An explosion of private debt, enabled by financial deregulation and lax enforcement of rules during the Bush years created a financial bubble similar to the one that triggered the Great Depression. When the bubble burst private debt was rapidly destroyed and credit lines were slashed. The destruction of private debt was massively deflationary. The Federal Reserve tried to stimulate lending by slashing interest rates to banks to zero, but that was not enough to offset the destruction of money caused by the collapse of housing prices and the debt bubble. President Obama and the Democratic Congress of 2009-10 prevented another Great Depression by public spending which saved state jobs, primarily jobs for teachers, police, and firefighters. Saving those jobs and funding new jobs to build and repair infrastructure stopped the deflationary spiral the economy was entering. President Obama and Democrats have successfully reduced the total public and private debt of the United States by 4 trillion dollars while getting unemployment back down to 7.8% against strong conservative Republican opposition.Republicans would have brought on another Great Depression if they had been allowed to implement their plan to cut federal government spending.
Producer Price Index returns to record highs:
High prices seem to be the norm. The US stock and bond markets are at, or near, all-time highs. Agricultural land in the US is at all time highs. The Contemporary Art market in New York is booming with record sales and high prices. The real estate markets in Manhattan and Washington, DC, are both at all-time highs as the Austrians would predict. That is, after all, where the money is being created, and the place where much of it is injected into the economy.
This doesn’t even consider what prices would be like if the Fed and world central banks had not acted as they did. Housing prices would be lower, commodity prices would be lower, CPI and PPI would be running negative. Low-income families would have seen a surge in their standard of living. Savers would get a decent return on their savings.
Of course, the stock market and the bond market would also see significantly lower prices. Bank stocks would collapse and the bad banks would close. Finance, hedge funds, and investment banks would have collapsed. Manhattan real estate would be in the tank. The market for fund managers, hedge fund operators, and bankers would evaporate.
In other words, what the Fed chose to do ended up making the rich, richer and the poor, poorer. If they had not embarked on the most extreme and unorthodox monetary policy in memory, the poor would have experienced a relative rise in their standard of living and the rich would have experienced a collective decrease in their standard of living.
The rich and powerful were represented by government and acted on behalf of a tiny number of economic elites. The rest of Americans? .........Not so much.
fer Pilin' it Higher and Deeper.....
You see folks, Obama Hatred, just like any other kind of hatred, kills the intellect. Take this as a warning - this could happen to you.
In the last year, the civilian noninstitutional population rose by 3,766,000. Yet the labor force only rose by 1,566,000.
Those "not" in the labor force rose by 2,199,000 to 88,839,000.
The massive rise of those "not" in the labor force is primarily economic weakness, not demographics. Actually, older workers are returning to the work force because they cannot afford retirement. One look at the average age of Walmart greeters and those working in fast food restaurants tells a story itself.
Decline in Labor Force Factors
- Discouraged workers stop looking for jobs
- People retire because they cannot find jobs
- People go back to school hoping it will improve their chances of getting a job
- People stay in school longer because they cannot find a job
Were it not for people dropping out of the labor force, the unemployment rate would be well over 10%.
At an increasing rate, even during the alleged recovery, consumers are tapping their 401Ks to pay current bills according to a study by advisory firm HelloWallet as describe in the Washington Post article 401(k) breaches undermining retirement security for millions.
A report due out this week from the financial advisory firm HelloWallet found that more than one in four workers dip into retirement funds to pay their mortgages, credit card debt or other bills. Those in their 40s have been the most likely culprits — one-third are turning to such accounts for relief.
The withdrawals, cash-outs and loans drain nearly a quarter of the $293 billion that workers and employers deposit into the accounts each year, undermining already shaky retirement security for millions of Americans.
Fresh data from Vanguard, one of the nation’s largest 401(k) managers, show a 12 percent increase in the number of workers who took loans against their retirement accounts or withdrew money outright since 2008.
In 2010, 28 percent of participants reported having an outstanding loan against their retirement accounts, an all-time high, according to a survey of 110 large employers by Aon Hewitt, a human resources consultancy. And nearly 7 percent of employees took hardship withdrawals that year — roughly a 40 percent increase since the recession, while 42 percent of workers cashed out their plans rather than rolling them over when they changed jobs.
