWERING TAXES EVEN FURTHER (really? when the top rate is a mere 35%??), and so much MORE.

        Our economy can’t afford this pro-rich nonsense much longer… It’s KILLING US! Invest in OUR PEOPLE AND OUR INFRASTRUCTURE, not the rich or “job creators.” THEY’LL CREATE MORE JOBS WHEN THE MIDDLE CLASS AND POOR SPEND AGAIN! When profits are high, THEN they’ll have a true incentive. They’re not just gonna “create lots of jobs” IN A F*CKING VACUUM WITH NO INCREASES IN DEMAND, for god sake! WHO would do that?? Seems pretty risky and a waste of money…

        The GOP’s view of business seems to be this: “Well, I’ve got lots of money, and thanks to this new tax cut, I’m 100 grand richer. I think I’ll create a bunch more jobs… JUST CUZ I CAN CUZ I DON’T KNOW HOW ELSE TO SPEND THE MONEY!” What a simplistic, BS view

        Besides, if they’re such “job creators”, WHY ARE THEY SITTING ON $3 TRILLION, instead of SPENDING IT ON JOBS?? You people are so full of it. STOP MAKING EXCUSES FOR THE 1%!! Are you a 1%er?? Do you own a business? If neither of those is true, WHY ARE YOU MAKING EXCUSES for them?? You’re just parroting party talking points b/c you can’t think for yourself or DO SOME ACTUAL RESEARCH.

        The key is DEMAND, not simply “having a lot of money.”

    • Janice

      Capitalism did NOT get us into this mess, corporatism did – as in literally, corporate fascism. We have a fascist in the White House and THAT is why we have the corruption, payoffs, swindles and pyramid schemes we are seeing now. For additional info on what is to come SEE: MUSSOLINI

    • mike wietecha

      Why do you think you deserve other people’s money. Did you work for it? Stop looking for handouts and start doing something for yourself.

  • Gary2

    Michael this is my situation and its 100% true: Both me and my wife are working full time. Together we are making what I used to make in 2006 working at just my job and my wife stayed hoe with our 4 kids. I think there are many people working harder for less.

    I have not made this little money since graduating from college in the late 80′S. I am 44 and am supposed to be at or nearing my peak earning potential so I can start to save for retirement. I have nothing saved zero Nada zip. I can barley pay my bills and am frequently late on everything but the mortgage.

    Being poor really sucks. Going to the food pantry really sucks but I am grateful it is there.

    Until there is more demand all the tax cuts for the rich and corporations will do nothing but increase the deficit. Trust me, people like me need the money much more than the already too rich need a 5th home in the Hampton’s or another million dollar tax cut on their capital gains. I have absolutely no problem with Obama taxing them and redistributing it to those who need it. Call it their dues for living in this country. (no its not theft-they stole it from us by keeping our productivity increases)

    People like me need money in their pockets to spend and only being able to get crap low pay jobs is not going to provide said cash.

    • Admin

      Gary:

      I feel so bad for what you are going through. I have friends that are going through similar things. I hope that in the days ahead people will remember to have compassion, because with a couple bad breaks it could be any of us that are going through financial hell.

      Michael

    • from europe – Dirty COOKIES 4 Gary

      oh such a sob story. see me cry… NOT!

      i say we all donate some dirt cookies to poor Gary

      http://www.msnbc.msn.com/id/22902512/ns/world_news-americas/t/haitis-poor-resort-eating-mud-prices-rise/

      • Brandon

        Uh… he doesn’t LIVE in Haiti, you ***********! What does that have to do with anything?? He’s poor COMPARED TO THE COST OF LIVING IN AMERICA! IT’S ALL RELATIVE! Get a clue… I don’t get how heartless, stupid bastards like you even exist!

  • Gary2

    Michael-I really like the Q & A format of this post. I think this is one of your best ever posts and encourage you to link it to your other economic collapse site.

    Good job! Even though we do not always agree I really appreciate you:)

    If all I wanted was people that told me what I wanted to hear I would talk to a mirror.

    • Admin

      Gary:

      It feels good to be appreciated.

      I appreciate you too. :)

      *Group Hug*

      Michael

  • Nexus

    Should add in the backlog of work required on US infrastructure (roads, bridges, rails, power grid, etc) – $2Trillion dollars is an estimated cost to bring infrastructure up to an acceptable standard.

  • Richard

    “decades of debt and really, really bad decisions are starting to catch up with us.”

    Wow! I thought they were just really bad decisions. When I saw that they were REALLY REALLY bad decisions, I realized that I had not even BEGUN to appreciate the seriousness of the problem. REALLY REALLY bad, huh? Whew! Thanks for letting me know.

    (Next time, just give me the facts. I’ll decide whether the decisions are REALLY REALLY bad, or REALLY REALLY REALLY bad, or excruciatingly, horrendously, catastrophically bad… or just, maybe, “really bad”.)

    Thanks for helping my emotions along, though.

  • Jonathan

    I thought I would add another reason to your list – the Federal Reserve Bank (aka “the Fed”). It astounds me that most Americans still believe that the Fed is a government owned and managed bank. A quick internet search will enlighten you as to what this bank has done to our country and economy since its inception in 1913. Imagine having complete control over the monetary system of the US without any oversight from our elected officials. The Fed’s mandate is “to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.” Given the current economic climate ask yourself how well the board of governors of the Federal Reserve system have managed that? Take it a step further and ask yourself why We The People continue to support such a system? Consider the following quotations:

    “Give me control of a nation’s money and I care not who makes it’s laws” — Mayer Amschel Bauer Rothschild

    “When you or I write a check there must be sufficient funds in out account to cover the check, but when the Federal Reserve writes a check there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it is creating money.” — Putting it simply, Boston Federal Reserve Bank

    “The regional Federal Reserve banks are not government agencies. …but are independent,
    privately owned and locally controlled corporations.” — Lewis vs. United States, 680 F. 2d 1239
    9th Circuit 1982

    “A great industrial nation is controlled by it’s system of credit. Our system of credit is concentrated in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world–no longer a government of free opinion, no longer a government by conviction and vote of the majority, but a government by the opinion and duress of small groups of dominant men.” — President Woodrow Wilson (It’s worth noting that the Federal Reserve Act was passed under his administration)

    “I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs.” — Thomas Jefferson, U.S. President.

