Thus, precisely when economists now recognize that one of the biggest challenges of this Great Recession is long-term unemployment, the Obama administration, both parties in Congress, and all U.S. government agencies continue to exclude the longest term unemployed from every single one of their unemployment statistics? What is that if not an outright attempt to mislead and deceive the public? This could go down in history as one of the greatest deceptions about the true state of U.S. labor markets. http://www.shadowstats.com/. Why? Because w hen you add these long-term discouraged workers back into the jobless count, you find that the real unemployment rate in the U.S. is actually 21.6 percent!
FOURTH, Bernanke failed to point out that all this is happening despite the biggest government interventions of all time!
The full scope of the government's interventions is now official: In its July 21 Quarterly Report to Congress, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) adds up the government's bailouts, stimulus programs, and money printing escapades since the debt crisis struck in 2007, as follows:
- According to SIGTARP, at mid-year 2010, the Fed has pumped into the economy $1.7 trillion through its massive purchases of mortgage bonds, Treasury bonds, and agency bonds.
- The FDIC has thrown another $300 billion into the pot, shutting down over 100 banks so far this year in the process.
- The Treasury has pumped in a net of $300 billion in TARP money (even after paybacks), plus another $500 billion in money outside of the TARP program.
- Plus, several other government agencies have chipped in another $800 billion.
The grand total, according to SIGTARP, was $3.7 trillion, excluding the stimulus but including a myriad of other rescue programs by the Federal Housing Finance Agency (FHFA), the National Credit Union Administration (NCUA), the Government National Mortgage Association (GNMA), the Federal Housing Administration (FHA), and the Veterans Affair (VA).
But no matter how you count it, some worrisome facts are absolutely self-evident:
- The enormous magnitude of the government's intervention FAR surpasses anything ever witnessed in the history of humankind.
- It's not working! -- housing is still collapsed, long-term unemployment is the worst ever recorded, and the recovery, already anemic, is aborting prematurely.
Through mid-2009, the government intervention programs tabulated by SIGTARP were being ramped up at a furious pace -- a total of $3 trillion overall. This means that over the 12-month period from mid-2008 through mid-2009, they were running at an average monthly pace of about $160 billion. But since mid-2009, they've been far slower, running at an average monthly pace of only $58 billion, or just one-third the prior level.
And right now, the pace of new funds injected into the economy through these government rescues are merely a trickle compared to their earlier rate. In other words:
- No new stimulus is in the works.
- No new TARP funds are forthcoming.
- The Fed has wrapped up its bond buying splurge.
- And the ONLY significant continuing programs are for housing, the one area where the government has admittedly seen the WORST overall results, in spite of its mighty efforts and huge expenditures and where the results are therefore likely to remain meager.
In summary
If you were counting on the government to prevent the second major leg in this great double-dip recession, don't hold your breath, for the primary CAUSE of the second dip is the government's conspicuous absence from sectors where it was, until now, the biggest mover, shaker, buyer, and financier.
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