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No Recovery - Next up, Resession or Collapse?

ilene's picture




 

Did the U.S. economy just enter a recession? In Federal Withholding Tax Data Says US Already In Recession, Lee Adler explains why he thinks we've already entered a recession. In the article below, Michael Snyder argues that we're on the brink of an economic collapse. Ilene 

 

Economic Recovery

Courtesy of Michael Snyder at Economic Collapse

If this is supposed to be an "economic recovery" it sure is pathetic.  In fact, as you will read below, the numbers tell us that this is the worst economic recovery that the American economy has ever seen. 

If what we had experienced was a "normal" recession and a "normal" recovery, then jobs, economic growth and home values would have come roaring back by now.  But they haven't.  The Federal Reserve injected unprecedented amounts of new money into the system and the federal government went into unprecedented amounts of new debt, but all of that effort has not accomplished much.  It did buy us a little bit of time and a period of relative economic stability, but now there are all kinds of signs that we are about to go into another recession (or something even worse).  So is it really honest for Ben Bernanke and Barack Obama to be using the term "economic recovery" to describe what is happening?

The truth is that what is really taking place is that the long-term economic decline of the United States is beginning to accelerate.

But most Americans simply don't understand what is going on.

The mainstream media teaches us to blame our politicians for the economy.  One recent survey found that 44 percent of the American people believe that the U.S. economy is "worse than when Obama was inaugurated".

Yes, Barack Obama is a horrible president.  But the economic downfall of this nation is not all his fault.  George W. Bush was a horrible president too.  So was Bill Clinton.  Congress has been corrupt and incompetent for decades.

Of course the institution that is most responsible for our economic problems is the Federal Reserve.  Thankfully, more Americans than ever are starting to realize this.

But if you listen to Ben Bernanke and Barack Obama, you would think that a great "economic recovery" has begun.  They would have us believe that they know exactly what our problems are and that they know exactly how to get us out of this mess.

Unfortunately, what we have experienced is not much of an "economic recovery" at all.  According to the Wall Street Journal, this is the worst "recovery" from a recession that the U.S. economy has ever seen....

On economic growth, real GDP has risen 0.8% over the 13 quarters since the recession began, compared to an average increase of 9.9% in past recoveries. From the beginning of the recession to April 2011, real personal income has grown just .9% compared to 9.4% for the same period in previous post 1960 recessions.

So what is really going on?

Sadly, what we are experiencing right now is a brief period of stability in the middle of a downward spiral toward economic oblivion.

The CEO of Pimco, Mohamed El-Erian, says that it should now be obvious to everyone that all of the efforts of the U.S. government and the Federal Reserve to stimulate the economy simply have not been enough to solve the structural economic challenges that we are facing....

"It's clear that the stimulus-induced recovery hasn't overcome the structural challenges to large-scale job creation."

The U.S. economy is not producing enough jobs.  Today, there are 25 million Americans that are either unemployed or underemployed.

But the inability to create jobs is not a new phenomenon for the U.S. economy.  The truth is that between 2000 and 2007, the U.S. economy had its poorest stretch of job creation since the Great Depression.

However, since 2007 the employment situation in this country has gotten a lot worse.  Take a minute and watch the stunning video posted below.  It shows how rampant unemployment swept across this country between 2007 and 2011....

Our politicians promised us that globalization would be great for the U.S. economy.

Well, it was great for the big corporations to be able to pay slave labor wages to workers on the other side of the globe, but things have not worked out so well for workers in this country.

Millions of our jobs have been lost.  Millions more jobs are being lost.  Yet our politicians do nothing to stop the bleeding.

Things have gotten so bad that even the top of the food chain is shipping jobs overseas.

Just consider this recent headline which appeared in Business Insider: "Goldman Sachs Is Firing Employees In The US So It Can Hire 1,000 In Singapore"

If even jobs at Goldman Sachs are being sent out of the country, are any of our jobs safe?

Many Americans would love to start a business instead of having to work for someone else, but the economic environment has become incredibly toxicfor small businesses in the United States.

