50 Economic Numbers From 2011 That Are Almost Too Crazy To Believe

http://theeconomiccollapseblog.com/archives/50-economic-numbers-from-2011-that-are-almost-too-crazy-to-believe

Even though most Americans have become very frustrated with this economy, the reality is that the vast majority of them still have no idea just how bad our economic decline has been or how much trouble we are going to be in if we don't make dramatic changes immediately.  If we do not educate the American people about how deathly ill the U.S. economy has become, then they will just keep falling for the same old lies that our politicians keep telling them.  Just "tweaking" things here and there is not going to fix this economy.  We truly do need a fundamental change in direction.  America is consuming far more wealth than it is producing and our debt is absolutely exploding.  If we stay on this current path, an economic collapse is inevitable.  Hopefully the crazy economic numbers from 2011 that I have included in this article will be shocking enough to wake some people up.
At this time of the year, a lot of families get together, and in most homes the conversation usually gets around to politics at some point.  Hopefully many of you will use the list below as a tool to help you share the reality of the U.S. economic crisis with your family and friends.  If we all work together, hopefully we can get millions of people to wake up and realize that "business as usual" will result in a national economic apocalypse.

The following are 50 economic numbers from 2011 that are almost too crazy to believe....

#1 A staggering 48 percent of all Americans are either considered to be "low income" or are living in poverty.
#2 Approximately 57 percent of all children in the United States are living in homes that are either considered to be "low income" or impoverished.
#3 If the number of Americans that "wanted jobs" was the same today as it was back in 2007, the "official" unemployment rate put out by the U.S. government would be up to 11 percent.
#4 The average amount of time that a worker stays unemployed in the United States is now over 40 weeks.
#5 One recent survey found that 77 percent of all U.S. small businesses do not plan to hire any more workers.
#6 There are fewer payroll jobs in the United States today than there were back in 2000 even though we have added 30 million extra people to the population since then.
#7 Since December 2007, median household income in the United States has declined by a total of 6.8% once you account for inflation.
#8 According to the Bureau of Labor Statistics, 16.6 million Americans were self-employed back in December 2006.  Today, that number has shrunk to 14.5 million.
#9 A Gallup poll from earlier this year found that approximately one out of every five Americans that do have a job consider themselves to be underemployed.
#10 According to author Paul Osterman, about 20 percent of all U.S. adults are currently working jobs that pay poverty-level wages.
#11 Back in 1980, less than 30% of all jobs in the United States were low income jobs.  Today, more than 40% of all jobs in the United States are low income jobs.
#12 Back in 1969, 95 percent of all men between the ages of 25 and 54 had a job.  In July, only 81.2 percent of men in that age group had a job.
#13 One recent survey found that one out of every three Americans would not be able to make a mortgage or rent payment next month if they suddenly lost their current job.
#14 The Federal Reserve recently announced that the total net worth of U.S. households declined by 4.1 percent in the 3rd quarter of 2011 alone.
#15 According to a recent study conducted by the BlackRock Investment Institute, the ratio of household debt to personal income in the United States is now 154 percent.
#16 As the economy has slowed down, so has the number of marriages.  According to a Pew Research Center analysis, only 51 percent of all Americans that are at least 18 years old are currently married.  Back in 1960, 72 percent of all U.S. adults were married.
#17 The U.S. Postal Service has lost more than 5 billion dollars over the past year.
#18 In Stockton, California home prices have declined 64 percent from where they were at when the housing market peaked.
#19 Nevada has had the highest foreclosure rate in the nation for 59 months in a row.