    “Every Congressman, every Senator knows precisely what causes inflation…but can’t, [won't] support the drastic reforms to stop it [repeal of the Federal Reserve Act] because it could cost him his job.” — Robert A. Heinlein, Expanded Universe

    The Fed has few public critics because of its influence. In fact, the last President to take on and actually put an end to the then Fed was Andrew Jackson. It nearly cost him his life as he survived several assassination attempts but he was able to prevent the Charter of the Second Bank of the United States from being renewed.

    Leadership like that has been absent from the White House and Congress for too many years. If We want to end the current cycle of economic decline, We must stand up to the Fed and bring back the idea of “Made in America”. There is no reason why we cannot have a manufacturing industry in our country especially since Germany continues maintain its manufacturing sector amidst this crisis. It just takes a different mindset. That should extend to the idea of government entitlements. America worked its way forward without support from its fledgling government after the Revolutionary War. There is no reason why We cannot do that again. It won’t be easy but it really is that simple.

  • nick

    Well Vietnam really messed up Americas finances big time. Going off the convertibility of gold allowed the central bank to print dollars. Inflation went up. Oil priced in dollars allowed America to export that inflation because you needed dollars to buy oil regardless of the strength of that nations currency. Then to muster any semblance of gdp easy money through low interest rates fueled the junk bonds of the 80s, internet stocks late 90s, housing bubble
    2000s. America went from savers to speculators in a generation.

  • Owen

    It’s a worldwide planned economy and the planners are well pleased with the results. Those planners will achieve their goals but they will not have long to enjoy the fruits of their plundering.

  • William

    This did NOT have to happen. All the economic misery that shrouds the USA was put in place by STUPID and COWARDLY politicians YOU elect to the US Congress, from the loss of manufacturing jobs to the stunning debt and deficit. Add in the Wall St criminal trash with the CMO/CDO/Credit default swap/unregulated derivatives scams, and BINGO, YOU ARE A WINNER IN America!!

  • A Dodgy Bloke

    This is very timely Zero Hedges has a very good article on the Economic Death Spiral. It goes into two strategies the Asian Mercantile Strategy and the US Dollar Reserve Currency Strategy. Each feed off the other, but as soon a debt reaches a saturation level things start to unwind.
    Every thing was propelled by debt Japan and then Chine bought our debt keeping Interest rates low making credit easy and over heating the housing market, prices went up people got seconds, HELOCS to buy crap. To expand profit margins factories where shut down here and moved else were (usually Asia. The Article goes into much deeper detail going into the history of both strategies.

    http://www.zerohedge.com/article/guest-post-economic-death-spiral-has-been-triggered

  • Joe Johnson

    Dear author,

    In regards to your last dire statement warning us to get ready. So just how do under and unemployed people prepare for things getting worse. Shall we purchase a family pack of cyanide capsules. Shall we start collecting cardboard boxes to create makeshift shelter. Perhaps, now that health care is only affordable for those with decent medical insurance or the very wealthy, we’ll just all die off over time. Maybe we can take the place of the rural Chinese and work in China’s rice fields.

  • http://moneycrisisgameplan.com Money Crisis Game Plan

    Small businesses (defined as having fewer than 500 employees) represent a major part of the economy and account for 50% of employment in the United States, and according to the U.S. Small Business Administration, create 60 to 80% of new jobs.

    But there are so many regulations and taxes now, that it’s hard for small businesses to be profitable and hire more people.

    Start a home business and learn how to save money on taxes to increase your cashflow.

    Mike Dillard Elevation Group

  • http://freefood2gocoop.com Free Food 2Go

    It’s crazy that our government leaders don’t really seem focused on creating more jobs. They’re debating all sorts of junk and our President is forgiving Billion dollar debts to other countries, but what are they doing to move America forward in job creation?

    Like you said, “The economy is a mess right now and things are going to get a whole lot worse. You better get ready.”

    Prepare now for higher prices and a financial crisis, with long term food storage. Free Food 2Go

  • http://www.povertylinejournal.blogspot.com/ the optimist

    $9 to $13 an hour as a “low wage job”?? I’d kill for that (well, almost). Right now, I have a piecework job and I am averaging, optimistically, $4 an hour with it. Realistically, less. Irony of all ironies — it’s in the foreclosure industry, which is booming now. I am losing my house and am suicidally sad.

    • http://None Sadly Sad

      This is a very sad story. We really need leaders who will be there for our people. This is the time we need to be on our knees. We also need to be there to help others and not be too proud to ask for help from our neighbors.

  • Matt

    Based on historical research, it takes 7 to 8 years to come out of a recession caused by excessive debt. We’re making the problem worse by borrowing even more money.

    Imagine that you make a million bucks a year, and you live like you make a millions bucks a year. Now you lose all your income. What should you do?

    Should you cut expenses?

    Should you break out the credit cards?

    You can maintain your standard of living by using credit cards. However, if you don’t get your income back, then you going to be in big trouble very soon.

    America has broken out the credit cards with no real prospect of getting its income back. Expect things to get much worse before they get better.

    • Brandon

      You’re conflating GOVERNMENT SPENDING with individual household spending. It’s about SCALE, doofus! Government spends $3.4 Trillion a year! You probably barely have 30 or 40 grand, right?? Think about the effect that a loss of 30 grand vs. a loss of OVER A TRILLION (if the gov’t made drastic cuts) would DO TO DEMAND! Not to mention the massive job losses that could accompany it…

      Or are you one of those idiots who think THE GOV’T SECTOR IS SEPARATE FROM THE PRIVATE SECTOR but “leeches” off it?? I got news for ya: PUBLIC SECTOR IS A VITAL PART OF THE ECONOMY NONETHELESS! Why do you think GDP INCLUDES GOV’T SPENDING in the equation??

      I mean, when you say this crap about, “Washington should tighten its belt because I had to”, do you think you’re being “smart”? Do you think you’re SAYING SOMETHING RADICALLY NEW THAT NO ONE’S HEARD BEFORE?? No! Everyone’s heard this crap before, and it doesn’t get any more “enlightening” no matter HOW MANY TIMES IT’S UTTERED.

    • Brandon

      How many businessmen do you know of that say, “Well, b/c gov’t spends a lot of money, my company can’t get off the ground! If only gov’t massively cut spending…”???

      THERE AREN’T ANY LIKE THAT! That’s not the way economics works. Crowd-out IS BULL! Government spending is NOT separate from other spending but COMPLEMENTS it. They ADD MORE TO DEMAND! I mean, where do you think gov’t BUYS THE STUFF IT SPENDS MONEY ON? For the most part, THE PRIVATE SECTOR! It spends money buying PRIVATELY-MADE GOODS AND SERVICES, which then go to increase company revenues (and thus, profits). Not only that, but GOVERNMENT WORKERS WHO MAKE THEIR SALARIES spend it on PRIVATE-SECTOR GOODS!