“401(k)s are not being used for retirement by a large and growing share of workers because they are misaligned with the very basic financial problems most workers face and must address,” said Fellowes of HelloWallet, which provides benefits advice to companies.
Using data from the Federal Reserve’s Survey of Consumer Finances and the Survey of Income and Program Participation, conducted by the Census Bureau, the report said 30 percent of households earning less than $50,000 a year had cashed out a retirement plan for non-retirement purposes. Only 12 percent of households earning between $100,000 and $150,000 a year and 8 percent of those earning more than $150,000 a year have cashed out a retirement account, the report said.
“The investment advice out there needs to recognize that a large share of participants is not going to use the money for retirement, so they should not be exposed to risky investments,” Fellowes said. “There is no investment adviser in the country who would put workers in the stock market if they were told the money being invested was for short-term needs.”
Notice all the data comes from Federal Reserve, BLS and other government data Archie.
Again you cannot answer. I know it's hard on you, but try to keep up. There is more to come!
You can find all the right wing propoganda you want to find and I am not buying it. The republicans do absolutely NOTHING for poor people.
Those tax increases are going back to the same rates (actually a point lower) before GWB put those tax breaks in for the wealthy.
People are not stupid, they are not buying into the faux news anymore, the GOP pretend to be fair and equitable for all anymore and especially the lunacy of the tea party.
PRINCETON, NJ -- Americans' concerns about the federal budget deficit and government dysfunction rose high enough in January to knock unemployment out of the top two slots on Gallup's "most important problem" list for the first time since 2009.
Gee Sheila did you notice that the data is all from the Fed and the government? So the Fed and the government must be "right wing" huh? And I guess that Gallup is now "right wing" too?
Or do you really think that things are great? You've just been saying the opposite.
Who said anything about taxes in this anyway? Are you actually reading any of this?
This post was modified from its original form on 16 Jan, 11:10
It’s a Slow Economic Recovery, More Data Show
Two new pieces of info about the U.S. economy out today add to the pile of data indicating a frustratingly slow economic recovery.
Americans spent more in August even though their income barely grew, the Commerce Department said. The spending increase was driven in part by higher gas prices. The report also showed that weak job and wage growth are keeping American incomes low.
Another much-watched report on U.S. economic activity showed the first slide in three years. Slowing growth in China and the persistent problems in Europe are likely contributors to this drop.
The upcoming election will settle some things, according to the report. “Uncertainty about taxes, regulations, and public policy going into 2013 is causing spending decisions to be deferred or constrained until the picture is clearer,” it said.
While this is obviously not good news, it’s important to keep in mind that this is just one month’s worth of data. It is not clear whether this is a blip or a larger trend.
There was also news on Europe’s debt crisis:
Spanish banks are short about $69.2 billion, according to stress test results, about in line with expectations. This is one step on the way to Spain tapping into EU funds to help its economy and banking sector.
About Mike Shedlock
Read more at http://globaleconomicanalysis.blogspot.com/2013/01/over-25-of-401ks-tapped-to-pay-current.html#HqwL2L3lLlHvudGi.99 THIS GUY IS NOT THE GOVERNMENT
who cares about Gallup, people change from month to month ... I don't care.
I don't care about the hatred out there, it is not wise for me to get involved in it again as I once did very proficiently.
I said: "Notice all the data comes from Federal Reserve, BLS and other government data Archie."
????? I said the DATA was from the Fed and the Government
"Who did the Fed and government save after 2008? "
Without even going through all those figures, I'd say that common sense is telling me that the Fed saved the banks. The Banks then paid themselves bonuses.
Close Nancy. The Fed and the Government took care of the wealthy and powerful and we are still paying the price. Of course the financial services/banks won big time. And you are right. Their CEO's got to keep their bonuses received from fake profits on fraudulent transactions. The banks are even more powerful now and they are doing the same casino style speculation fueled by free money from the Federal Reserve.