#20 If you can believe it, the median price of a home in Detroit is now just $6000.
#21 According to the U.S. Census Bureau, 18 percent of all homes in the state of Florida are sitting vacant.  That figure is 63 percent larger than it was just ten years ago.
#22 New home construction in the United States is on pace to set a brand new all-time record low in 2011.
#23 As I have written about previously, 19 percent of all American men between the ages of 25 and 34 are now living with their parents.
#24 Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.
#25 According to the Bureau of Economic Analysis, health care costs accounted for just 9.5% of all personal consumption back in 1980.  Today they account for approximately 16.3%.
#26 One study found that approximately 41 percent of all working age Americans either have medical bill problems or are currently paying off medical debt.
#27 If you can believe it, one out of every seven Americans has at least 10 credit cards.
#28 The United States spends about 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.
#29 It is being projected that the U.S. trade deficit for 2011 will be 558.2 billion dollars.
#30 The retirement crisis in the United States just continues to get worse.  According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.
#31 Today, one out of every six elderly Americans lives below the federal poverty line.
#32 According to a study that was just released, CEO pay at America's biggest companies rose by 36.5% in just one recent 12 month period.
#33 Today, the "too big to fail" banks are larger than ever.  The total assets of the six largest U.S. banks increased by 39 percent between September 30, 2006 and September 30, 2011.
#34 The six heirs of Wal-Mart founder Sam Walton have a net worth that is roughly equal to the bottom 30 percent of all Americans combined.
#35 According to an analysis of Census Bureau data done by the Pew Research Center, the median net worth for households led by someone 65 years of age or older is 47 times greater than the median net worth for households led by someone under the age of 35.
#36 If you can believe it, 37 percent of all U.S. households that are led by someone under the age of 35 have a net worth of zero or less than zero.
#37 A higher percentage of Americans is living in extreme poverty (6.7%) than has ever been measured before.
#38 Child homelessness in the United States is now 33 percent higher than it was back in 2007.
#39 Since 2007, the number of children living in poverty in the state of California has increased by 30 percent.
#40 Sadly, child poverty is absolutely exploding all over America.  According to the National Center for Children in Poverty, 36.4% of all children that live in Philadelphia are living in poverty, 40.1% of all children that live in Atlanta are living in poverty, 52.6% of all children that live in Cleveland are living in poverty and 53.6% of all children that live in Detroit are living in poverty.
#41 Today, one out of every seven Americans is on food stamps and one out of every four American children is on food stamps.
#42 In 1980, government transfer payments accounted for just 11.7% of all income.  Today, government transfer payments account for more than 18 percent of all income.
#43 A staggering 48.5% of all Americans live in a household that receives some form of government benefits.  Back in 1983, that number was below 30 percent.
#44 Right now, spending by the federal government accounts for about 24 percent of GDP.  Back in 2001, it accounted for just 18 percent.
#45 For fiscal year 2011, the U.S. federal government had a budget deficit of nearly 1.3 trillion dollars.  That was the third year in a row that our budget deficit has topped one trillion dollars.
#46 If Bill Gates gave every single penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for about 15 days.
#47 Amazingly, the U.S. government has now accumulated a total debt of 15 trillion dollars.  When Barack Obama first took office the national debt was just 10.6 trillion dollars.
#48 If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.
#49 The U.S. national debt has been increasing by an average of more than 4 billion dollars per day since the beginning of the Obama administration.
#50 During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.