      Or do you think there’s a “separate gov’t sector full of PUBLIC construction companies, PUBLIC computer firms, PUBLIC defense contractors, etc.”??

  • http://www.pathtoasia.com rhea

    Hope you’re all strapped in with your rain suits on. The S#][T is officially hitting the fan. They’re just dripping it slowly at first! The Greed of Corporate America is what has brought down America. At this point, whether planned or accidental, I don’t see how this country (or the world, for that matter) can avoid a meltdown so catastrophic that it hurtles us back into the dark ages.

    We help you find jobs in Asia – http://www.pathtoasia.com/ and in the USA – http://www.jobwaltz.com

  • Thinking

    Of the 120 million more people in America since 1963 how many are illegal aliens and how many jobs have they taken and what is their cost in services to the American tax payer. Why are our borders still open? Why do we have a permanent “ghetto base” that lives off entitlements generation after generation, whose only contribution to society is more illegitimate children, crime and entitlement growth ?

    The problem is not that the “rich” don’t pay enough taxes, they already pay more than their fair share , it’s that 50% of of all workers pay no taxes and 100% of the entitlement group that pay nothing that are the problem. Since they pay nothing what do they care about job killing regulations, 62% tax rates, unemployment figures, the dollar, balance of payments, etc., all they do is vote for whomever promises more entitlements.

    There is a reason that at the core of every large American city there exists the ghetto, people that are kept poor and uneducated by the democrats, people that constitute their main voting bloc, the democrats give entitlements for votes. It’s destroyed those people, broke the tax payer and left America in ruins.

    • Gary

      Everyone pretty much pays the same in taxes % wise. The poor pay many taxes (SSI ,SALES etc)and at a higher % of their income. And yes the rich do not even come close to paying their fair share—15% capital gains for hedge fund managers??? I could go on. How can you not know this? Simply think for one second, please.

      Turn off the right wing hate media and actually think for a minute.

      • Tim

        Gary you brain dead PoS. An upper class income is out there for someone willing to work for it and earn it. Who do you think you are? You’re too much of a coward to steak from others, so you have the government do it. Just because they make more money than you do. You have that same ghetto entitlement mentality. You think people owe you something because they earn more than you. Get the fuck off your ass and make something of yourself, instead of trying to shoot down your betters. Most people who are wealthy became so because of hard work and wits. You sir, are a bottom feeder. And until you grow the balls to steal the money yourself, rather than have your nanny state do it yourself, I say you’re a coward as well. You’ll never be able to tax the billionaires half of what they make, they created the system, and they run it, dipshit.

        • denise

          Tim, you sound pretty heartless,arrogant, and misinformed. Perhaps you are a CEO? I know personally three CEO’S, who are nice people. None of the three are very smart overall, none of them read books, or can converse on much other than their careers. Two of them grew up wealthy. Much of their wealth was sheer luck. Have a heart. there are many bright, hardworking people who have been slammed by this economy. Please stop thinking that income translates into character and intelligence. It quite simply does not.

  • http://wearamerican.blogspot.com/ Thomas Schiller

    As long as people don’t care what they buy and wear nothing will change!
    “AMERICAN EAGLE” – Not a single piece is Made in the US!
    “LEVI’s- The ORIGINAL AMERICAN Jeans”- Not a single Piece is Made in the US!
    “WRANGLER- NATIONAL PATRIOT”- Not a single piece is Made in the US!
    In a Cowboy Store I discovered a Patriotic STars And Stripes Shirt, MADE IN INDIA!
    But people still don’t care! We made a shirt “I’m proud to WEAR American”, we have it at our store! But the customers just smile about it! They don`t realize, that they destroy the country with their ignorance!
    But on 4th of July a lot of them will wear the Flag Shirt Made in India!

  • mondobeyondo

    I’m fortunate enough to be able to have a Memorial Day weekend barbecue this year, with chicken, hot dogs and hamburgers. It could be the last one for a while, the way things are going.

    Memorial Day 2012? Maybe a Top Ramen soup boil and potato bake!!

    Enjoy life in mid-2011 while you can….

  • Omar

    Yeah everything is made outside this country because americans want to make sooo much money out of nothing… first of all think as the corporation. why would you pay a lazy american to do the job for 15 dollars the hour if you can produce the double by hiring a person that’s going to ask for 7 or 8 dollars the hour. think about that.

    • Edwin

      Finally someone agrees with me yes I TOTALLY AGREE WITH YOU MAN! That is what is wrong with this country and why all jobs are being outsourced

  • El Pollo de Oro

    “When the money stops flowing down to the man on the street, the blood starts flowing in the street.”—Gerald Celente

    “When people lose everything and have nothing left to lose, they lose it.” —Gerald Celente

    Gerald Celente is absolutely right.

    But there are going to be some major growth industries in this collapsing Third World Ponzi scheme that is The Banana Republic of America (formerly the USA). And here they are:

    1. Drug trafficker
    2. Hit man
    3. Bodyguard
    4. Kidnapper
    5. Mugger/armed robber

    That doesn’t sound terribly appealing, does it? No, it certainly doesn’t. But desperate people do desperate things, and there is a lot of hardcore desperation in the BRA—desperation that is only going to get worse. How much worse? I’ve been saying that the economic conditions in the BRA are looking more and more like the economic conditions in El Salvador or Jamaica. But when I say that, I will inevitably come across someone who thinks I’m being overly optimistic and says, “You’re predicting Jamaica bad? El Salvador bad? Guatemala bad? No, try more like Zimbabwe bad. Don’t kid yourself, pal: we’re in real trouble.”

    God help The Banana Republic of America (formerly the USA).

  • Grover Lembeck

    Sorry, “thinking”, but the people who have nothing aren’t the one’s who led this nation to ruin. If they were, they wouldn’t have nothing now, would they? And far from being a Democratic base, they are primarily folks who can’t or don’t vote.

    In the late 90′s, major corporations changed their principles to a “profits only” model, choosing to deliberately deny what they owe to the society that they are a part of. Why have the charters of these corporations, or any corporation that acts in such a deliberately destructive manor, not been revoked?

    Because they are the ones who have all your money, and they share the crumbs
    with their friends in Washington and their property in the media. And 50% of the citizenry pay no INCOME taxes, which is a far, far cry from paying no taxes at all.

