Guest Post: How The U.S. Will Become A 3rd World Country (Part 1)

Tyler Durden's picture

Submitted by Ron Hera of Hera Research

How The U.S. Will Become A 3rd World Country (Part 1)

The United States is increasingly similar to a 3rd world county in several ways and is accelerating towards 3rd world status. Economic data indicate a harsh reality that obviates mainstream political debate. The evidence suggests that, without fundamental reforms, the U.S. will become a post industrial neo-3rd-world country by 2032.

Fundamental characteristics that define a 3rd world country include high unemployment, lack of economic opportunity, low wages, widespread poverty, extreme concentration of wealth, unsustainable government debt, control of the government by international banks and multinational corporations, weak rule of law and counterproductive government policies. All of these characteristics are evident in the U.S. today.

Other factors include poor public health, nutrition and education, as well as lack of infrastructure. Public health and nutrition in the U.S., while below European standards, stand well above those of 3rd world countries. American public education now ranks behind poorer countries, like Estonia, but remains superior to that of 3rd world countries. While crumbling infrastructure can be seen in cities across America, the vast infrastructure of the United States cannot be compared to a 3rd world country. However, all of these factors will rapidly deteriorate in a declining economy.

Unemployment and Lack of Economic Opportunity

Unemployment, which is a deep, structural problem in the U.S., is a fundamental challenge to economic opportunity. The U.S. labor market is in a long-term downward trend linked to globalization, i.e., offshoring of manufacturing, outsourcing of jobs and deindustrialization.

The U.S. workforce has declined by approximately 6.5% since its year 2000 peak to roughly 58.2% of working age adults and the U.S. now suffers chronic unemployment of 9.1%. Although the workforce grew in the 1980s and 1990s, as dual income families became the norm, the size of the workforce is shrinking due to a lack of economic opportunity.

Officially, long-term unemployment is 16.5% and the ranks of the long-term unemployed (those jobless for 27 weeks and over) include 5.9 million, 42.4% of those unemployed. However, prior to the Clinton administration, unemployment measures included workers who are now no longer counted as part of the workforce. Using the more accurate pre-Clinton criteria, unemployment exceeds 22%, only 3% below the worst point (24.9%) of the Great Depression. For countries with populations greater than 2 million, Macedonia leads the world with 33.8% unemployment, followed by Armenia at 28.6%, Algeria at 27.3% and the West Bank and the Gaza Strip both at 25.7%.

Compounding the unemployment problem is the fact that an entire generation of young Americans is being left behind in terms of economic opportunity. Student loans exceed $1 trillion while the labor force participation rate for those aged 16 to 29 who are working or looking for work fell to 48.8% in 2011, the lowest level ever recorded. Lack of economic opportunity among the youth, including millions of unemployed college graduates, is a political wildcard reminiscent of countries like Tunisia.

The structural decline of the U.S. labor market will continue as American workers are merged into a global labor pool in which they cannot yet directly compete for jobs with workers in countries like China and India. In China, for example, gross pay, in terms of purchasing power parity, is equivalent to approximately $514 per month, 57% below the U.S. poverty line. According to the Economic Policy Institute, the U.S. trade deficit with China alone caused a loss of 2.8 million U.S. jobs since 2001.

Falling Real Wages and Household Incomes

Workers earning more dollars are actually poorer in terms of purchasing power when the cost of living rises faster than wages,. In fact, if household income is adjusted for inflation, most American families have grown significantly poorer over the past ten years. In 2010, for example, real median household income fell 2.3%. Although the average wage has risen steadily in nominal terms, dwindling purchasing power is a reality for most Americans. When adjusted for inflation, the wages of most Americans have not kept up with the Consumer Price Index (CPI).

According to famed economist Milton Friedman, “inflation is always and everywhere a monetary phenomenon.” In other words, prices rise when the money supply is increased faster than population or sustainable economic activity. Apparent economic growth created through credit expansion, i.e., by increasing the money supply, has a temporary stimulative effect but also causes prices to rise. True Money Supply is an accurate measure of inflation.

Although CPI is sufficient to illustrate declining real wages, CPI does not measure the cost of living in a realistic way. According to economist John Williams of Shadow Government Statistics, CPI systematically understates inflation.

The decline in real household income has set Americans back to 1996 levels, despite many households now having two incomes rather than one. Dual income families accounted for much of the increase in real median household income during the 1980s and 1990s, but, today, two incomes are barely better than one income was three decades ago. The decline in real wages was obfuscated in the 1980s and 1990s by growth in the workforce, e.g., by women entering the workforce. Real median household income rose while real wages declined because more households had two incomes.

