The Economic Collapse Blog – February 21, 2011
Have you heard the news? The stock market is absolutely soaring and according to the U.S. government and the Federal Reserve we are in the beginning stages of a robust economic recovery. Yippee! The S&P 500 is up 6.8 percent so far in 2011, and the stock market recently hit a two and a half year high. So shouldn’t we all be celebrating? Well, if stock market performance was an accurate measure of economic health, then Zimbabwe would have had one of the healthiest economies on the entire globe during the last decade. But just like Zimbabwe’s stock market was artificially pumped up with “funny money” that was rapidly being devalued, so is ours. All of the “quantitative easing” that the Federal Reserve has been doing is pumping plenty of money into the financial markets and is helping to inflate a false stock market bubble, but it is doing very little to alleviate the suffering of the U.S. middle class. In fact, when you take a closer look at the numbers you quickly find out that the suffering of the middle class is getting even worse.
According to Gallup, the unemployment rate is now over 10%. The number of Americans that have given up looking for work recently set a new all-time record. The number of mortgages in foreclosure tied a record high during the fourth quarter of 2010. Gas and food prices are rising rapidly. The number of Americans on food stamps continues to increase every single month.
Yes, right now the economic situation is not in free fall like it was a couple years ago. We should be thankful for that. Periods of relative stability such as we are enjoying now will be few and far between in the years ahead. This “bubble” of economic calm is a great opportunity that we should all be taking advantage of.
However, those that are hoping that this is an economic “turning point” and that things will soon be back to “normal” are going to be greatly disappointed. This is about as “normal” as things are going to be ever again.
Even during this time of relative economic stability, the U.S. middle class is still being ripped to shreds. If there are those among your family and friends that are somehow convinced that the U.S. economy is recovering nicely, you might want to show them the following 18 very sobering facts….
#2 According to the U.S. Bureau of Labor Statistics, the number of job openings in the United States declined for a second straight month during December.
#3 There are currently more than 4 million Americans that have been unemployed for more than a year.
#4 The number of Americans that have become so discouraged that they have given up searching for work completely now stands at an all-time high.
#5 Gasoline prices in the United States recently hit a 28-month high.
#6 During the 4th quarter of 2010, 4.63 percent of all U.S. home loans were in foreclosure. That matched the all-time high, and it was up significantly from 4.39 percent in the 3rd quarter.
#7 It is estimated that there are about 5 million homeowners in the United States that are at least two months behind on their mortgages, and it is being projected that over a million American families will be booted out of their homes this year alone.
#8 Almost 14 percent of all credit card accounts in the United States are currently 90 days or more delinquent.
#9 The average credit card rate in the United States had increased to a whopping 13.44 percent at the end of 2010.
#10 Americans now owe more than $890 billion on student loans, which is even more than they owe on credit cards.
#11 Average household debt in the United States has now reached a level of 136% of average household income. In China, average household debt is only 17% of average household income.
#12 U.S. life expectancy at birth is now three years less than Canada and four years less than Japan.
#13 New home sales in the state of California were at the lowest level ever recorded in the month of January.
#14 43 percent of all mortgages in south Florida are currently underwater.
#15 Prior to the most recent economic downturn, there were usually somewhere around four to five million job openings in America. Today there are about 3 million.
#16 When you adjust wages for inflation, middle class workers in the United States make less money today than they did back in 1971.
#17 One out of every seven Americans is now on food stamps.
#18 One out of every six elderly Americans now lives below the federal poverty line.
You know things are bad when articles start popping up in the mainstream news instructing us how to interact socially with the hordes of unemployed Americans that are out there today. A recent USA Today article entitled “What not to say to someone who is unemployed” listed some of the things that you should not say to someone that does not have a job. The following are some of their suggestions on what NOT to say….
“Hey, have you found anything yet?”
“How’s the search going?”
“You just have to pound the pavement.”
“Something will turn up.”
“It’s tough out there.”
“Other people are going through the same thing.”
“Maybe you’re asking for too much money.”
“Maybe you should go back to school.”
“There are plenty of jobs out there.”
I am sure most of us have heard things like this at one time or another. It can be a soul-crushing thing to have others like at you in pity because you don’t have a job and you can’t pay the mortgage and feed your family.
Most unemployed Americans are not lazy. The vast majority of them desperately want jobs. But the U.S. economy is not producing nearly enough jobs today. As noted above, the U.S. economy currently has about 3 million job openings, but approximately 20 percent of the workforce wants to find a full-time job. The demand for jobs is far, far, far greater than the supply.
Unfortunately, this is the legacy of decades of bad economic decision-making. The U.S. economy should be able to provide work for every single person that wants it, but because of the choices that have been made that will never be the case again.
The middle class in America is being ripped to shreds right in front of our eyes and very little is being done to stop it. Desperation is rising across the nation. More Americans slip into poverty every single day. It is almost as if a cloud of gloom and despair has descended upon the U.S. economy and every single month the situation only seems to get darker.