  • Michael

    Read Deuteronomy 28:15-68 (In “The Living Bible”-paraphrased edition for easy understanding)

  • fudgie the whale

    Wow.

    I didn’t know there were so many Communists in the USA… er, excuse me, ‘Socialists’.

    I own a company. I employ a lot of people… if you raise my taxes, I will start to fire people.

    Yes, I’m in business to make money. I didn’t start my business to ‘give back’ or ‘spread money around’, and I don’t ‘owe to the society that I’m a part of’…

    I worked 7 days a week for 20 plus hours a day for years building my company. While you were taking vacations and spending time with you family or spending too much of your not really earned paycheck on a starter mansion, I was working.

    Now you’re complaining that you actually are surprised that you don’t have a higher paying job anymore or that people like me who create jobs for people like you should have to pay more taxes because it isn’t ‘fair’.

    Life isn’t fair, get over it. Get off your lazy ass and create wealth for yourself and your family. Don’t expect me to work my butt off and then just give you 50% of what I built. It’s not going to happen.

    I will close my company and move to another country before I will just give you something for free because you feel you are entitled to it.

    The only thing you’re entitled to is death.

    Get up, get moving, and just stay the hell out of my way.

    • Gary

      BTW-yes I do expect you to “work your butt off” and be taxed AT LEAST 50%.

      “I will close my company and move to another country before I will just give you something for free because you feel you are entitled to it.”–Good do not let the door hit you on the way out! You will have no taxes in Somalia and no pesky government regulations etc. You will also not have roads, schools, hospitals etc but your a hard working self made man-who needs health care when your so hard working. If your heart ever gives out I am sure your hard working body will just grow a new one. Your self made after-all. You do not need the rest of us.

      See my responses below, I forgot to hit the reply button before submitting them. I was too stunned by your selfishness.

    • Gary

      Please stop berating the poor. You seem oblivious of the fact that if Bill Gates had grown up in different environment, he could have ended up homeless on the street. The right wingers have no understanding of human society.

      • LeonKennedy

        The way I see it “fudgie” shouldn’t be the one moving, if anyone should be moving it’ll be YOU! If you like Europe so much GET OUT OF HERE! I’ll help you pack for FREE! Since you think you are entitled to everything I’ll give you free labor. I’ll kick your ass and everyone else who wants socialism in America before I let you destroy what our founding fathers made….of course your democrat friends are already doing a good job of that now aren’t they?? Fyi just so we’re clear and your tiny brain can understand: I am not a stupid republican. The most funny part is imbeciles like you never mention the fact that the Fed is the one who is inflating our currency and destroying it every time they print more, and how the IRS takes FROM YOUR SO CALLED POOR with fake laws about “income tax”, and how your savior obama is just as war mongering as Bush is and won’t stop all our wars in the middle east, for reasons your tiny brain can’t comprehend. So your little pee-brain schemes of “re-distribution of wealth” is almost laughable! Do yourself a favor with all your downtime why don’t you actually RESEARCH what has ACTUALLY been going on through the last 5 presidential administrations and who ACTUALLY control this country. Something else to think about that even you can understand: if the “rich” control this country..then what makes you think that they would ever make laws that make “the rich” give their money to “the poor”???? You think about that Mr. “robinhood”

        • hotmessexpress

          *pea-brained, just sayin, maybe you ARE a stupid republican

      • Doc

        Gary,

        The reason you are poor is because you believe you are and should be. Do yourself a favor, get the book “Think and Grow Rich” by Napolean Hill. Read it and fully digest it. If you do your life will change.

        If you think, as many others destined to stay poor that reading a book will not help you than you are correct. However, if you beleive you can change and want to change you can. Even in the worst of economies you can grow wealthy. What you do with your wealth is your own decision. The government, through wealth re-distribution or any other means has NEVER created ongoing sustainable wealth.

        I honestly wish you the best of “luck”. The “rich” can and often do give sizable charitable donations to help the poor which the poor often do not recognize or appreciate.

        Doc

    • Mariah tells it to ‘em

      Oh please, your lying when you say you work 20/7. Who exactly made you rich in the first place? It was most certainly not you. It was the consumer.But you don’t see that.

    • Beast!

      @fudgie the whale
      I completely agree with you! the other people are just brainwashed and they don’t know anything about this economy haha

      • Beast!

        well all the socialists are brainwashed…

  • Colin

    If I work at a minimum wage job, my wages are reduced by both income and payroll tax. (Here is a wikipedia article on income tax: http://en.wikipedia.org/wiki/Income_tax) Frankly, I become very angry when the Republicans and the upper class claim the working class don’t pay income tax. They do. I have worked at retail stores making $8 an hour, $10,000-$15,000 annually. The Fed and the State take money from my check for the income taxes. The political pundits on the right are being disingenuous when they say that my income is not being taxed.

  • Gary

    fudgie the whale–you are the problem with this country. go ahead and move to another country-how about Somalia???I hear the taxes are non existent. Please go we do not need more selfish people who in their own words do not feel they need to give back. Lets see how successful you will be in Somalia or Ethiopia?

    You are only successful because you live in a country where you can be successful.

    I think it would be best for you “job creators” to simply move out of the country but you need to leave all the wealth to the country that gave you the opportunity to get wealthy.

    That should be ok, you are a hard working self made man-you will be rich in Somalia.

    You my friend need to be taxed hard and your wealth spread around. As I see it it looks like most of the country agrees with taxing the rich HARD!

  • Gary

    “I worked 7 days a week for 20 plus hours a day for years building my company. While you were taking vacations and spending time with you family”.

    LOL

    You are also not telling the truth. It is physically impossible to work 7 days a week, 20 hours a day for years. Ever hear of something called sleep?

    All you right wing nut business owners have an inflated sense of self-worth.

    I also feel sorry for your family that you chose to not spend time with them. How sad. Talk about misplaced priorities.

    I have to believe your post is in jest as no one could be so shallow.

  • jim

    there are so many things going wrong in the U.S. where do i start welfare for illegals oh! …..thats future dem voters. their total costs are in the hundreds of millions a year. and don’t forget welfare is happy to set up pregnant 17yr olds with a new apt., food stamps, med. care and cash and they raise their children, to do the same. greed of U.S. companies moving over seas at our expense. the worse thing is that our gov. and we the people let them. and the fed. is printing money day and night which is destroying the value of our dollars. china, russia have been doing their best to remove the dollar as the world reserve currency which would be devastating to us. the generation after ww2 (approx. 85 mil.) drove the economy 30 or 40 yrs. 50 mil. babies have been aborted over the years. the gen. coming now is only approx. 55 mil. not enough to drive the economy now. won’t even go into dumbama driving us to the brink of ruin.

