When Economic Growth Looks Like a Recession
By Torrance Stephens
For the past five years I have been writing about the perspective of factors that may drag down the US economy to near ruin, here, here, here, here, and here are just a few. All based on knowledge of the current parameters of the global economy. In simple term, data suggest that like the global system, the US financial system is severely top heavy with debt and our economy is dragging, stagnate and getting worse with each passing day. The sad thing is that the US government seems not to be telling the truth and wants to paint a rosy picture of all is getting better. But no matter what they are saying and no matter what the Federal Reserve Bank does, it won’t be enough to put Humpty back together again, or be able to avoid another major economic downturn. And even sadder is that these issues persist no matter which political party is in power.
My reason for thinking this has nothing to do with likes or dislikes of Obama or the GOP, or my purview of the Federal reserve, but rather that the specter of a tenable future of a “hyperinflationary depression” is real for the US Economy. Mine is the sort of logic that is more like mathematics or chess, and presented merely to explain what I mean.
Just last week, the associate Press, based on census figures for 2009 reported that the number of folk living in poverty, under President Obama’s leadership is approaching 1960s levels. Currently, more than 45 million Americans (1 in 7) were living at or below the poverty line. This represents an increase from 13.2% to 15%. – the highest single year increase since 1959 when the government first started keeping such statistics. One reason is stalled US economic growth. Although President Obama is saying things are getting better, facts are that there has been a complete collapse of the US retail sector in the world’s largest economy. Both republicans and democrats, via their plutocratic policies, have obviated wage-levels for U.S. workers on behalf of large corporations so they will be able to “compete” with the wages of cheap labor in Asia all in the name of globalization. With reduced wages, in an age in which our economy was based on consumer spending and house buying, financed via foreign debt from banks who as we have learned were way undercapitalized and shady (LIBOR, MF Global, JPMorgan Chase, Wells Fargo, Citibank & others).
As of 2007, US household debt was 133% of household income. Maybe this is why the according to AARP, 600,000 American homeowners that are 50 years of age or older are currently in foreclosure. Why, because the average American consumer today is poor, under employed and/or unemployed. In fact, over the past 40 years, wages for the average U.S. worker have fallen by more than 50% (levels equal to the Great Depression).
Appears that present US fiscal and economic policy is converting the Middle Class into the Working Poor although they orate otherwise. How can we be in a a”recovery” when as a nation, we continue to sell less goods to consumers with lower incomes and increasingly more debt? This for me is an indication that we are living in a time of incessant high inflation.
America’s economy will continue to get worse if our only solution is to print more paper money while food prices continue to increase and more people become under-employed, unemployed as our disability rolls grow exponentially. Our seems to be a nation that is very burdened with substantial debt, but also at the mercy of Wall Street and Banks and Corporations who would rather profit on the backs of the average consumer whether via fradulaent complex financial instrument money making schemes or risky gambling practices that the Federal government sanctions. Way I seee it, from this perspective, what is being called economic growth is more akin to a recesssion than growth at all.