Economic Woes Are Mounting Across America

As politicians and policymakers in Washington struggle to control the damage from the housing crisis, the banks' credit crunch, $4 a gallon gasoline, rising food prices and mounting unemployment, McClatchy newspapers from North Carolina to California reported Sunday that the bad economic news is beginning to bite in their areas.

The Sacramento Bee reports that although the numbers say the economy is still growing, residents there are starting to tighten their belts. "I feel like I'm struggling," Sarah Joyal, a nurse who makes $100,000 a year, told the Bee. Farther south in California's Central Valley, the Modesto Bee reported that foreclosures are leaving more people there living in limbo.

In America's heartland, rising fuel costs are putting trucking firms in Kansas out of business, reports the Wichita Eagle, and more people are chasing fewer jobs at employment centers around Kansas City, according to The Kansas City Star.

Read the whole story here.

Comments

[sf101]

But despite all this, there is no recession. Should we close our eyes and click our heels three times. And maybe it will all just go away. Just like McCain?

[Erdgeist]

This country's economic woes could be solved easily but there is a mindset in our universities, corporations, and the government that protective and revenue tariffs (which would free most workers from the Income Tax) are evil and free-trade is good. Yet, if you go back and study David Ricardo's theory it is largely bunk. Nor is there historical evidence that nations rose to great economic wealth by free-trade. The United States became wealthy via the protective tariff and the revenue tariff--not free-trade.

Again, free-trade is bunk--it is win/lose and we lost. It is also paradoxical. As the great economic historian Paul Bairoch noted, if economic growth, in terms of goods and services available for domestic consumption, could be obtained at home what then is the benefit of free trade? The whole point of an economy is self-sufficiency and economic stability, and where there is a surplus generated--one may trade it. On the other hand, it is hare brained to defend free-trade if a nation becomes, as a result, dependent, unemployed, in debt, and over taxed.

[Sundialsvc4]

When the Federal Government started "borrowing from itself" more than $1 million a minute(!), 24/7/365, some folks may have felt that they'd just discovered a "resource" that would make King Midas blush with envy.

But they don't even hold a candle to, say, the Kingdom of Zimbabwe. You know, when THOSE folks spin "a hundred billion dollars" out-of-thin-air, at least they give you a nice bank-note to show for it. When the United States of America does exactly(!!) the same thing, they don't even give you anything to wip... to do anything else with that you might desire to use a small square piece of paper for.

Are there "downstream consequences?" You bet there are! Your "$100,000 a year salary" is exactly equivalent to what the Fed can "borrow" in slightly less than six seconds. You've just wasted an entire year working at a job you don't like when the Fed can .. and DID .. wave its magic-wand and make twenty times that amount of money "materialize" in the amount of time it took you to read this post.

[outnow]

The ascendancy of finance in national efforts is no accident. Elements of the U.S. government decided back in the late1980's that finance, not manufacturing or even high technology, had to be the sector on which Washington would place its economic chips. And so, Reagan supply-side economics begat the Clinton Rubininomics years with both presidents deferring to the bond markets and deregulating the financial system. Credit has been used less to finance virtuous commercial activity and more to make bets on financial outcomes, i.e., to speculate. The CPI is not an accurate indication of inflation. But the collapse of the system of global finance is much more profound and fundamental. The hostile takeover of government was made possible by evangelicalism, according to Kevin Phillips in his new book Reckless Finance, Failed Politics and the Global Crisis of American Capitalism. He should know as a former Republican strategist. First the Southern Strategy and then the evangelical religious right, neither of which had anything to do with the debt-based system, ironically, but everything to do with political power for the financiers.

[Enid]

If one read the founding father.
They state The labor of men shall not be taxed.

check your pay stubs on that one.

Business and corporations are to be taxed.
When buying wholesale we destroy retail.

[olephart]

In the past, two factors were employed to combat economic downturns, increased Government spending and lower interest rates. In this instance, the lowering of interest rates had the perverse effect of lowering the value of the dollar and raising commodity prices. The increase in commodity prices had a dampening effect on the economy thus yielding an inverse of the desired result. Further, since the problem was not high interest rates but rather a weakened financial system due to lax regulation and the resultant fraud, the banks were not able or willing to make loans at reduced rates. Therefore no stimulus was obtained.

The Government has been in a deficit spending mode since the beginning of the current Administration. Indeed Government debt has been the only real economic product produced. The "stimulus" program only added to the debt and did not yield any substantive results. Tragically, for all the debt acquired the Nation has nothing tangible to show for it, no roads, bridges, alternate energy sources,

[olephart]

Finally, as bad as things seem, the official statistics are intentionally calculated to understate the magnitude of the problems. Many of the unemployed are not counted. The algorithms for inflation use unrealistic assumptions. The GDP uses fictional imputed income and its price deflator uses the flawed inflation assumptions. A reality based set of statistics would read:

Unemployment: 14%
Inflation: 14%
Previous 12 months GDP: -2.5%
Annualized Federal Deficit less Social Security: $900 billion

We're in deep do do.

[Rule Of Law]

Ole, and we still don't get the real picture in the MSM--corporate street walkers that they are.

I've been researching how wars happen. And, as you might guess, the main instigator in every modern conflict--from our Revolution to the current Iraqi invasion--has been the Banks. Banks live off of debt. After the FED was created in 1913, we were lured into a war with Germany that even FDR in later years said, could be traced directly to the Banks and their need for the government (read, the People) to rack up as much debt as possible to feed this new central banking monster. And the creation of the income tax to pay for those debts was the unconstitutional icing on the cake that they had been after since 1776!