  • RP2012

    Colin:

    Just because you have money taken from your check doesn’t make you a taxpayer. What makes you a taxpayer is if that money is not returned to you when you file.

    I have no money taken from my check from federal, and a pittance taken from state. But because I have a child, I still get around $5,000 from the government and don’t owe a penny. This is more than I pay in FICA and income taxes combined. I take that money and save it for my child, because she’s going to have less than I will one day, because of what the government’s doing now. One day, they’ll have to steal from her because of what my and my parents’ generations greedily demanded from the government.

    Statists like Gary, who complain that they didn’t do enough to prepare for their own well being, but now expect the government to steal from the rest of society to provide for their wants are E-V-I-L and ignorant.

    • hotmessexpress

      if you would like to reply to “Colin” simply click “reply” on that post. Pretttttty simple. just sayin.

  • Afi K. James

    Gary2, is a *******head, ************ the tax the rich nonsense, end the income tax and more.
    and indict the rich and put them in jail.

    • Guido

      Have you noticed Gary has never, ever explained HOW stealing from other people would help get him, or anyone else, back on their feet? I don’t think the fedgov has a track record of success at managing ANYTHING, so I doubt they’ll be able to wave a magic wand and miracle everyone up a job.

      Since jobs generally are created by people with the money and vision to start businesses, and even people with money don’t necessarily have the vision, I don’t see things improving after Uncle Sugar robs the rich at gunpoint.

      • Gary

        The wealthiest 1 percent of Americans already have a greater net worth than the bottom 90 percent, based on Federal Reserve data. Yet two-thirds of the proposed Republican budget cuts would harm low- and moderate-income families, according to the Center on Budget and Policy Priorities.

        http://www.nytimes.com/2011/06/05/opinion/05kristof.html?ref=nicholasdkristof

        If I have to even explain this there is no hope.

        Tax the mother F****** rich hard

  • http://yahoo.com Marsha Mayer

    (Postscript:) If I sound cold-blooded,and unfeeling,in saying that often total revolutions are necessary,to change dictatorial govts.,I am not saying that I LIKE THEM,or that I WANT ONE. I do not.

    I am being impartial,objective,and not emotional in this opinion.I have studied a lot of history,govts.,and sociology,and I see the cycles of societies,from an intellectual view.That way,I do not get entangled in emotional,personal,distractions of my own.That’s the only way I can see clearly,what usually happens.

    the last thing I would want,is to get trapped in this century,in a huge country,that is heading for a massive blow-up,explosion,take-over by foriegn troops,or “1984″govt. I’d even prefer the dangers of a tiny county somewhere in south or central America,to getting caught in the American,massive dysfunction and horror that is going to happen,one way or another.

    I might die in this one,if I do not leave.But,the other areas of the world are pretty dangerous,too.However,the dysfunction on a grand scale,that’s due to happen,is coming faster,and faster than expected.I’ll probably get caught in it.somehow.I’m not dying yet,or sick horribley,so I’ll still be alive.So will many of you.

    The least I can do,is “vacation”somewhere in south,central America(my Spanish is fair,but you need Portuguese,too.)and look for stable,safer little countries.Hard to find there.s’pecially for we Gringos!But I have the habit,of moving when I have to,even extremely,and adapting to new circumstances.So it’s not out of the question.

  • krystal

    Fudgie the Whale and Gary both have points. Because Fudgie is a businessman he shouldn’t be ordered to give Gary or anyone like Gary a dime. Gary on the other hand has a valid point to say that since things are so bleak the government should tax the rich. The obvious fixes to both scenarios is that Fudgie gets taxed to bailout the government which is racking up a huge debt. They at first will have to agree upon a iron-clad debt ceiling. What fudgie would have to do is hire people, raise income, and forcefully retire those who have been in his company. Of course to smooth things over a severance package would have to be in place. Gary would have to get a better paying job (since people like fudge would start hiring)and if not he should really start considering leaving the country, moving to another state, or doing something drastic to change the amount of money that he saves if he is saving money. The only problem with all scenarios is that people think about themselves in crisis. We are human. It’s something that we cannot get over. Yeah, we do have food drives, money drives, clothing drives etc but when it really comes down to surviving it is the strong and the willing that will survive. It’s the end of the road for America if we as individuals cannot agree on one specific idea to fix the country (jobs). It has to be a solution that everyone can do from Fudgie to Gary. Sad thing is it has become a more serious dog eat dog society. I have faith that during a critical moment America will pull itself back together even if it’s a shell of what it used to be. Unlike you guys here that are arguing about particulars and government policies I’m using what God gave me (brain, arms, and legs) and getting out of here to start a new life in Asia.

  • Gary

    Truthfully the economy is so bad due to republican conservative policies. They are a cancer on society and stand in the way of all human progress.

    • Beast!

      @ gary
      if you want to blame the republican policies then why dont u look at the democrats and see how obama is currently doing since he got us in more debt than ALL the presidents combined. not to mention Clinton was a mistake as well.

  • Thomas G

    In the original text it says that “… The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001…” Wouldn’t it more appropriate to say that “Since China joined the WTO in 2001, American companies chose to outsource (or move) an average 50.000 manufacturing jobs to China.” Or even more accurately, “Since China joined the WTO in 2001, American companies chose to outsource (or move) an average 50.000 manufacturing jobs to China, in order to satisfy American consumer’s demand of ever cheaper products.”
    That is, it all comes around at some point… one way or the other.

  • lol88

    Americans cant afford a PS Vita now,lol

  • Dr. Loud

    Hmmm. Sad to hear of the “you owe me” because I own less than you. The equality of opportunity is defined in our origin–not the equality of outcome. The problem with taking someone else’s stuff is that they tend to produce less, and eventually you run out of others peoples stuff (money). Watch what is happening in Greece and Europe in general. They cannot afford the payouts any longer. It seems, as you look back–when we artificially created value that was not warranted n a free market, i.e. union payment guarantees, entitlement programs, subsidies, and other artificial constraints, the markets seems to be unable to automatically adapt to the change. For example unions ask for more than the labor creates–short term gain–then when oversea manufacturing opens up–companies flee to oversea suppliers–who operate on a market value more than we do. Companies are taxed heavily–so in the long term they will flee to oversea markets–leaving NO jobs here. We do not allow failure to occur as well–failure tempers extreme greed and high risk taking. There is much more opportunity in a healthy market than a controlled market–observe Cuba, Soviet Union, etc. Part of the issues are far more complex than simply taking others wealth. Money is currently being devalued by over supply by the Fed. Politician create constituencies by entitlements, government control over individual control, all in all creating a diminishing value of money and value. How long can this last–time will tell. We are only stalling the inevitable collapse of the economy if this is not corrected.

