I certainly do not believe so and strongly believe the U.S. has entered a second recession. It may not be as bad as the first. Economists say that the Great Recession began in December 2007 and lasted until July 2009. That may be the way that the economy was seen through the eyes of experts, but I do not believe that the 2008-2009 downturn ever ended.
As MSNBC recently noted:
“Home prices have fallen to 2002 levels. Values have dropped nearly 50 percent in parts of Florida, California, Nevada and Arizona. Property values are also down that much in parts of troubled big cities like Detroit. Estimates are that as many as 11 million homes have underwater mortgages. Banks have inventories of as many as 2 million foreclosed homes which have not even been released to the market. Home prices could fall another 10 percent if current trends persist”.
Perhaps the most powerful argument that the US recession never ended or that a new one has begun is the persistence of unemployment. Fourteen million people are out of work. A third of those have been jobless for more than a year. May employment data showed the jobless rate rose unexpectedly and that the economy added only 58,000 jobs.
But I guess this is not news to anyone who has been paying attention….And billion dollar fund managers agree: the government never fixed the underlying economic problems, so we’ll have another crash.
As CNN Money recently pointed out:
Wal-Mart’s core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried.
States and Cities on the other hand are in worst shape since the Great Depression. California in fact is issuing IOUs for only the second time since the Great Depression. Things haven’t been this bad for state and local governments since the 30s.
Going back to 1930, there were though 123 million Americans….and at the height of the Depression in 1933, around 25% of the total workforce or about 12 million people were unemployed.
Will unemployment reach 25% during this current crisis?
I don’t know. But I believe the number of people unemployed will be higher than during the Depression.
Specifically, there are currently some 300 million Americans, 155 million of whom are in the work force.
Unemployment is expected to exceed 10% by many economists, and Obama “has warned that the unemployment rate will explode to at least 10% in 2009″.
10 percent of 155 million is 15.5 million people out of work – more than during the Great Depression.
Given the above facts, it would seem that the government hasn’t been doing much. But the scary thing is that the government has done more than during the Great Depression, but the economy is still stuck in a pit.
The amount spent in emergency bailouts, loans and subsidies during this financial crisis arguably dwarfs the amount which the government spent during the New Deal.
It is a fact that we are still committed to spending levels that surpass the cumulative cost of all of the major wars and government initiatives since the American Revolution.
According to Dave Ramsey, host of a nationally syndicated radio program discussing personal finance topics, “If the US Government was a family, they would be making $58,000 a year, they spend $75,000 a year, and are $327,000 in credit card debt. They are currently proposing BIG spending cuts to reduce their spending to $72,000 a year. These are the actual proportions of the federal budget & debt, reduced to a level that we can understand.”
We all better be able to relate to this. If you can’t, you don’t get it.
Wanna look at it at a more macro-level?
The New Deal had a price tag of only $500 billion. The Marshall Plan that enabled the reconstruction of Europe following WWII for $13 billion, comes out to approximately $125 billion in 2008 dollars. The cost of fixing the S&L crisis was $235 billion in inflation adjusted dollars.
So even though the government’s spending on the “war” on the economic crisis dwarfs the amount spent on the New Deal, our economy is still stuck in the mud.
Government leaders make happy talk about how things are improving, but this talk will not and cannot fix the economy.
Since the dawn of the Twentieth Century, we have been told that the federal government has the answers to solve all of society’s problems. We have been promised, by supposedly serious men who have sworn an oath before God and man, that if we just give Washington DC more of our money and more of our personal freedom, the problems of poverty, illiteracy, racism, unemployment, crime and corruption will all be solved. Today, each and every one of these problems is worse than it has ever been. The federal government and its blood-sucking bureaucracies do not have a solution to the problem, they ARE the problem.
Albert Einstein once said “The definition of insanity is doing the same thing over and over again and expecting a different result.” We, the People of the United States of America, appear to have gone insane. It is time to do something different. It is time to fundamentally change the way we do business in this country starting with the way we govern ourselves and OUR economy. That will surely be a painful process, but the alternatives before us are slavery to the system or global war. It is time for new leadership in the US; someone who truly understands and believes in American Exceptionalism.
Your feedback as always is greatly appreciated
Thanks much for your consideration
By : Ziad K Abdelnour
Ziad is also the author of the best selling book Economic Warfare: Secrets of Wealth Creation in the Age of Welfare Politics (Wiley, 2011),
Mr. Ziad Abdelnour continues to be featured in hundreds of media channels and publications every year and is widely seen as one of the top business leaders by millions around the world.
He was also featured as one of the 500 Most Influential CEOs in the World.