As U.S. wages and household income continue to fall in real terms, both poverty and reliance on government assistance programs will continue to rise.

Growing Poverty

According to the U.S. Census Bureau, the poverty rate in the United States rose to 15.7% in 2011, with 47.8 million Americans living in poverty (1 in 6). The official poverty line, determined by the U.S. Department of Health and Human Services, is $22,314 for a family of four. The number of families living in poverty has risen sharply since 2006 and continues to climb.

The U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP), commonly known as “food stamps,” serves 45.8 million households as of May 2011. The program now feeds 1 in 8 Americans and nearly 1 in 4 children. 

Based on the outlook for employment and wages, both poverty and reliance on government assistance programs will continue to grow. However, the negative trends in employment, wages and poverty have not affected all Americans equally. In fact, the household income and wealth ofthe wealthiest Americans has increased sharply, despite the overall deterioration of the U.S. economy.

Increasing Concentration of Wealth

Alan Greenspan, former Chairman of the Federal Reserve, warned that, “Ultimately, we are interested in the question of relative standards of living and … trends in the distribution of wealth, which, more fundamentally than earnings or income, represents a measure of the ability of households to consume.” In other words, concentration of wealth undermines the consumer base of the economy, causing GDP to decline and resulting in unemployment, which reduces living standards. Obviously, the total wealth of society is reduced when wealth is highly concentrated because there is a lower overall level of economic activity. Economic data from several sources, including the Congressional Budget Office (CBO), show that wealth and income in the United States have become increasingly concentrated with the wealthiest 1% of Americans owning 38.2% of stock market assets, e.g., shares of businesses.

For the wealthiest 1% of Americans, household income tripled between 1979 and 2007 and has continued to increase while household wealth in the United States has fallen by $7.7 trillion. The Gini Coefficient illustrates the growing disparity in income distribution.

In terms of the Gini Coefficient, the United States is now at parity with China and will soon overtake Mexico, a still developing country. It should be noted, of course, that the U.S. remains a far wealthier country overall. If the current trend continues, however, the U.S. will resemble a 3rd world country, in terms of the disparity in income distribution, in approximately two decades, i.e., by 2032.

Welcome to the 3rd World

The United States is quickly becoming a post industrial neo-3rd-world country. Partly as a consequence of worsening unemployment and lack of economic opportunity, falling real wages and household incomes, growing poverty and increasing concentration of wealth, the U.S. government faces a historic fiscal crisis. Dominant corporate influence over the U.S. government, particularly by large banks, weakening rule of law at the federal level and destructive tax policies are compounding the economic problems facing the United States. Barring fundamental reforms or a hyperinflationary collapse of the U.S. dollar (due to the fiscal problems of the U.S. government), the deterioration of the U.S. economy will continue and accelerate. As the U.S. economy continues its decline, public health, nutrition and education, as well as the country’s infrastructure, will visibly deteriorate and the 3rd world status of the United States will become apparent.

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dlmaniac's picture

Skip the charts and just ask yourself this: How could uncle Sam NOT spend self into a third world nation when he fails to make ends meet for how many years already?

 

JLee2027's picture

Socialism always destroys.

We will quickly return to unleashed capitalism once the Currency is backed by Gold/Silver and Debts are forgiven.

longonSpam's picture

Inverse Weimar.. that'll be interesting especially with nukes.

Leraconteur's picture

The Soviet Union broke up and the rest of the world made sure that their 6,000 nukes didn't go missing, so expect the rest of the world to step up and make sure USA nukes are kept secure, once the USA goes tango-uniform.

Mr. Mandelbrot's picture

Whatever . . .

 

 

Declassified Russian sources[which?] indicate that the smallest Soviet miniaturized nuclear weapon was also small in dimensions, and its size was compared to a "small refrigerator."[citation needed] Following the breakup of the Soviet Union, these were the type of devices[original research?] that Soviet General Alexander Lebed claimed had been issued to the GRU and then subsequently lost. Lebed, who worked with Russian President Boris Yeltsin, presented to the U.S. Congress the idea that suitcase bombs had been created by the Soviets and that 132 KGB-produced devices could not be accounted for.

http://en.wikipedia.org/wiki/Suitcase_nuke

 


trav7777's picture

again, the US's demographics numbers are being distorted by undesirable minorities.  If you subtract them out, the stats put us at the top of the 1st world.