Strange that this is called "right wing". Chris Hedges, Matt Taibbi, Glen Greenwald and others say the same thing. Interesting that the banks and the Fed are now openly considered to be allies of the statists in both camps......That has long been the case.At least it is coming out into the open.
Note: ARCHIE still has not provided any factual, verifiable information from any reliable source to defend his Obama love, his Fed love, his War love, his Military Industrial Complex love, his Big Pharma love, his Big Ag love, his Big Medicine love, his Drone love, his destroy the Constitution love, his kick them when they're down love (gut my retirement,AND my SS, AND cost me my home And every drop of equity), etc. etc.
So, ARCHIE, you are saying you don't believe Jim' s government sources? What sources do you believe? ANY that are not statist and Obama "defenders" ? Got any independent or objective sources to fill in the "everyone knows ________________" blanks you post every time the burden of proof is upon you?
The Federal Reserve makes the rich richer and the poor poorer.
The Federal Reserve is a privately owned banking corporation run on greed by the elites.
Quantitative Easing doesn't work.
How Quantitative Easing Helps the Rich and Soaks the Rest of Us And why the Occupy movement should be up in arms.
How the Fed made the rich richer
The 'QE2' project was supposed to ease borrowing and get consumers to spend again. Instead, it has benefited only a few while raising most people's cost of living.
Katii, I think Archie may have a bad case of cognitive dissonance.
A distinct probability probability, Rebecca.
is trying to prove here....
We all know what just happened - we all just lived through it.
When Obama was sworn into office, the economy was collapsing all around us and we were sliding into another great depression. Obama, the Democratic Congress and the Fed acted aggressively to stop that from happening, and they succeeded.
It's not news, Kaptain, that the economy still sucks and we're not out of the woods yet. It was always going to be a long haul, friend.
Since the Conservatives took back the House of Representatives in 2010, they have blocked every single thing the President has tried to do to create jobs. And Mr. Obama has done everything that he can do to work around them, and has put millions of people back to work. We've gone from 13% unemployment to 7.8%, and that is something to celebrate. Anyone can put up crapp they pasted out of libertarian krank tanks all night long, but what's the purpose? To prove that we're not better off than we were 4 years ago? To prove that Obama didn't help us avoid a second great depression?
Didn't work for Mitt Romney, Kaptain, and it's not working fer you....
Who was saved after 2008? I was.
The whole country was.
You're talking to a bunch of bitter and twisted cranks who can't stand the fact that their guys Mitt Romney or Ron Paul didn't win. They spend most of their days posting bullet points, charts and blogs from their favourite right-wing websites while weeping into their keyboards over the fact that a black guy is still president.
The problem with All that garbage you posted, Archie, is that its garbage. Nothing you just said about Jim' s information is the truth. You, Archie, are just flat out lying. Pathetic.
CChristian, I'm not bitter that Ron Paul isn't President. Would America be better off if he were? Of course. SS would be fully funded, Eastwood end, liberties returned, and all that implies. All fantastic things, don't you agree? But I am very happy for Dr. Paul that he's not President. And I wasn't surprised nor hurt when he announced he was not going to actively campaign anymore.
What I'm angry about is that America is so full of willfully ignorant, stupid people who are so f'ing greedy and self- serving they make wall street bankers look like pussy cats that all they did was steal is your money!
"wars would end" (not Eastwood)
Saving government jobs isn't really saving real American's economy.
More are unemployed due to the poor economy on regular Main Street.
Congress just voted themselves a raise. Yeah, if we all could work for government, we'd be set, lol.
All Americans recently just got their smaller paycheck for the new year due to letting the payroll tax cut expire and the added SS security tax.
And, as Obamacare kicks in more companies are moving their full time employees to part time employees to avoid the mandatory health insurance coverage requirement that costs more than the insurance they were already providing. That means more people with lower wages that will need to go on the food card/stamp program just to survive. Obamaplan makes the poor get poorer.
I have a few friends in town that cannot afford the pay cuts. They are trying each to sell their own house. They need to go back to renting.
They have kids with medical issues. They can't afford what is happening.
my husband told me his company is about to lay off 700 workers.
tell me more about how the economy is doing well. Please.