Have you noticed the latest sound bites coming from the punditry in the corporate mainstream media? Here is the latest wisdom flowing from the lying mouthpieces of the ruling oligarchy (Wall Street, Washington DC, Mega-corporations):
The economy is recovering and employment is growing.
Consumers are deleveraging, saving and using cash for purchases.
Retailers are doing fantastic as consumers increase spending.
These are the three themes being proclaimed simultaneously by the mainstream media. Every time I hear these themes proclaimed, I want to shout out like Joe Wilson --" "YOU LIE!!!"
How can consumers be deleveraging, saving and increasing spending at the same time? Let's examine the facts to see who is lying.
The fallacy that the economy is recovering and employment is growing can be put to rest by an examination of the BLS data accessed here: ftp://ftp.bls.gov/pub/suppl/empsit.cpseea1.txt.
The number of Americans employed over the last few years is as follows:
2007 --" 146.0 million
2008 --" 145.5 million
2009 --" 139.9 million
2010 --" 138.9 million
It seems there are 7.1 million less employed people than there were three years ago. Contrary to the spin from the White House, there are 1 million less people employed today than during the horrific 2009 year. Luckily, another 6 million people left the work force, or we'd really have a problem. The truth is that if the government actually counted everyone in the country who wants a job, the unemployment rate is not 9.8%, but 23% and it continues to rise.
The GDP of the US peaked at $14.5 trillion in the 3rd quarter of 2008. Today it stands at $14.8 trillion, two years later. GDP has gone up for one reason and one reason only --" the Federal Government has borrowed trillions from future generations in order to artificially prop up a system already crumbling from the weight of too much debt. Highlights from the GDP calculation are:
- Private investment is $216 billion lower today than it was in the 3rd quarter of 2008.
- Exports are $80 billion lower today than they were in the 3rd quarter of 2008.
You may ask yourself how can GDP be higher if private businesses are investing less and exporting less. The answer of course is your friendly neighborhood Feds. The Federal government is spending $128 billion more today than it was in 2008. The last piece to the puzzle is the beloved consumer, who accounts for 70% of GDP. Good old Joe Sixpack has ramped up his spending by a good $470 billion since the 1st quarter of 2009. With this figure, we must be in a strong recovery. Larry Kudlow says so.
A little more digging on the BEA website reveals some interesting data:
- Personal income has risen by $300 billion since the 1st quarter of 2008.
- Strangely, private industry wages have DECLINED by $213 billion since the 1st quarter of 2008.
It seems that personal income has risen due to two major items. You will be glad to know that government wages have risen by $58 billion and drum roll please: government entitlement transfers have increased by $523 billion since the 1st quarter of 2008. The Federal government has borrowed hundreds of billions from future generations and paid it out in the form of unemployment benefits and other social programs so that consumers would spend it today. This is how you generate a positive GDP, without generating a real recovery. And, of course, if the government used an honest CPI rate, GDP would still be negative, just as it has been for most of the past decade.
James Quinn is a senior director of strategic planning for a major university. James has held financial positions with a retailer, homebuilder and university in his 22-year career. Those positions included treasurer, controller, and head of (more...)
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