The rate of new business creation in the United States has been declining steadily since the 1980s.  Our politicians are literally choking the entrepreneurial spirit to death in this country.

Today, more Americans than ever are dependent on the government.  In fact, it has gotten to the point where the U.S. economy itself is highly dependent on the government.

So what is going to happen when the government is not handing out so many goodies?

The era of rampant spending in Washington D.C. seems to be coming to an end, at least for now.  The U.S. national debt has become so outrageous that many members of Congress are finally determined to start making some cuts.

While it is true that cutting government spending is long overdue, most Americans don't realize that cutting government spending will also mean that "the economic sugar high" that we have been experiencing will start to wear off.

If we try to live within our means, that is going to cause a lot of economic pain, and the American people are not too good about making sacrifices these days.

Look, whoever is elected in 2012 is going to be in for a rough ride.  Some very difficult economic times are ahead, and whoever is elected in 2012 is going to get blamed.  By 2016, the president is probably going to be the most hated person in America.

But the truth is that these economic problems have been building for decades.

We didn't get here by accident, and our economic problems are not going to be solved overnight.

In fact, many financial analysts are warning that they are about to get a lot worse.

For example, David Rosenberg of Gluskin Sheff says that there is a 99 percent chance that the U.S. will fall into another recession by the end of 2012.

As the economy continues to crumble, U.S. cities will become increasingly hostile places in which to live.

According to a recent Rasmussen Reports national telephone survey, 41 percent of Americans say that crime has increased where they live over the past year and only 6 percent of Americans say that crime has decreased where they live over the past year.

But just wait until the economy really collapses - that is when all hell will break loose.

In a recent article entitled "Is The Economy Improving?", I quoted statistic after statistic that showed that the U.S. economy is actually continuing to decline.

The American people are starting to lose patience.  In fact, people all over the country are starting to get more than a little crazy.  For example, there is a now a national "epidemic" of people robbing pharmacies in order to get a hold of painkillers.

Pharmacists all over the country are being robbed at gunpoint.  Some prescription painkillers will reportedly sell for as much as 80 dollars a pill on the street.  As a recent article in the Washington Post noted, things are getting really dangerous out there for pharmacists....

“It’s an epidemic,” said Michael Fox, a pharmacist on New York’s Staten Island who has been stuck up twice in the last year. “These people are depraved. They’ll kill you.”

Armed robberies at pharmacies rose 81 percent between 2006 and 2010, from 380 to 686, the U.S. Drug Enforcement Administration says. The number of pills stolen went from 706,000 to 1.3 million. Thieves are overwhelmingly taking oxycodone painkillers like OxyContin or Roxicodone, or hydrocodone-based painkillers like Vicodin and Norco. Both narcotics are highly addictive.

But this is what our country is turning into.

We are a nation of addicts.

Our national addiction to debt and our national addiction to greed have brought us to the brink of economic disaster.

If you are waiting for an "economic recovery", you should stop waiting.

This is about as good as things are going to get.

From here on out, things are just going to keep going downhill.

Most Americans are going to be absolutely blindsided by the economic collapse that is coming.

But that doesn't have to be you.

You still have some time to get prepared. 

 

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Wed, 06/29/2011 - 10:43 | 1411744 Urban Redneck
Urban Redneck's picture

I see no proof that the era of rampant spending in Washington D.C. is coming to an end, only talk from politicians, which is less than worthless.

 

Given the regulatory and litigation environment in the US- only government and big corporations (paying slave labor wages) will be able to create a meaningful number of worthless or counterproductive jobs for the foreseeable future. 

 

 

Wed, 06/29/2011 - 04:25 | 1410915 ebworthen
ebworthen's picture

 

People aren't just robbing phramacies because they are addicts but because they don't have insurance and their loved ones are DYING and in great PAIN.

COBRA cost for me and my two kids = $1,440 a month.  A MONTH.  Not per year, per month.  Insane.

We are a bunch of baboons.