3rd world nations aren't 3rd world because of all of these symptoms, they are because of the people who live there.  You cannot just build a bunch of roads and redistribute a bunch of money and presto, be Norway.  Unless you have people with attributes on par with an average Norweigian, you won't have anything like Norway.

chumbawamba's picture

You basically need to shut your nigger trap already.  That  schtick is old.  Nigger is as nigger does.

-Chumblez.

Are you kidding's picture

Screw you...let the man talk...it's refreshing to hear other opinions that are BANNED in "public".  They're just words...why be afraid of them?

We ALL know the truth...why don't we admit it?

Ghordius's picture

ah, something positive from you! thanks!

you are not sick or something...? 8-/

knowless's picture

it's just that trav has been a proponent of eugenics on this board for what is most likely years at this point, so telling him to shut the fuck up won't change anything anyway, he'll just keep at it.

 

when public disorder finally reaches the US there will be death squads roaming the cities, each with their own agenda, that's why words can scare people.

Are you kidding's picture

There are death squads already roaming the inner cities...gangs.

LFMayor's picture

Now you're going to get junked all over, speaking against the PC mantras like that. (I love it!)  You can't just drop empirical evidence, facts, and math onto the general population like that Travis, it makes them feel... bad.  And we can't have anyone feeling bad, in this era where we don't even keep score at kids sports events anymore.

Let it crash.  Then all the PC crutch users will go to the fires and the stewpots after all the anti-Darwinian safeties are removed.  The situation will begin the long march back. 

Did anyone think about a simple thing like food in the writing of this article?  If the US goes tits up in the water, exactly who in the hell is going to feed all the surplus populations around the world?

Max Fischer's picture

 

 

<BOOT STOMP, ARM STRETCHED>

WHITE POWER!!

LFMayor's picture

Max, you gonna hunt me down all over the interwebs now, no matter what rock I creep beneath?   I'm not the last blasphemer of your dear Ivory Towers.

you're falling into the same old cliche...  if you lose the argument, then deride the opponent as a (shudder) Nazi.

You will recall from your in depth university studies in history that the Nazis made the socialist intellectuals some of the first plank owners of the death camps.  They got sent in to fell the trees, set the fence posts and string the wires.

or didn't they teach you that in your Womyn's studies curriculae?

Max Fischer's picture

 

 

It's difficult to fathom all the miserable pigs that walk this land. 

Max Fischer, Civis Mundi

Are you kidding's picture

Black ones, brown ones...yup, there ARE a lot of them!

Max Fischer's picture

 

 

WOW!  This place is INFILTRATED with PIGS!  

All the worms crawl out of the dirt when the cross gets lit.

Max Fischer, Civis Mundi

vato poco's picture

Then *LEAVE*, you pussy. Your increasingly-more-strident attempts to squelch unauthorized speech/thoughts are growing tiresome. Besides, you're running out of options in your tired little playbook. You've already squealed "nazi"; you just whined "KKK"; your sorry little attempts at long-distance psychoanalysis failed miserably - you're running out of snowballs to throw like a girl, bitch.

Cathartes Aura's picture

you've made a strong, well-reasoned argument. . . only three insults based in misogyny - no homo bro!!

(you think you're rad, but you're a tiny tool in the big toolbox boy)

Thunder_Downunder's picture

haha!

Nice imagery!

 

Zig Hail!

i-dog's picture

If you removed the swarthy minorities from the US (not just from the statistics) then you'd have zero production-line manufacturing and no small crop harvesting - plus the military and police would be full of unionised Haaavaaad graduates pulling in 6-figure salaries. Great economy!

LFMayor's picture

dumbass, you'd be picking lima beans after two days of a good hungry and be glad for it.   When the wages rise to where you can actually make a living on them, then you'll have all the applicants you need.  Right now, those beans are getting picked sub minimum wage because your taxes and my taxes are subsidizing those migrant pickers basic necessites, like medical, food and housing.

tmosley's picture

And when the wages on food, and thus the price of food rises, what do you think happens to the standard of living?

Oh yeah, didn't think that one through.  Just like Travvy boy up there.

Are you kidding's picture

Sure we would...KIDS could pick the crops like they did years ago.  Hire high school kids to do it.  But NO...our kids won't do it, too spoiled by mommy and daddy who spoil them because they're guilty that they have to work all the time to pay for mommy and daddies expensive toys.

