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In December, there were 929,000 "discouraged" workers who are not counted as part of the labor force because they have "given up" looking for work. That is the most since the U.S. government first started keeping track of discouraged workers in 1949. Unprecedented numbers of Americans have simply given up and are now chronically unemployed. Some areas of the U.S. have already entered another Great Depression. The mayor of Detroit estimates that the real unemployment rate in his city is now somewhere around 50 percent.
Who won World War II, anyway? One would never know by comparing modern day Hiroshima to modern day Detroit. Much of Detroit appears to be a war zone, while Hiroshima is a bright, beautiful, bustling city where most everyone has a good job that pays significantly more than is received by their American counterparts, especially in Detroit. http://www.freerepublic.com/focus/chat/2349112/posts
For decades, our leaders in Washington pushed us towards "a global economy" and told us it would be good for us. Problem is, workers in the U.S. must now compete with workers all over the world, and our profit seeking and completely unbound corporations are free to pursue the cheapest labor anywhere on the globe. Millions of jobs have already been shipped out of the United States, and Princeton University economist Alan S. Blinder estimates that 22% to 29% of all current U.S. jobs will be "offshorable" within two decades.. The days when blue collar workers could live the American Dream are gone and they are not coming back.
During the 2001 recession, the U.S. economy lost 2% of its jobs and it took four years to get them back. This time around, the U.S. economy has lost more than 5% of its jobs and there is no sign that these jobs are ever coming back. Why is this? Answer: The migration of American jobs overseas is not going to stop any time soon.
All of this unemployment is putting severe stress on state unemployment funds. At this point, 25 state unemployment insurance funds have gone broke and the Department of Labor estimates that 15 more state unemployment funds will likely go broke within two years and will need massive loans from the federal government just to keep going.
Almost 40 million Americans now receive food stamps, and the program is expanding at a pace of about 20,000 people a day. One in eight Americans now depends on food stamps, including one in four children. www.nytimes.com/2010/01/03/us/03foodstamps.html A significant part of the United States of America is beginning to turn into a kind of underdeveloped third-world country.The number of Americans who are going broke is staggering. Almost one and a half million Americans filed for personal bankruptcy in 2009 -- a 32% increase in one year:
The decline of the dollar as global reserve currency
For decades, the fact that the U.S. dollar was the reserve currency of the world gave the U.S. financial system an unusual degree of stability. But all of that is changing. Foreign countries are increasingly turning away from the dollar to other currencies. For example, Russia's central bank announced on Wednesday that it had started buying Canadian dollars in a bid to diversify its foreign exchange reserves.
Then too, the leaders of Brazil, Russia, India and China met recently to discuss the possibility of replacing the dollar as the world's reserve currency. The problem is, such a replacement could very well result in a complete collapse of the US dollar versus virtually all other currencies. While US multinationals might rejoice in this, temporarily (since overseas sales in foreign currencies would get a boost from a weakening dollar), eventually American consumption would suffer -- we wouldn't be able to afford imports to anywhere near the degree we had. And, as foreign economies that have been servicing our debt came to realize that "the music has stopped playing" and they don't want to be "left without a seat," they might very well stop funding our debt. Interest rates would then rise as falling demand for U.S. Treasury certificates sent yields skyrocketing. You think we'd ever see mortgage rates at less than 5% in our lifetime again? No, we would not. Mortgage rates would then go sky high, greatly reducing the number of potential home buyers. And what would that do to the market value of most homes?! The answer is that reduced demand would cause prices to plummet.
Ever larger numbers of state and local governments are either going bankrupt or are on the verge of it
Example, Jefferson County, Alabama is on the brink of what will likely be the largest government bankruptcy in the history of the United States-- surpassing the 1994 filing by Southern California's OrangeCounty.
No money for pensions
The U.S. is facing a pension crisis of unprecedented magnitude. Virtually all pension funds in the United States, both private and public, are massively underfunded. With millions of Baby Boomers getting ready to retire, there is simply no way on earth that all these obligations can be met. Robert Novy-Marx of the University of Chicago and Joshua D. Rauh of Northwestern's Kellogg School of Management recently calculated for Forbes magazine the collective unfunded pension liability for all 50 U.S. states. The total? $3.2 trillion!
The Social Security & Medicare Crisis
Social Security and Medicare expenses are wildly out of control. Once again, with millions of Baby Boomers now at retirement age, there is simply going to be no way to pay all of these retirees what they are owed.
Federal debt was already out of control