Of course the heart of our economic problems is the Federal Reserve.  The Federal Reserve is a perpetual debt machine, it has almost completely destroyed the value of the U.S. dollar and it has an absolutely nightmarish track record of incompetence.  If the Federal Reserve system had never been created, the U.S. economy would be in far better shape.  The federal government needs to shut down the Federal Reserve and start issuing currency that is not debt-based.  That would be a very significant step toward restoring prosperity to America.

During 2011 we made a lot of progress in educating the American people about our economic problems, but we still have a long way to go.

Hopefully next year more Americans than ever will wake up, because 2012 is going to represent a huge turning point for this country.

The Debt Ceiling Debate That Didn't Happen

War and Debt

By MICHAEL HUDSON

To begin with the most obvious question: If governments run up their debt in the process of carrying out programs that Congress already approved, why would Congress have yet another option to stop the government from following through on these authorized expenditures, by refusing to raise the debt ceiling?

The answer is obvious when one looks at why this fail-safe check was introduced in almost every country of the world. Throughout modern history, war has been the major cause of a rising national debt. Most governments operate in fiscal balance during peacetime, financing their spending and investment by levying taxes and charging user fees. War emergencies push this balance into deficit – sometimes for defensive wars, sometimes for aggression.

In Europe, parliamentary checks on government spending were designed to prevent ambitious rulers from waging war. This was Adam Smith’s great argument against public debts, and his urging that wars be financed on a pay-as-you-go basis. He wrote that if people felt the economic impact of war immediately – rather than postponing it by borrowing – they would be less likely to support military adventurism.

This obviously was not the Tea Party position, nor that of the Republicans. What is so remarkable about the August 2 debt ceiling crisis in the United States is its seeming dissociation with war spending. To be sure, over a third ($350 billion) of the $917 billion cutback in current spending is assigned to the Pentagon. But that simply slows the remarkable escalation rate that has taken place from Iraq to Afghanistan to Libya.

What is even more remarkable is that last month, Democrat Dennis Kucinich and Republican Ron Paul sought to make President Obama obey the conditions of the War Powers Act and get Congressional approval for his war in Libya, as required when warfare goes on for more than three months. This attempt to apply the rule of law to the Imperial Presidency was unsuccessful. Obama clamed that bombing a country was not war. It was only war if a country’s soldiers were being killed. Bombing of Libya was done from the air, at long distance, and perhaps also by drones. So is a bloodless war really a war – bloodless on the aggressor’s side, that is?

Here was precisely the situation for which the debt ceiling rule was introduced in 1917. President Wilson had taken the United States into the Great War, breaking his election campaign promise not to do so. Isolationists in the United States sought to limit America’s commitment, by imposing Congressional oversight and approval of raising the debt ceiling. This safeguard obviously was intended to be used against unscheduled spending that occurred without Congressional approval. 

The present rise in U.S. Treasury debt results from two forms of warfare. First is the overtly military Oil War in the Near East, from Iraq to Afghanistan (Pipelinistan) to oil-rich Libya. These adventures will end up costing between $3 and $5 trillion. Second and even more expensive is the more covert yet more costly economic war of Wall Street against the rest of the economy, demanding that losses by banks and financial institutions be passed onto the government balance sheet (“taxpayers”). The bailouts and “free lunch” for Wall Street – by no coincidence, Congress’s number one political campaign contributor – cost $13 trillion.

It seems remarkable that Obama’s major focus on the debt ceiling is to warn that Social Security funding must be cut back, along with that of Medicare and other social programs. He went to far as to say that despite the fact that FICA wage set-asides have been invested in Treasury securities for over half a century, the government might not send out checks this week.

A radical double standard is at work for democracies. Wall Street investors certainly had no such worry. In fact, interest rates on long-term Treasury bonds actually have gone down over the past month, and especially over the last week. So institutional debt holders obviously expected to get paid. Only the Social Security savers were to be stiffed – or was Obama simply trying to threaten them, so as to depict himself as a hero coming in to save their Social Security by negotiating a Grand Bargain?

Wall Street had it right. There was no real crisis. Authorization to raise the public debt ceiling is not a proper occasion to discuss long-term tax policy. Since 1962 – just as the Vietnam War was starting to escalate – it has been raised 74 times. This averages out to about once every eight months. It is like going to a Notary Public – just to make sure that the President is not doing something wrong. Mr. Obama could have asked for a limited vote just on this, without riders. Never before have riders such as this been attached. And even more remarkably, there was no attempt to impose a rider restricting the Obama Administration from spending any more funds on Libya, without getting an official Congressional declaration of war.

Obama could have invoked the 14th Amendment to pay. He could have taken the proposal made by Scott Fullwiler and other UMKC economists for the Treasury to issue a few $1 trillion coins and pay the Fed for Treasury securities, to retire. But Mr. Obama steered right into the debate, turning it into a discussion of how to cut back Social Security and Medicare in the emerging U.S. class war, rather than over extending the Oil War to North Africa.

The first great victory for the financial sector in America’s domestic class war was the Bush “temporary” tax cuts on the wealthy. This aggression was not undone in order to restore budget balance. No temporary tax cuts were revoked, no loopholes closed. The burden of balancing the budget was pushed even further onto the Democratic Party’s own base: urban labor, racial and ethnic minorities, the Eastern and Western seaboards. Yet the Democrats split 95/95 on the vote to raise the debt ceiling by slashing social spending on their major voting constituency.

