The U.S. economy can't recover from the structural unemployment that began a generation ago without making major changes to the policies that drove our economy into a ditch.
In 2006, our nation's annual GDP stopped growing but no one in either party will face up to it. Simply stated, the GDP, when adjusted for inflation, has been stuck at between $13 and 14 trillion for six years!
The columns below display annual GDP totals in current dollars and the same value with inflation subtracted. The "BEA", (The Bureau of Economic Analysis) under the U.S. Dept. of Commerce used 2005 as the base year to begin their inflation calculations, so for that year, the current dollars and the adjusted dollars are the same.
GDP totals can be read as follows: Twelve Trillion, Six Hundred and Twenty Three Billion Dollars.
Year: Current GDP Adjusted GDP
2005: 12,623.0 12,623.0
2006: 13,377.2 12,958.5
2007: 14,028.7 13,206.4
2008: 14,291.5 13,161.9
2009: 13,973.7 12,757.9
2010: 14,498.9 13,063.0
2011: 15,075.7 13,299.1
2012: 15,811.0 13,652.5 (third quarter)
If we look at the annual GDP in terms of "current" dollars, (before it's adjusted for inflation), the economy appears to have grown to $15.8 trillion but the growth was a mirage. The increase was actually inflation! Look at the 2006 current GDP and compare it to the 2012 adjusted GDP. The reality is sobering.
If the economy had stayed on the long-term growth trends that were established prior to 2006, our GDP would have totaled over $20 trillion annually by the end of 2012. So obviously, something has gone terribly wrong in America and no one is willing to fix it, probably because those at fault refuse to admit culpability while those who game the system continue to rationalize it.
For too long, the blind guides of failed economic theory who populate much of academia, private think tanks and government have promoted the absurd idea that America could prosper as a service and information economy while multinational companies built factories anywhere they can find cheap labor.
Today, American trade policy allows almost any country to export their unemployment to the United States with impunity. America's trade policy has removed millions of living wage jobs from our country and created millions of low wage jobs in poor countries where labor can be exploited.
We have systematically structured unemployment into the American economy and we are paying the price. All the while, Congress pretends to deal with the economy by debating tax cuts for the rich. This is ridiculous at a time when poverty is increasing and the middle class is deteriorating.
All the while, Former President Clinton says everything will work out just fine in the long run as the world learns to make everything faster, cheaper and better, but Clinton's optimistic forecast does not address the allocation of rewards for additional worker productivity. It seems that America's high unemployment and flat GDP are exposing serious flaws in his argument.
Earlier this year, the Congress crunched numbers under the assumption that 46.2 million Americans currently live in poverty but new numbers released last month by the Census Bureau peg the poverty number at almost 50 million. Worse, 20 percent of all American children are living in poverty.
If unrestrained economic globalism is the key to worldwide prosperity, we need to find the lock before it's too late.