Those numbers the press gives us are created and then massaged by the Financial industry to their advantage, not ours. And, as you say, Bush has had us in deficit spending mode since day one and the war was his gift to his benefactors to keep the debt gravy train rolling. Eliminate the FED. Break up the banks. Regulate Wall Street and put an end to their pari-mutuel finance scams. Return the coining and control of our currency to the People and end this debt spiral.

[wpiv926]

And all the rethugs can say is, don't worry - be happy!!!

[totaldisbelief]

are you saying that the Government is Lying to us???

[dadw5boys]

Everytime you have made the extra purchase you dug the economic hole a little deeper.

Everytime you refused to have the old car repaired and traded you added a shove fill to your own grave.

Everytime you voted for those who would deregulate and let go the dogs of you had a shove in your hand.

Thanks!!!

[thegreatgiginthesky]

1. What happens if you need something and have to spend a little extra?

2. What happens when the cost to repair your old car is greater than what it will cost you to get a new car?

[sandiegoconservative]

Then you are to FORGO the need and you are required to WALK. The great liberals demand it!

[Boboday555]

Isn't everyone happy we put a guy in the White House that we'd all be comfortable sitting down and having a beer with?

[thegreatgiginthesky]

I'd rather have a beer with a rabid racoon.

[barkingcat]

After the boob-osity of this current administration, I can't afford beer anymore...

[totaldisbelief]

I wish I had the opportunity to piss in his beer.

[MajorKong]

That $2 trillion we spent on the Iraq war might have come in handy right about now.

[thegreatgiginthesky]

How about the hundreds of billions we've paid to the factions in Iraq to play nice with one another so B u s h could claim that his surge was a success?

[openhand]

the big loss is in opportunity, spearheading a green tech industry turning the U.S. into an exporter. doesnt help the bush OILYgarchy.

[Triangle1]

At least Obama has a far-reaching depth of economic experience that dates back many years to pull from. I'm sure Michelle Obama let him run the family finances. We have nothing to worry about.

On second thought, maybe he should hire Suze Orman as his VP pick.

[hellinabucket]

Yea Suze! She could at least be Fed Chair, director of the Economy or something! I just love her!

[machivellianX]

If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their
children will wake up homeless on the continent their fathers conquered. ~Thomas Jefferson

[thegreatgiginthesky]

Jefferson saw the evil that is F r i e d m a n style economics before the little runt was even born. But then again, Jefferson like all the founding fathers cared about the nation and not his bank account.

[watchTVgetSTUPID]

The gov falsified the unemployment rate by claiming many unemployed were no longer interested in working. They jacked the numbers so bad, the official National labor pool was shrinking even while the population was increasing.

Right .... those unemployed who could not find new jobs decided they did not need money to eat, and for shelter.

[RTIII]

Yes, but that's been the policy for over a decade, IIRC.

It's absolutely true - the REAL unemployment numbers are easily over double the stated rate, and I'd estimate more like triple; they ONLY count people actively taking unemployment, and that number is far less also because UE doesn't pay for very long any more - presuming you had a job whose loss would even qualify you for it.
.

[watchTVgetSTUPID]

The true cost of living increase is much larger than the gov admits. It is wrecking havoc on millions of low to moderate income people who are getting behind on bills.

[RTIII]

This is also true. The Rs mandated that the stats would not include some vitals ... IIRC, fuel is not factored in, for example! I haven't the time at the moment to provide the URLs but the research is easily done...
.

[heal57]

The economy is NOT growing and that's why the repubs will finally be out of national office. This is going to be a rough time for a lot of Americans. Our government has truly 'walked on our faces with cleats'. We must send a message in November.

[machivellianX]

Yeah, and the Dems in congress used ice skates. Pull your head out of your arse.

[Boboday555]

The Dems in Congress have tried to help the American people time and time again but the filthy republican in congress have staged about 70 filibusters since the 2006 mid-terms!
That is a record by the way.
So even when the American People have told the filth in the GOP, in no uncertain terms, that they have no more confidence in their skill to govern, the neo-con children in congress still grind legislation to a halt.
The GOP filibustering on Capital hill; the childhood equivalent of holding your breath!

[heal57]

The message is Obama; we'll see what he can do within a few years. I am an Independent and have little use for the democrats either, they are all in bed with the corporations...but the repubs are worse for the country. Most of us behave as sheep and are never outraged enough. Two term limits for all senators needs to happen. Twelve years is long enough for anyone in public office. Let them do something else [and not lobbying].

[dolphy]

Seriously though, I heard that the Feds will be printing 1to 1.5 trillion dollars to bail out the banks. We have to be ready to buy any precious metal or stable currency (do we have a stable currency?) in the near future. Maybe buy a gun too?

[MetalCanuck]

Soon you willl be using those dollars to buy bread. This is how it started in Zimbabwe.

[wpiv926]

I'm starting the long process of becoming a permanent resident of Canada. Currently, the USD is worth slightly more than the Canadian dollar. I sure hope that holds for another year or two.

[RTIII]

I'm putting money in the EURO. It _was_ equal to the dollar just a couple of years ago, but now the dollar is worth only about 0.6 Euro. That's a FORTY PERCENT DROP, folks.
.

[biwee]

Remember ammunition, and veggie seeds for your coming back yard garden.