Voting constituency, but not campaign contributors. That looks like the key to how the debt crisis has unfolded. Although leading Democrats such as Maxine Walters Waters, Dennis Kucinich, Henry Waxman, Barney Frank, Edolphus Towns, Charles Rangel and Jerrold Nadler opposed it (and on the Republican side, Ron Paul, Michele Bachmann and Ben Quayle), much of the principled opposition has come from traditional Republicans. Reagan’s Assistant Treasury Secretary Paul Craig Roberts accused the deal as being too right-wing and favoring the wealthy to a degree threatening to bring on depression.

The essence of classical free market economics was to restrict Executive power – in an epoch when war-making power was the major abuse of national interests. Just as the lower house of bicameral legislatures had taken over the power to commit nations to permanent national debt – rather than royal debts that died with the kings, as were the norm before the 16th century – so parliaments asserted their rights to block warfare.

But now that finance is the new form of warfare – domestically, not externally – where is the power to constrain Treasury and Federal Reserve power to commit taxpayers to bail out financial interests at the top of the economic pyramid? The Fed and other central banks claim that their political “independence” is a “hallmark of democracy.” It seems to be rather a transition to financial oligarchy. And now that finance has joined with the oil industry, major monopolies and privatizers of the public domain, the need for some kind of Congressional oversight is as necessary as was parliamentary power over military spending in times past.

No discussion of this basic principle was voiced in the debt-ceiling debate. Even critics who voted (ostensibly) reluctantly (so as to provide plausible deniability to what no doubt will be their later condemnations of the deal when election time comes around) acted as if they were saving the economy. The reality is that there is now little hope of rebuilding infrastructure as the president promised. Cutbacks in federal revenue sharing will hit cities and states hard, forcing them to sell off yet more land, roads and other assets in the public domain to cover their budget deficit as the U.S. economy sinks further into depression. Congress has just added fiscal deflation to debt deflation, slowing employment even further.

How indeed will they explain all this in the November 2012 elections?

Michael Hudson is a former Wall Street economist. A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) and Trade, Development and Foreign Debt: A History of Theories of Polarization v. Convergence in the World Economy. He can be reached via his website, mh@michael-hudson.com

How do I cut thee? Let me count the ways that the Gang of Six would do it

Who Will Suffer Under the 'Gang of Six' Plan?

George Zornick

July 20, 2011

President Obama endorsed the Senate “Gang of Six” deficit reduction plan Tuesday, saying that the proposal “is broadly consistent with the approach that I’ve urged” and “makes sure that nobody is disproportionately hurt from us making progress on the debt and deficits.”

Related Content

Bernie Sanders to Obama and the Democrats: Stand Up to the Economic and Political 'Schoolyard Bullies'

Who Says the Ryan Budget Privatizes Medicare, Threatens Seniors? Senate Republicans

K Street's Favorite Democrat

Go Gang of 70

Elizabeth Warren for US Senate

About the Author

George Zornick

George grew up in Buffalo, NY and holds a B.A. in English from the State University of New York at Buffalo. Prior to...

Also by The Author

[ Click for More ]

Who Is Richard Cordray? (US Politics,Politics)

Obama’s choice to head the CFPB isn’t very well-known nationally—but Ohioans are familiar with his battles against Wall Street. 

George Zornick

 1 comment

Bernanke Not Ready to Address Unemployment... Yet

Fed chairman Ben Bernanke appeared before Congress this week and sent mixed messages on his willingness to address the jobs crisis. 

George Zornick

 16 comments

Related Topics

Disaster Jamie Dimon MedicarePresident Senate Social Issuesco-director

However, an examination of the plan’s specifics reveals that corporations and wealthy Americans won’t feel much pain at all—in many cases, just the opposite. The plan slashes taxes, and could bring the top personal income rate down as low as 23 percent—meaning CEOs like Jamie Dimon and Lloyd Blankfein could see their after-tax income increase by as much as $3 million, according to Dean Baker, co-director of the Center for Economic and Policy Research. The corporate tax rate would bereduced from 35 percent to between 23 and 29 percent under the proposal. (Supposedly enough loopholes would be closed to keep total revenue from corporate taxes the same. Even in that scenario, corporations don’t pay an extra penny). Military spending also remains virtually untouched.