  • http://www.rozsa.org Andrew

    Interestingly, the author glosses over WHY healthcare costs are increasing vertiginously. I would have thought that the topic should been given a bit more attention, given that health care represents a substantial chunk of any American’s budget.

    Is it us, doctors, who are getting rich, you think?

    Really?

    Here are some statistics… you can come to your own conclusions.

    Family Physician / Doctor – $141,355
    Physician / Doctor, Internal Medicine – $145,652
    Physician / Doctor, Emergency Room (ER) – $182,461
    Physician / Doctor, General Practice – $118,243
    Physician / Doctor, Neurologist – $161,894
    Obstetrician / Gynecologist (OB/GYN) – $180,331
    Physician / Doctor, Plastic Surgeon – $204,467

    Country: United States | Currency: USD | Updated: 22 Jun 2011 | Individuals Reporting: 7,567
    http://www.payscale.com/research/US/People_with_Jobs_as_Physicians_%2F_Doctors/Salary

    Total Compensation for Health Plan CEOs in 2010

    Company
    Name/Title
    Total Annual Compensation
    Full Year Increase or (Decrease)

    Aetna Inc. Ronald Williams, Chairman/CEO (retired as CEO on Nov. 29, 2010; retired as chairman in April 2011).
    2010: $20,730,968
    2009: $18,058,162
    14.8%

    AMERIGROUP Corp.
    James Carlson, President/CEO
    2010: $10,491,542
    2009: $5,232,249
    100.5%

    Assurant, Inc.
    Robert Pollack, President/CEO
    2010: $7,869,488
    2009: $6,444,198
    22.1%

    Centene Corp.
    Michael Neidorff, Chairman/President/CEO
    2010: $7,945,720
    2009: $6,077,900
    30.7%

    CIGNA Corp.
    David Cordani, President/CEO*
    2010: $15,225,584
    2009: $6,593,921
    130.9%

    Coventry Health Care, Inc.
    Allen Wise, Chairman/CEO
    2010: $13,647,413
    2009: $17,427,789
    (21.7%)

    Health Net, Inc.
    Jay Gellert, President/CEO
    2010: $7,664,953
    2009: $3,643,342
    110.3%

    HealthSpring, Inc.
    Herbert Fritch, Chairman/CEO
    2010: $5,383,377
    2009: $3,966,635
    35.7%

    Humana Inc.
    Michael McCallister, President/CEO
    2010: $6,147,917
    2009: $6,509,452
    (5.6%)

    Molina Healthcare, Inc.
    J. Mario Molina, M.D., President/CEO
    2010: $3,768,029
    2009: $1,866,260
    101.9%

    Triple-S Management Corp.
    Ramon M. Ruiz-Comas, President/CEO
    2010: $1,519,855
    2009: $1,318,431
    15.2%

    UnitedHealth Group
    Stephen Hemsley, President/CEO
    2010: $10,810,131
    2009: $8,901,916
    21.4%

    WellCare Health Plans, Inc.
    Charles Berg, Executive Chairman
    2010: $3,266,488
    2009: $5,074,900
    (35.6%)

    WellPoint, Inc.
    Angela Braly, President/CEO
    2010: $13,460,445
    2009: $13,108,198
    2.7%

    *2010 was Cordani’s first full year as CEO and President.

    SOURCE AND METHODOLOGY: Total compensation is derived from company proxy statements and includes base salary, bonuses, stock awards, options/Stock Appreciation Right (SAR) awards, non-equity incentive plan compensation, non-qualified deferred compensation earnings and all other compensation. May 2011.

    http://graphicsweb.wsj.com/php/CEOPAY10.html

    UnitedHealth CEO Stephen Hemsley took home $102 million in 2009

    Read more: UnitedHealth CEO Stephen Hemsley took home $102 million in 2009 – http://www.fiercehealthpayer.com/story/unitedhealth-ceo-stephen-hemsley-took-home-102-million-2009/2010-07-06#ixzz1QEOjbrgl

    Through the economic recession and its aftermath from 2008 to 2010, the combined profits for UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Cigna Corp. and Humana Inc. increased 51 percent.

    In the first quarter of 2011, the combined profits of the five companies, which cover one-third of the U.S. population, surged 14% to $3.6 billion. If the trend holds, they’ll rake in a record $14.4 billion in profits in 2011.

    Health Insurers Making Record Profits as Many Postpone Care
    By REED ABELSON
    Published: May 13, 2011

    “The nation’s major health insurers are barreling into a third year of record profits, enriched in recent months by a lingering recessionary mind-set among Americans who are postponing or forgoing medical care. [...]”

    http://www.nytimes.com/2011/05/14/business/14health.html?_r=1

    Premiums have risen 131% since 1999 for families with employment-based insurance. America’s Health Insurance Plans (AHIP), the insurance industry’s mouthpiece, likes to blame customers for rising premiums. People who buy health insurance have the annoying habit of using it when they get sick. But premiums have increased at twice the rate of medical inflation.[...]
    http://health-insurance-companies-news.blogspot.com/2011/06/reasons-health-insurance-companies.html

  • http://endoftheamericandream.com Bliver

    In my opinion as bad as things are it is necessary that all Americans need to redefine success and what a good standard of living is and what it is to live a meaningful and productive life. As a country we have been more wasteful of the world’s resources and have done more harm to the environment than any than any other group in the history of mankind and for what? So we can drive the latest fastest cars? Ware the latest fashions? Have more money to spend on totally useless stupid gadgets and toys while a quarter the word is starving no wonder the rest of the world hates us. Never mind the rich, the simple fact is this Ideal middle class life that everyone is trying to aspire to is just a load of commercialized crap that is being sold to us by Corporate America and the fact that we are buying this materialistic fantasy world definition of what it means to be a success and a worthy person is what really gives the rich elite so much power over us and our Government.