Bling chain restaurants and 127 channels of charnel but if you want to get routine medical care you will go bankrupt.

Generations of good upbringing has been milked by malfeasant greedy sons of bitches and wenches from hell to destroy the society for MAMMON and MAMMON NOW.

Sold out, backstabbed, bled, lied to, misled, propagandized into poverty so the elites can eat high on the hog.

The balance is tipping and the party will be over soon due to GREED and LUST and the loss of holding humility, forebearance, and selflessness in esteem and instead taking advantage of the good to feed the bad.

The road to HELL.

 

Wed, 06/29/2011 - 07:13 | 1411055 fredquimby
fredquimby's picture

As in snake venom? I know old men use it, but kids??

Or as in Cobroxin for Arthritis??

If the latter, try some medical marijuana...

Along with this:

http://www.goodwebsite.co.uk/

I use their hemp mayonaise, hemp caesar salad dressing and hemp cooking oils.  All are seriously high in omegas (good for joints etc), they taste amazing and they deliver worldwide.

Cheers

 

 

 

 

Wed, 06/29/2011 - 07:12 | 1411051 Jendrzejczyk
Jendrzejczyk's picture

A good friend just travelled back home to Peru for an operation to remove a tumor from his jaw. Total cost including plane tickets= $5,000.

The quote from his doctor here in the US was over $30,000.

Wed, 06/29/2011 - 04:27 | 1410914 ebworthen
ebworthen's picture

 (see below)

Wed, 06/29/2011 - 02:39 | 1410865 unirealist
unirealist's picture

Who's going to make sure all the nuclear reactors go cold shutdown for months after the crash?

After the crash, who's going to keep circulating water over tens of thousands of tons of spent fuel rods, basically FOREVER?

The entire world is going to become uninhabitable if we don't do this right.

I think that means we have to pre-empt the crash.  Take our country back BEFORE the SHTF.

 

Wed, 06/29/2011 - 02:02 | 1410844 chump666
chump666's picture

Collapse.  Friend of mine is an air-hostess, doesn't really follow the financial markets.  But females have kick ass instincts.

Wed, 06/29/2011 - 01:37 | 1410824 Korg
Korg's picture

No recovery.....just decline until....

the next civil war...a few yrs from now....one state will quit the union (texas)? and then a lot more will join them. war follows. after a loose confederation of regional state blocs to preserve the North american integrity, but hostile to foreign powers.

Wed, 06/29/2011 - 01:22 | 1410815 Seasmoke
Seasmoke's picture

we may have hit the point in time, when some people believe being taken care of in jail is actually a better option then being left out on the streets

Wed, 06/29/2011 - 01:10 | 1410799 treasurefish
treasurefish's picture

Of course the politicians are at fault!  They created the FED the same year they created the IRS in 1913.  The IRS only exists to pay the interest that the US treasury borrows from the FED.  If they created it, they can surely end it too!!!

 

END THE FED!!!

(Who is the girl btw? She's kind of hot - in a pale, disturbing sort of way)

Wed, 06/29/2011 - 04:48 | 1410923 falak pema
falak pema's picture

she is the face of "resession"... I don't like this session at all!

Wed, 06/29/2011 - 00:47 | 1410783 PulauHantu29
PulauHantu29's picture

Lets see.....recovery....or...collapse...

For whom?

The Middle Class is already burdened with Bank Bailouts, Bank Bonuses....subsidizing deadbeat house owners who are nnot paying their mortgages, new car buyers, golf cart buyers, Obamacare, mage-pension plan payouts, and three wars.

So whom are you talking about? Recovery for the Middle Class? I'm all for it.

Wed, 06/29/2011 - 00:34 | 1410771 zorba THE GREEK
zorba THE GREEK's picture

 Yes Mark , it is curable, but the cure will probably kill us. Bernanke is an intelligent

 and educated man who has the best birdseye view of the economy of anyone in

 the USA. His trembling lip says it all. We are screwed. If you think the American

 people can weather the financial storm that's coming, you are the ultimate 

 optimist. I will take my cue from the trembling lip and make sure my firearms

 are loaded and ready for action.