Meanwhile, the harm done to seniors, students, working families and others under the “Gang of Six” plan is unmistakable. Social Security benefits would be reduced, and there are also cuts to Medicare and Medicaid. Students and the disabled would lose some federal government support. Here’s a quick look at who would be most harmed under the new most popular proposal in Washington.

Seniors: Americans over age 65 get hit from several directions under the “Gang of Six” proposal. First, the plan reduces Social Security benefits by 0.3 percentage points per year by tinkering with the formula that adjusts benefits based on inflation. This could lead to annual reductions of over $1,300 for some seniors. Social Security is solvent through 2037 and does not contribute to the deficit, so this change is particularly misguided.

Medicare also would also face serious reductions. The plandirects the Senate Finance Committee to reduce doctor payments by $300 billion, and then cut another $200 billion from the program overall. To achieve that, anything from raising the eligibility age to increasing cost-sharing could be considered, and would almost have to be in order to find savings of that magnitude.

The poor: Medicaid will no doubt suffer under the “Gang of Six” plan, though it’s not possible to put a dollar amount on the cuts yet. The proposal says that the government must “spend healthcare dollars more efficiently in order to strengthen Medicare and Medicaid.” That’s obviously code for spending fewer dollars, which means Medicaid recipients can expect to receive less.

The cuts would be negotiated by another bipartisan group of senators over the next six months, but the starting point for Republicans on Medicaid is downright draconian. In the budget passed by House Republicans earlier this year, and supported by a vast majority of Republican Senators when it came up for a vote there, the program would be cut by a whopping 35 percent by 2021—even as medical costs skyrocket between now and then. It’s not likely the GOP would win that steep of a reduction, but even halfway to that point would be catastrophic for Medicaid recipients. As none other than Sen. Kent Conrad, a key figure in the “Gang of Six,” told the Huffington Post in June, Medicaid operates on such low overhead that a cut “goes right to medical services.”

The disabled: The “Gang of Six” plan completely eliminates a disability insurance program created under the 2009 healthcare reform bill. The Community Living Assistance Services and Supports Act, or CLASS Act, provides in-home care for anyone who becomes disabled, as an alternative to being placed in a nursing home. It provides up to $18,250 annually for these costs, with no lifetime cap. Premiums are $5 per month for students or people under the poverty line, and about $123 per month for everyone else, but it’s also voluntary—anybody can ask their employer to simply opt out.

The elimination of the CLASS Act is another example of sacrificing a valuable program that simply does not contribute to the deficit but rather conflicts with conservative ideology. The Congressional Budget Office estimatesthe program actually saves the government $70 billion through 2019, because people have to pay premiums for five years in order to qualify for benefits. It also keeps people out of nursing homes, which are a major driver of increasing medical costs.

Students: The “Gang of Six” blueprint directs the Senate Committee on Health, Education, Labor and Pensions, which oversees federal student loan programs, to come up with $70 billion in budgetary savings. Given the somewhat limited scope of what the Committee oversees, in terms of areas that actually create federal expenditures, it’s virtually impossible it could find savings of that scale without serious changes to federal student loans.

One idea popular with the Bowles-Simpson debt commission, and echoed recently by Representative Eric Cantor, would be to end the Stafford student loan program, which subsidizes the interest on loans while students are enrolled in college. An outright elimination of the program would save the government $40 billion over ten years, but would force students to pay interest on their college loans while still in school and likely not drawing much of an income, if any.

Pell Grants, which are federal scholarships for low-income students, are also likely to be on the chopping block. The program is already running an $11 billion deficit, and will no doubt be a juicy target for Senators looking to get $70 billion in cuts.

These are the areas currently identifiable based on the “Gang of Six” blueprint—but it calls for massive, yet-unspecified spending reductions, and possibly discretionary spending caps down the road. Given the current slant towards reductions for needy Americans in the blueprint, it’s hard to imagine future reductions will be any different. 

George Zornick