  • http://hemp.to/ hemp

    Both political parties are in agreement that change is needed but the ways being approached are where the problems begin. The idea of turning private health insurance companies into government run companies seem oh so easy to some but others fear that a loss in jobs as well as a raise in taxes will overshadow the end result. For each side of the government this is only a small fraction of the actual plan..Either way it is clear to us that there will be controversy with whatever decision our government comes to but like always they will do what is best for the country rather than a certain group of people.

  • karen

    i have one thing to say jesus is comming and i cannot wait …

  • Jadon

    Well I can tell you this: It’s not Barack Obama’s fault. We already had a bad economy when he first became the president of the united states. It’s because the other people who are working for the government won’t let him do anything, and yet they still think it’s his fault.

    • Beast!

      I think its dumb how your using the statement “its not barack obama’s fault. We already had a bad economy when he first became the president of the united states. It’s because the other people who are working for the government won’t let him do anything, and yet they still think it’s his fault.”
      You are using the president before as a scapegoat to say it’s not obama fault…Yes Bush was not perfect but he didnt get us in 6 trillion dollars in debt like obama did!

  • seth

    How can people by nice big homes so fancy and by RVs and all the big screens when the economy is this bad?

  • Paul Felix Schott

    When this Old World starts getting you down. From Pollution the cost of OIL,
    Heating Fuel,The Fuel you put in your Vehicles, You Electric Bills from
    cooling air conditioners and lights not to speak of the Evil. The TAX that all
    Governments Federal, State, County and City put on everything they can thing of.
    They are supposed to serve us. Not put a burden on its people. That they are
    elected to serve all the people you, not their own Pocket Books.

    The Wicked keep putting higher taxes on everything. Making it a Heavy
    Burden on many that are already struggling just to put food on the table.
    Too many Americans have lost their home to the tax collector or to foreclosures
    from the unjust bankers greed. More are out of work and lost their homes then
    in the GREAT DEPRESSION,in the last ten years. All Americans and many Nations
    need good jobs and more of them. Not more TAXES.

    There is a Industry that will employ workers and is growing by more then 50%
    every year. There is a clear way for all up on the roof the Sun Light is free
    fuel from GOD. Some wicked in Government have been backing Coal, Oil, Gas and
    the Nuclear industries for too many years. These kickbacks to them were called
    Subsidizing Industry Technology. Most all Wise Men and smart Economist and
    Environmentalists call this padding their pockets and subsidizing back to the
    Stone Age.

    This might even been funny in the 1960?s. If it were a Fred Flintstones and
    Barny Rubble Movie. About How to aggressively systematically work with the rich
    to Pollute Ground Water quality to the point it is unsafe to drink or use.
    So to they make a law you can only buy water from their pipe line. And to make
    the air we breath full of Toxic Gases, Sulfur Dioxide and more Radioactive
    and Acid Rain. Injuring all living things on Earth.

    With Fred Flintstones to the Rescue. To help create a Healthier Environment.
    For all Future Generations. By spotlighting Renewable Energy and Free Energy
    like Wind and Solar. On his and his neighbor Barny Rubble’s roof. Even though
    the greedy wicked would do everything to stop or slow them down.

    Just imagine a dream that a 100 years ago one of the smartest man to ever
    live had. A dream after working with Sun Light. That all on Earth would use
    Free Energy Solar Energy.

    That Dream also shared by a man that dreamed this over 2,250 years ago.
    Both These men showed the world in their days. That this dream of Free Energy
    Solar Energy World wide was very possible. Both of these two wise men had
    first hand worked and researched their experiments for not just days, weeks
    put for many years.

    One of these men used chalk on Black Board the others board was a black
    stone table or floor covered with white sand and used a stick. One of these
    two Brilliant men had Kings from all most every Kingdom on Earth come to him
    for advice.

    The other went to almost every nation on Earth. Freely on his own dime
    Teaching All that had ears to hear. He would win the Nobel Prize for doing so.
    For his work on Solar Energy. Only after years of doing research and when most
    Scientist on Earth would not take the nomination for the Nobel Prize in 1921
    this Brilliant scientist was awarded it in 1922 for the 1921 year.

    Now if this was just a Pretend TV Show or a Movie from a dream. This would
    be a great Sci Fi Story Line. In the 1960?s or even better to day. Sci Fi story
    Movie or dream No.

    All that i Have told you did actually really happen. Albert Einstein won the
    Nobel Prize for what? When Government leaders asked him to go on stage. To
    address the Scientific Community and the World. About what he was given the
    Nobel Prize for. When Albert Einstein Had done so. He addressed them with his
    other accomplishments. For years most Governments did not have a ear for
    Einstein’s Dream.

    Archimedes around 250 B.C. was know most of the World over as a great
    Mathematician. One of the first Scientist and Inventor of many things. Even
    the first Laser Ray from the Sun’s Energy. Science Fiction is what you would
    have though you were seeing if you could go back in time, it was real.To day
    we call it The LASER, Light Amplification by Stimulated Emission. Back then it
    was just called Amplification of the SUN Archimedes Death Ray.

    Thousand of years later it would be a Laser. That Albert Einstein help
    make possible. That would unlock one of the first books on Earth.
    The METHOD written by Archimedes. Then over more then 250 years later. When
    well Faded was cut from a scroll and put into a book form, to be easier to
    hide from the Romans by St. Paul. This book sold for over 2 million dollars.
    In New york at Christie’s Auction House.

    These two are at the top of the list of the World’s Greatest Scientists,
    Viewed by Scientist around the World.

    Sad that for the last 25 years or so of every teacher asked no matter what
    Grade k through 16. 80% of them did not know Archimedes. Even sadder 90%
    of them could not tell you what one of the most Brilliant Scientist to ever
    live on Earth. Won the Nobel Prize for.

    It was for the work Albert Einstein did to show the World it could get
    Free Energy, Electric from the SUN. PHOTOVOLTAICS

    You ask this question to any Military general 95% of them will get it right.
    Even more surprising 99% of them will know more about Archimedes then most
    Teachers on Earth. Generals know Energy is the key to Winning.

    At almost one thousand to one Archimedes always won against what all knew was
    impossible odds. Archimedes home town city of Syracuse was victorious against the
    greatest Kingdoms Armies on earth many times. Syracuse once was one of the most
    powerful cities in the World.

    I can only ask you to please look into Solar Energy, Solar Power, Solar Panels
    and Solar array on the internet under Images. To see and explore for your self
    then you be the JURY.

    More then 10 years ago the Internet became most of the World’s Universities
    Learning Platform. A Modern Day Archimedes Resource Center.