Andy_Jackson_Jihad's picture

A sad realization I have come to as well.  Whenever debates of socialism, the laffer curve and twatnot come up, the homegeneity and racial makeup of the population seem to be the best indicator of success.

Makese sense if you consider socialism to be an extreme form of insurance, the dangers of which are moral hazard.  Who are you more likely to cheat?  A bunch of people just like yourself or a system of "others"? 

Cathartes Aura's picture

I understand your premise, but I wonder. . . "a bunch of people just like" myself, meaning "white"?  because the white brotherhood here are NOTHING like myself, nor do I desire to know or be around them - I think there are sub-groups of like-minded people that don't depend on superficial appearance, "race" assignment, etc. - I like to think it's a VALUES judgment, combined with a dose of self-respect & anger management.

Divide & Rule, dudes.

http://en.wikipedia.org/wiki/Divide_and_rule

Mr. Mandelbrot's picture

What the hell does this have to do with my comment?

tmosley's picture

Cut out the "undesirables" from the other nations to, you fucking idiot.

Did you even go to college?  You certainly never took a fucking stats class.  You're just some dumbshit that scored high on an internet IQ test who thinks that entitles him to ignore any facet of reality that clashes with any thought that pops into his little head.

Random_Robert's picture

All of you junking Travis need a little introspection.

You fear his words for what they represent to YOU, not for what they represent in TRUTH.

Trav is right- Norway is successful because they SHARE their productivity with each other, and they share because no one external to them ever COMPELLED them to share against their will. In other words, they are a socially well adjusted people.

The message Trav spouts loses it's punch when the stigma of skin color gets thrown into the mix (his bad, because millions of people of color have proven themselves to be worthwhile and self-valuable members of the human community, and an equal number of white people sit in trailer parks smoking meth and demonstrating no more self worth than the average inner city black criminal - this fact negates the premise that skin color has anything to do with self worth).

but aside from that, facts are facts...

If the elitist mentality could actually develop a creative way to LEARN what makes Norway Norway, and to bring that synergy and apply it into areas of alternative skin color and demonstrate some degree of success, then Trav's white-pride argument would fall flat on its face, right?

So why don't all of you "diversity champions" out there go throw your energy at that endeavor, instead of junking Trav for making the valid, truthful, and irrefutable statement that Norway is NOT a diverse nation demographically, and that Norwegian style social success has failed every time it has been tried in racially integrated societies...?

Inconvenient truths are truths, nonetheless.

Invest your energy in creating the new truth that racial and social harmony ARE INDEED possible without oppressive legislation, because it is clear that the forced legislation of a contrived morality is doing nothing more than igniting people's more basic, tribal instincts, and if that sentiment is taken to the extreme in the US, then unfortunately, people of color will end up at the bottom of the totem pole once again, suffereing a major setback from all the progress this country was achieving before the Pelosi/Clinton/Boxer/Obama/Reid idiocracy came along and began diseasing our collective perceptions toward each other.

Quite fearing the words and the labels, and get to work on what it would take to prove the point that you want to prove,

otherwise, you're part of the problem... and you can fuck the hell off.

 

 

 

thorgodofthunder's picture

Norway is Norway because of this:

http://en.wikipedia.org/wiki/The_Government_Pension_Fund_of_Norway

 

This Trav character is a disgusting, ignorant racist and deserves to be banned from this site in my wealthy, elitist, minority, opinion.

Random_Robert's picture

So what's your point?

Norway's economy produces more than it consumes, and the excess generates savings that are returned to the people... Yeah, that really sounds like a marginal economic model. Maybe Norway needs to get with the program and generate a couple hundred times its GDP worth of trade deficits and sovereign debt, like all the ret of the genius countries in the western world...?

oh, and Trav deserves to be banned from ZH because he knows, understands, and chooses to exercise his first amendment rights...? This statement makes you part of the problem... please refer to my recommendation above for people who are part of the problem.

thorgodofthunder's picture

My point is Norway is lucky to have immense natural resources that it can export and generate wealth from.

I could care less that you think speaking out against racism is a problem.  Hopefully your poison tongue will as well be cut off for inciting hatred.

Random_Robert's picture

Yeah, well, the exportation of raw materials as a wealth generator is (and always will be) a long term failure.

If you re-read my posts (correctly) you will see that no where do I espouse racism. I only yield to REALITY. I never said speaking out against racism is a problem- my problem was with you deciding that someone should be CENSORED based on their point of view. Given that fact, I could declare you a Nazi- but I won't.