Wed, 06/29/2011 - 00:24 | 1410755 Saxxon
Saxxon's picture

Correct the spelling!

Wed, 06/29/2011 - 04:37 | 1410920 falak pema
falak pema's picture

I have to scroll down here to see this! Wow! "resession" is true "regression"...Ilene, wherever you are...

Wed, 06/29/2011 - 00:21 | 1410747 anony
anony's picture

A recovery is not possible until industries are found that create jobs, or more appropriately, jobs that are created match the talents, experience, and learning abilities of those available that need work.

Under that circumstance--- which is the reality of where we are today--we will continue to muddle along year after year for a decade or longer.  In fact, given the Plutocratic society we live in globally, my prediction is that we will never, at least in the mature economies, ever grow again. 

There will be pockets of growth but as a nation, as a country that will grow to 400,000,000 people over the next 20 years, there will be many hundreds of millions who will have to either resign themselves to living on a dole of some kind, and drastically lower their expectations.  We have only begun to see ourselves living the europeans and the citizens of the U.K.

The biggest growth industry will be crime.  Coupled with the overcrowding now in our prisons, early release programs will multiply in essence turning criminals back out on to the streets to try and try again.  Given that our prisoners get first rate health care, a warm place to sleep, and all the food they can eat, it may prove to be a lifestyle choice for a goodly number of them who find life in our ever growing more mean streets just too damned dangerous.

 

 

Wed, 06/29/2011 - 00:17 | 1410746 DoChenRollingBearing
DoChenRollingBearing's picture

ZH-er Gordon_Gekko:

"All else will be left behind when the Gold Mothership takes off."

"Buy.Gold.Now." (that would be physical gold in your own possession).

Wed, 06/29/2011 - 00:05 | 1410730 Mark Noonan
Mark Noonan's picture

But, remember, it is all curable - if we, the people, will simply not stand for it any longer, change can be forced.  No, not without a fight.  In fact, get ready for the most intense, political struggle since the Civil War - but it can be done.  We still have all we ever had - it has just been choked off by Big Government and Big Corporation. Break the log jam and the native drive of the American people will overcome all obstacles.

Wed, 06/29/2011 - 00:59 | 1410795 dolly madison
dolly madison's picture

I believe it will be long and hard, but I think at the end of it things will be better.  I think good will win in the end.

Wed, 06/29/2011 - 05:26 | 1410940 Pondmaster
Pondmaster's picture

Disjointed article with more fear mongering - Ilene , you are no different than the Fed officials that scared our weak sister Congress and Senate into passing TARP . STOP THE FEAR MONGERING !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Wed, 06/29/2011 - 04:46 | 1410922 falak pema
falak pema's picture

I hope your love life is going there too...madison avenue is full of mad men!

Wed, 06/29/2011 - 00:51 | 1410784 NOTaREALmerican
NOTaREALmerican's picture

The native drive of the American people are the ones that have lived happily off of Big-Gov socialism for 60+ years.    Big-Mic, Big-Ag, Big-SocSec, Big-OldFartHealthCare, Big-Ed, Big-House, Big-AntiDrug, & Big-PoliceState all enthusiastically supported by the native "drive" of the American dumbasses.  Unfortunately, it looks like the dumbasses are about to be cut-off from their Big-SocSec and Big-OldFartHealthCare.   Well,  that's what happens when you don't have to pay attention to your government for 60+ years, your socialism turns into their crony-capitalism.      

Wed, 06/29/2011 - 01:50 | 1410834 OldPhart
OldPhart's picture

I'm not THAT big

Tue, 06/28/2011 - 22:34 | 1410586 beanieville
beanieville's picture

The bears have been saying economic collapse just about every year for the last 200 years.  Why the doom and gloom all the time?  

http://bit.ly/jCB9wC

Wed, 06/29/2011 - 01:31 | 1410822 10kby2k
10kby2k's picture

Beanie---Things are so dandy that you read zero hedge.

