By Ken Cauley on March 18, 2011 · View Comments Comments · in Business
It is no mystery that the United States economy is struggling right now. We hear the consistent cries across virtually every medium of communication, online and offline, stating the same thing. While the causes and culprits are tirelessly up for debate by those with opposing viewpoints and beliefs, one thing we can hopefully all agree upon is that something is terribly wrong. Rest assured that you will not hear about Charlie Sheen giving his ‘winning’ approval on the US economic decisions over the past several decades. Make no mistake, if you think the US federal government is the only bad seed in this party, you’re as blind as they are. This growing fiasco has involved everybody that has ever made a financial decision; from federal and local governments to large and small businesses to the most powerful decision makers of all…everyday consumers.
The America Family Association has organized ten powerful economic graphs that put financial facts and figures into visual form. Sometimes you can quote economic statistics to people until you are blue in the face and it won’t do any good, but when those same people see charts and pictures suddenly it all sinks in. As you examine the economic charts below, pay special attention to what has been happening to the U.S. economy over the last 30 or 40 years. All of the economic problems that we are experiencing now have taken decades to develop. The sad fact of the matter is that we have been living in the biggest debt bubble in the history of the world over the last 40 years. All of this debt has purchased a wonderful standard of living for the vast majority of us, but all of this debt has also destroyed the economic future of our children and our grandchildren. Someday future generations will look back on what we have done in absolute horror.
With absolute sincerity to our great nation, my professional recommendation is to be prepared for the worst. Let’s of course go out kicking and screaming and not give up without a fight, but the writing is on the wall. Short of a miraculous recovery that takes, at the minimum, decades to complete (anything is possible), I would start thinking about how to best take care of you and your family for the remainder of your living years and beyond. It involves NOT relying on anybody else but yourself to make sound short and long-term financial decisions. It involves having a backup plan and a backup plan for your backup plan. And heck, if we as a nation get smart and make a true recovery (even if it takes 40 years), you’ll be one step ahead of the competition and able to pass down your financial wisdom and advice to younger generations.
Take a good look at these graphs and allow the information to sink in. Use common sense to determine how this has and will continue to impact your life and build a strategy on how you plan to get active in protecting yourself against the seemingly inevitable economic brink wall.
Federal spending is almost 18 times higher than it was back in 1970. Now Barack Obama has proposed a budget that would increase U.S. government spending to 5.6 trillion dollars in 2021. Just imagine what the following chart would look like if that happens....
he U.S. national debt is currently $14,081,561,324,681.83. It is more than 14 times larger than it was back in 1980. Unfortunately, the national debt continues to grow at breathtaking speed. In fact, the Obama administration is projecting that the federal budget deficit for this year will be an all-time record 1.6 trillion dollars.
The chart is from an official U.S. government report to Congress. As you can see, it is projected that interest on our exploding national debt is absolutely going to spiral out of control if we continue on the path that we are currently on....
The sad truth is that it is not just the U.S. government that has a massive debt problem. U.S. households have also been accumulating debt at a staggering rate. Total U.S. household debt did not pass the 2 trillion dollar mark until the mid-1980s, but now total U.S. household debt is well over 13 trillion dollars.
The total of all debt (government, business and consumer) in the United States is now well over 50 trillion dollars. For the past couple of years this figure has been hovering around a level that is equivalent to approximately 360 percent of GDP. This is a debt bubble that is absolutely unprecedented in U.S. history.
There are about 3 and a half times as many unemployed workers in the United States today as there were when 1970 began. These jobs losses are going to continue as long as we allow our corporations to pay slave labor wages to workers on the other side of the globe. All of the major trends in global trade are very bad for the U.S. middle class. For example, the U.S. trade deficit with China for 2010 was 27 times larger than it was back in 1990.
For most of the post-World War 2 era, when the median duration of unemployment in America reached 10 weeks that was considered a national crisis. Well, today competition for jobs is so intense that the median duration of unemployment is now well over 20 weeks
Since the Federal Reserve was created in 1913, the value of the U.S. dollar has declined by over 95 percent. One of the reasons given for the existence of the Federal Reserve is that the Fed helps control inflation. But that is a huge lie. The truth is that the United States never had consistently rampant inflation until the Federal Reserve took control. In particular, once the U.S. totally went off the gold standard in the 1970s inflation really started escalating out of control.
Now the Federal Reserve says that the solution to our current economic problems is to print even more money out of thin air. The games that the Federal Reserve is playing with our money supply are simply inexcusable. Just look at what the Federal Reserve has done to the monetary base since the beginning of the recession.
The price of oil is now ridiculously high. A high price for oil is very, very bad for the U.S. economy. Our entire economic system is based on being able to use massive quantities of very cheap oil. Unfortunately, that paradigm is starting to break down and the consequences will be very bitter. Back in mid-2008, the price of oil hit an all-time record of $147 a barrel and subsequently the world financial system imploded a few months later. Well, the price of oil is on the march again and that is very bad news for the U.S. economy.
Source: http://www.afa.net/Blogs/BlogPost.aspx?id=2147503555
Tagged with: america • americans • debt • dollar • economy • federal reserve • government • household debt • inflation • money • print money • unemployment
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