Federal Reserve Chairman Warns of Deficit, Hooverville Tent, Housing Market Collapsing, Social Security Disability Benefits Soaring, The High Cost of Regulation, U.S. in a Depression
Men shuddered in the cold as they stood in long lines hoping the soup did not run out before they got their share, across town whole families lived in tents and cooked over open fires. With no welfare system in place, private charities fought to keep up with the demands for assistance. While they tried to meet the challenges before them, the people who lived through the Great Depression were totally unprepared for what was happening around them. The tent cities, called Hoovervilles, that sprung up around the country became symbolic of the government’s seeming inability to deal with the calamity.
Today the carnage is not as evident as it was in the 1930s, but it is still there. Instead of Hoovervilles sprouting up in vacant lots the chronically unemployed are neatly hidden away in government provided housing and given generous amounts of food stamps. Further soothing the conscience of working Americans is a nonsensical unemployment number of 6.7% which negates to count those who have been unemployed too long too receive benefits. The real unemployment number is near 20% which neatly coincidences with the number of households that have not one working member. As Hunter Lewis points out in recent letter to Breitbart news, if the economic numbers were calculated the same way they were in the 1930’s the United States, and indeed much of the world, would be listed as being in a depression. Even the previous quarters .1% growth would of been in negative territory if it weren’t for magic cash from the Federal Reserve and forced expenditures due to ObamaCare.
Statistics like the doubling of welfare recipients and the exploding number of those receiving disability payments have covered up the real state of the economy. The GDP has been correspondingly distorted by government printing and borrowing. Unfortunately mirages have a tendency to dissolve into the ether; similarly the so called recovery is on the verge of disappearing into the Keynesian mists from which it came.
There is a growing consensus that things are going to get worse, and many believe much worse. With technology stocks leading the way, the stock market has been slowly inflated beyond sustainability. It looks to be no longer if, but when the next crash will bring a sense of reality to the hustlers on Wall Street. Housing as well is in trouble, the so called recovery in the home building market is sputtering to a stop. The truth is there never was a real housing recovery. Home ownership has been plummeting since the banking collapse, only investors have kept the market afloat. Even now, 43% of home sales are still cash sells. The collapse of housing has become a matter of time, as investment capital turns its attention elsewhere the sector once again will feel the pains of a receding market.
How bad are things? In a worse case scenario Peter Schiff, the business consultant and Austrian economist, is predicting 2/3 of Americans will lose everything. Swiss Investor Marc Faber also recently shared his worries on CNBC that we are heading for a collapse worse than 2008. Adding to the woes, the exploding U.S. debt is reaching unsustainable levels, something even the present Keynesian Federal Reserve Chairman is concerned about. If the present situation is America’s Great Depression 2.0, the coming collapse would be 2.1. A depression within a depression much like FDR created in 1937. Like the economic collapse of 37, this one too will have the fingerprints of incompetence all over it.
Like a college student with his parents credit card, President Obama has ran up trillions in debt with nothing to show for it. He has burdened struggling businesses with regulations whose costs exceed what they pay in taxes. With ObamaCare, he took over 1/6th of the economy with a monstrosity that has been ran with all the incompetence the government could muster. If it weren’t for fracking, and the exploding energy production resulting from it, the United States economy would be in far worse shape. While the President is making good on his promise to radically remake America, it is doubtful the destruction of America’s economic foundation is what his supporters had in mind.
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In some ways this is worse. Even during the 1st Great Depression real per capita incomes were increasing that is not true in this case
A Conservative Mind said:
A good point.