Wed, 06/29/2011 - 00:27 | 1410757 Freddie
Freddie's picture

Hope and Change but ZH is filled with O-bot arse *****ers.

Wed, 06/29/2011 - 20:50 | 1414116 Stares straight...
Stares straight ahead's picture

arse farriers?

they shoe the donkeys?

Wed, 06/29/2011 - 00:32 | 1410762 snowball777
snowball777's picture

arse hoosiers?

 

Tue, 06/28/2011 - 22:50 | 1410611 Urban Roman
Urban Roman's picture

http://www.youtube.com/watch?v=Nudp1vbaEYE

I don't think we are in Kansas any more, Dorothy.

Wed, 06/29/2011 - 01:39 | 1410828 TruthInSunshine
TruthInSunshine's picture

Checklist of 'Oh Shit' -

  • Near Record or Record Margin
  • Near Record or Record Leverage
  • An Unregulated and Private Derivatives Market With a Notional Value Approximated at 600 Trillion USD, Which Will Ultimately Necessitate More Bailouts of 'TBTF' Entities Under Threat of "Martial Law" & "Tanks in the Streets" When Certain, Special Entities Lose Their Wagers
  • Excessive Governmental Meddling That Distorts Supply/Demand Curve
  • Excessive Central Bankster Meddling Via Monetary Policy Distorting Supply/Demand Curve
  • Complete Lack of Transparency As To How, What, When & Where Central Banksters Are Doing Things
  • An Accumulated Debt Overhang Built Over 40 Years That Puts Interest Component On National Debt, Alone, At Several Multitudes of What The Entire National Debt Was Just 20 Years Prior
  • An Accumulated Debt Carried By the Federal Government So Large That Nearly 30 Cents of Every Dollar Borrowed by Federal Government in Form of Annual Deficit Spending Goes Toward Interest on the Debt
  • A Structural Change in Employment Base Whereby a True 20% of the Workforce (18 to 60 Year Olds - Not Disabled) Can Not Find Permanent Work
  • A Structural Change in Employment Base Whereby a True 30% of the Workforce Can Only Find Work that Puts Them In 'Working Poor' Status
  • A Structural Change in the Economy & Society Whereby a True 50% of the Population is Dependent on Direct Government Aid & Subsidization In Order to Meet the Basic Expenses of their Day-To-Day Subsistence
  • Having The 'Financial Services' Industry Constitute 40%+ of the U.S. Gross Domestic Product, While The 'Manufacturing' Sector Consitutes Roughly 16% (Exact Inverse of Where Things Stood in 1968)
  • The U.S. Government Spending 1.41 for Each Dollar of Revenue it Receives On An Annual Basis.
  • Having Property Taxes at the Local Level of Government Grow 480x Over In 80 Years in Real Dollar Terms
  • Having The Government Move From A Model Whereby It Is Able to Balance Its Budget Taking a Mere 6% of the Average Annual Income of Americans in 1913 to One Whereby It Is Running An Annual Deficit Equal to 16% of GDP and Has A Debt of 108% of GDP (It's Actually Much Higher Than That) While Taking Nearly 20% of Average American's Incomes (This Nearly 20% Doesn't Include Sales Tax, Property Taxes, Use Taxes, Permit or License Taxes/Fees, License or Registration Taxes/Fees, State Income Taxes, Death Taxes, Personal Property Taxes, or a Myriad of other Taxes).
  • Having 3 Segment of the National Annual Budget Consume 80% of Spending: Medicare, Social Security & Defense
  • Having a Congress, Executive & Judicial Branch of Government in 'Deep Capture,' That Works For the Best Interests of the Military-Industrial-Financial Complex, Always
  • Having Sacrosanct Provisions of the Constitution Gutted, Shredded & Vaporized So Completely That The Constitution Becomes A Mere Reference Point & "Sometimes Persuasive," Rather Than A Mandatory Roadmap

 

What have I missed?

I know that I missed a lot.

Wed, 06/29/2011 - 01:58 | 1410841 OldPhart
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