And as for inciting hatred... the only people I feel disdain for are those who fail to trust the power of their own perceptions, and choose to willfully embrace cognitive dissonance as a normal component of the human condition. 

Hate is a fucked up emotion. Voluntary preference for other people based on arbitrary bullshit like the color of their skin or the shape of their eyes is even MORE fucked up.  

But wanting to censor someone or deny them of their viewpoint is the most fucked up of all- hateful people should be allowed to expose their venom so that exposure to it will inspire people to choose not to be like that. 

Reality sucks really bad; but it doesn't have to suck at all. Unfortunately people would rather live in a shitty predicament, waiting for Superman, rather than realizing that THEY are the only Superman that really gives a shit about them.

Fuck everyone else; including the racists- take care of those you love: including yourself.

 

 

 

dizzyfingers's picture

"the rest of the world made sure that their 6,000 nukes didn't go missing"

Data please?

Sudden Debt's picture

It's not the socialisme problem. It's the lack of.

If you look to the 50's the workforce participation was a lot lower. In every family 1 could stay home and take care of the kids. the man made enough money for the entire family.

Wages don't rise enough. WE NEED TO WORK WITH MAN AND WIFE TO GET THROUGH!

And yet we automized so many jobs...

We need to rethink the 8 hour working days.

We need to rethink the 5 day workweek.

We can produce a heck of a lot more than we need. So why do we need so many workforces? So many workinghours?

Cut the workweek with 1/5 and keep the wages, and you'll lower unemployment with 10%.

Why do we need to increase productivity while our technology grows every year, our workforces becomes to great...?

 

Transformer's picture

JLee

You might want to look up the word Fascism.  Then, if you get interested, read about socialsm, communism, capitalism, democracy, etc.  Then you'll be able to comment with sounding stupid.

Ahmeexnal's picture

Sudden debt:

Back in the 50s a family had ONE car, ONE TV set, ONE phone.
These items lasted years in the family (some weren't replaced until they stopped functioning, and even then repair shops were quite usual and employed skilled technicians).
Now, a typical sheeple family has to work more because they have to pay for ONE car PER PERSON, ONE TV set WITH CABLE TV PER PERSON, ONE cellphone PER PERSON, ONE computer PER PERSON. And they buy the whole cycle as soon as new models comes out. Add game consoles, iGadgets, drug habit, medical costs, shrink, etc...

The tech automation upward spiral means a human downward spiral.

vato poco's picture

Yep. I've read that a standard-issue house in the 50's was 1000-1200 sq. ft. (Have read that was pretty much the available range in Levittown.) For a family of 4-8. Nowdays most childless couples would classify anything less than 2000 sq ft as tiny. I'm not so sure about 'tech automation upwards = human downwards spiral', but I *am* sure that a luxury once sampled becomes a necessity. And they don't give that shit away for free.

dizzyfingers's picture

Not exactly. It's the bowing to expectations that everyone's going to have everything all the time that's killing us.

vato poco's picture

That's Life In The Fast Lane, baby.

Syrin's picture

AND, if a family has only one car, one TV, one DVR and one cell phone, they are considered poor, join an occucrap movement and demand that the 49% who actually contributr to society pay more.

economics1996's picture

In the 50s the federal, state, and local GDP consumption was 26%, today 45%.  Opps there it is!

pan-the-ist's picture

Sudden debt hit the nail on the head.  There simply aren't enough useful things to do to provide work for everyone, that's why we have a consumption enonemy - we consume useless shit.  Lowering costs to maximise profits have succeeded in (locally) ruining the consumer base, and the world economy is finding a new equalibrium.  Once it is cheaper to automate all production, the race to the bottom in wages, first moving jobs to the uneducated south, then out of the country - paying a human to do anything will be cost prohibitive (this will likley never happen, as we see in "Reality" there are other factors at work that will cause destabilization in other structures (war, for example.)

Are you kidding's picture

Things are fucked up because we have an entire class of people who sit home and collect taxpayer money...while at the same time...we import illegals to do the work the others SHOULD be doing!  A quarter of the population lives for free on our dime.  A quarter of the population is useless.

Cathartes Aura's picture

"A quarter of the population is useless"

almost verbatim, you left off "eaters". . .

SteveNYC's picture

You want to see millions of people doing mostly useless activities? Welcome to New York City!