    The Solar Energy Industry in the year 2010 has leaped ahead farther and
    faster then any other industry on Earth. The Solar Industry in the
    United States of America alone, has grown by more then 50% in 2010 and it looks
    like that number will go up even higher this year 2011.

    The strong benefits of Solar Energy is Clear Clean Air viewed in major cities
    as improving air quality. Clean Cities. By all that use there brain for good .
    View it as protecting the environment and Freedom from OIL.

    While the Federal Government has eased the Tax on Renewable Energy till the end
    of this year 2011. Some cities in the states that these Legislators come from have
    worked against these tax credits.

    By doing so they are showing their true objectives. That they have
    stock in some power plants and do not want to lose all that Money they
    have been taking out of your pocket books for too many years. By taxing
    you on your Energy Bills. They want to Control Power and Tax Everything
    they can. Not let People be free to get their own power from the top of
    their own roofs.

    By adding their own taxes to them. These wicked leaders think that
    this will take away the incentives to harvest the Free Energy from the
    Sun.

    The Public ability and awareness for all on Earth to use the Natural
    Solar Energy, is Contributing to Production of Solar Energy Products.
    Making the Solar Energy Industry the fastest growing on Earth. A Wealth
    of Free Energy From The SUN.

    The more the wicked try to slow the Solar Energy Industry down, it only Enhances
    involvement and the efforts of the Good at Heart.

    GOD Bless you for reading this.

    The Lord’s little Helper
    Paul Felix Schott

    PS
    through out History Many have tried to wipe the good from our history books.
    Read the Bible Jesus will Bless you more then i can.

  • http://one john

    The US is an economic dynamo, if you take your foot off its neck.
    Obama make Carter look good.
    Replace Obama and his friends, and things will turn around.

  • ted

    There is no doubt that things now are in a bad state. And honestly, I don’t have any faith in our current or future administration. The hope lies within us.
    I can relate to Gary and other people like him. And yes, there shouldn’t be that many tax cuts for upper class, but even if they were paying more tax, it wouldn’t solve anything. Everyday, I see people who are fit to work, but they claim disability benefits. People with unreported income claiming food stamps. My point is that people don’t hesitate or think twice before they claim what isn’t rightfully theirs. Not only people don’t like to work now, but they’re losing their ability to judge right or wrong. As of today, anyone isn’t hesitant about screwing anyone over for their profit. Answer honestly, what was the last time you paid for your music?
    It’s about time we take matter in our own hands. I’m not talking about a big revolution, but simple stuff like: Doing the right thing, letting go of greed, develop and spread a positive mental attitude about working and earning. Remember guys, what made our forefathers so great was their believes and righteousness.
    People still migrate here in order to find opportunity. You know what that proves guys? We’re still the Land of Opportunity! All we gotta do it roll up our sleeves and keep at it. One day, we will flourish once again. One day.

  • Nick Conklin

    Ok so i understand that there is a huge gap in the wealthy and poor in this country but handing out more money is worst thing we can do right now with the national debt so high. I can conceivably understand why Gary would want to tax the rich more, i dont agree with it though. I am 21 and make just about that annually too($21,000) i dont have a college degree but i do rent, pay bills, save for my future, (CDs, IRAs, 401ks, other mutual funds) i dont use all of these yet but i plan too, i also have health iunsurance through my job. this is what the “poor” should be doing, i am given the benfit of starting out my life in a terrible economy and nothing could be better. This will force a generation of americans to work harder and rely more on themselves…because if you decide to rely on just the governemnt, you might turn out like gary. america doesnt need a hand-out in needs tenacity and optimism, and smart investment advice. The longer we are at each other’s throats for being rich or for wanting more the longer all of us will suffer, i promise that

  • LOLZZZZZZZZ

    HHHHhhhhAAaAAaaa

    • LOLZZZZZZZZ

      it’s because it’s effecting our lives and shopping’s are really expensive

  • Smith

    There is no economic theory to deal with what we are facing. There is no way out. We are ************. Socialist changes are the only evident option and this country is too against those ideas to ever pursue them.

  • Poorstudent

    Any of us can be in a bad position. In 2006 I was making far more money then I am making now. I just graduated college, have my masters degree in sociology,and now pursuing a career to be a paramedic. The economy is an employers market, they can hire who ever they want. Why not hire someone with more education but pay them less then what they are worth.
    Currenly I’m working $12 an hour because I can’t find anything else,I apply for jobs , get the interviews and I’m always a top candidate for the positions that I am applying for, but there is someone who is always more qualified or has more experience then me.In 2006 there were many jobs available making 50k with no degree. Now you have to have a bachelors to work at a job that you would be working while supporting yourself through college. If you start looking in other fields , they won’t hire you because you are too over qualified for the position or they have the fear of you leaving once you find something better. I feel for the people out there who are struggling which many americans are. I’ve never been “poor” but times are different now.

  • Ricardo

    WE NEED A REVOLUTION!!! LET US “THE PEOPLE” TAKE BACK THIS LAND FROM THOSE RICH DIRTY BASTERDS!!!

  • Ricardo

    CIVIL WAR WILL WORK!!

  • Jake Heartstone

    You should blame Apple for the bad econ. It’s no coincidence that during this timeframe where the econ is bad. Apple has been growing enormously.

    1. They have not been paying dividends on their profits for while now. (only recently did they do it because shareholders complained).

    2. They have been hoarding cash and avoiding paying taxes. The cash is in an overseas bank. Which means the US bank is not the one holding on to the money thus US bank is not loaning money out from that cash pile.

    3. When they’re hoarding money, money is not circulating back to the public. its only being loaned out but not loaned out in the US but in other countries. Money needs to circulate. Think of it as an eco. system. If somebody is hoarding the money less money is in circulation thus new money most be printed to bail out others.

    4. They’ve been avoiding paying taxes and we have been having tax problems or spending problems. Who has been paying taxes? The low income people. The workers who don’t know any better on tax savings or writeoffs etc. the ones that don’t know how to run busineses to reduce taxes. Huge separation from the working class and the business class in the us.

    5. They’re also the ones that are putting jobs overseas for all their manufacturing. Mostly in China. Read the news. you hear about the slave labors and working conditions resulting from apple plants.

    If the econ is doing bad right now. Why is apple doing great? Usually in the bad econ. there’s a winner and there are losers.

    Blame Apple.

    • Rose

      I have to agree with you there. Doesnt apple have enough to take us out of this thing? Honestly every trillion/billion/millionaire can. They just don’t.