Statistical Data Continues
to Show an Economy in Peril
A stunning array of highly disturbing recently released economic indicators illustrate how badly the American economy is faring. Far more than a cyclical downturn or a slow rebound from the “Great Recession,” the U.S. economy is failing on many levels, and to an unprecedented degree.
Equally unsettling is the relative equanimity with which official Washington and the mainstream media have responded to the statistics–when they have responded at all. While exceedingly slight and temporary variations in some indicators are heralded as signs that the climate has improved, long term structural realities and enduringly troublesome numbers are virtually ignored.
Blaming the current crisis–and it is a crisis–on the aftermath of the Great Recession can no longer be accepted as within the realm of reason. Since the conclusion of the Second World War, no post-recession period has been as severe as what America now endures. The actions that have been taken in an unsuccessful attempt to jump-start the economy appear to have resulted in more harm than good, but there is no admission of failure on the part of those responsible. Without a change in course, there is little hope that improvement can occur.
A great deal of attention has been paid to the “Fiscal Cliff” and the federal debt and deficit debates. But without a sound and growing economy, no remedies to those issues will prove viable.
STATISTICS INDICATE
THE EXTENT OF THE CRISIS
America slipped into recession at the end of 2012. According to the U.S. Commerce Department, real GDP (gross domestic product — the output of goods and services produced by labor and property located in the United States) decreased at an annual rate of 0.1 percent in the fourth quarter of 2012. Economists had expected an increase of 1%.
Unemployment, now at 7.9%, is higher than when President Obama took office. According to the U.S. Department of Labor, long Term unemployment represents 38.1% of the unemployed. This continues the highly disturbing trend of long term unemployment being at historic highs during the past four years. In January of 2009, when the current administration took office, there were 2.6 million people classified as long term unemployed. The current number, which has fluctuated slightly over the past several months, is 4.7 million, accounting for an unmanageable 38.1 percent of all those unemployed. This number may well be the least reliable Bureau of Labor statistics number, since it omits those who have gone off the charts in a variety of ways. Further, numerous studies have noted that the longer an individual is unemployed, the more difficult it is to find employers willing to hire them. Therefore, the high long term unemployment rate remains one of the most troublesome long-term challenges for recovery.
Americans are becoming poorer. The 2013 Assets & Opportunity Scorecard reveals that 44% of American households are liquid asset poor; one in three has no savings account, and 56% of consumers have subprime credit scores.
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Gas prices are up. According to a recent AAA survey the national average price for a gallon of regular unleaded gasoline is $3.35. This price is four cents more expensive than the prior week and six cents more than the prior month. Despite significant supplies of gas, the cost per year to the average American family has risen sharply during the past four years, from $2,816.40 in 2009 to $4,112.40 currently.
Food prices are rising. According to the U.S.D.A, the inflation forecast for both all food and food-at-home (grocery store) prices in 2013 is an increase of 3 to 4 percent. This forecast represents an annual increase that is above the historical average for both indexes. Inflation is expected to remain strong, especially in the first half of 2013, for most animal-based food products due to higher feed prices. Furthermore, inflation is expected to be above the historical average for food categories such as cereals and bakery products as well as other foods.
Exports are down. During the 4th quarter of 2012, exports plummeted 5.7%.
All of these frightening economic indicators have occurred even after (some argue because of) nearly a trillion dollars in “stimulus” spending was pumped into the economy by Washington, and an artificially low interest rate maintained by the Federal Reserve in attempt to ease, at least superficially, the effects of a failing economy.
In a recent report, the St. Louis Federal Reserve noted that: “the U.S. national debt now exceeds 100 percent of the Gross Domestic Product.”
According to a “Fix the Debt” analysis, The United States gross national debt is currently more than $16 trillion and growing by more than $3 billion every day. Last fiscal year alone (fy2012), the debt rose more than $1.3 trillion, the fourth year in a row that the deficit has exceeded the trillion dollar mark.”
According to a CBS study,”The Debt rose $4.899 trillion during the two terms of the Bush presidency. It has now gone up $4.939 trillion since President Obama took office.” Despite that enormous sum, no appreciable gain can be discerned for the nation.
The Pew Research Center recently conducted a poll indicating that the number of Americans who place fixing the debt as a high priority jumped from 53% four years ago to 72% currently.
Repeatedly, White House officials emphasize that they took office in the aftermath of a serious recession. However, as noted by a recent study byDinah Walker,”The economic expansion following the 2008 recession has been the weakest of the post World War II era and remains an outlier among postwar recessions along several dimensions.” The nation appeared to begin to recover strongly from the recession at first. However, when the effects of essentially misguided policies took place, the recovery went into a tailspin.