Posted on 06/27/2012 2:52:07 AM PDT by TigerLikesRooster
We Are Living in a ‘Modern-Day Depression’: David Rosenberg
By Aaron Task | Daily Ticker – Mon, Jun 25, 2012 8:13 AM EDT
The Federal Reserve cut its growth forecast for the second half of 2012 and 2013 last week, raising concerns yet again about the potential for a "double-dip" recession. While some, notably the cycle watchers at ECRI, believe the U.S. economy is definitely heading for another recession (or already there), Gluskin Sheff's chief economist and strategist David Rosenberg goes a big step further.
"We are living in a modern-day depression," he declares. This dramatic statement is based on several factors, including the record number of Americans living on Food Stamps — 46 million or 1-in-7 in 2011. Because these benefits are now given in the form of electronic debit cards, we don't have bread lines like in the 1930s, but they are there in virtual form. And that's just the most obvious form of government support for its struggling citizenry. (See: Marion Nestle on The (Big) Business of Food Stamps: "Here's Where the Profits Come In")
"Government transfers to the personal sector now makes up nearly one-fifth of total household income," Rosenberg writes. "Even Lyndon Johnson, architect of the 'Great Society', would blush at that."
(Excerpt) Read more at finance.yahoo.com ...
“Though the numbers were what they were, much of it wasn’t real. “
You’re right, although saying so isn’t going to be popular.
In California in particular, the boom of the 2000s was equal to the amount of home equity withdrawal. It was a personal debt fueled boom.
Everyone here in SoCal thought their house had become an income generating machine.
House prices went up every year and my fellow Californians, displaying the sophistication of a Cargo Cult, knew that this would never come to an end. Since your house would always be worth more next year you would never have to pay the money back.
And while it’s mildly amusing to remember that that is what millions believed, you really have to marvel at the lenders who bought into it too.
And to think:
The Food Stamp Program, administered by the U.S. Department of Agriculture, is actually proud of the fact it is distributing the greatest amount of free meals and food stamps ever.
Meanwhile, the National Park Service, administered by the U.S. Department of the Interior, asks us to “Please Do Not Feed the Animals.”
The stated reason for the policy is because the animals soon grow dependent on handouts, forget how to fend for themselves, and starve to death if nobody is there to feed them.
This ends today’s lesson.
Everybody in a position of authority was making big money and believed there would be no consequences for screwing up.
Always enjoy Rosenberg’s commentary.
Used to get it every day for free but now he’s charging a grand a year which was a bit pricey for me.
“Everybody in a position of authority was making big money and believed there would be no consequences for screwing up.”
That’s right. The guys at the top didn’t want to hear any negativity from their risk officers, the size of the money coming in overwhelmed their good sense.
I never believed things were as great as the government claimed under Bush but things were FAR better than now. There were millions more people producing and millions fewer living on government handouts. It is amazing how some people can persist in the insane folly that consumption drives economies. Those of us who grew up working our tails off on a little family farm know that the only thing that keeps things going is PRODUCTION. Any fool can consume but when consumption exceeds production then you have modern day America and if this ain’t a depression then sugar ain’t sweet and skunks don’t stink.
I read a couple of books on the mortgage “crisis”.
California: high school dropouts working in a car wash were given three days of training and became mortgage brokers making 10 grand a month.
I agree 100%. Too many people are clueless. They just aren’t paying attention.
“California: high school dropouts working in a car wash were given three days of training and became mortgage brokers making 10 grand a month”
All true, I knew a few of them. It was easier to become a mortgage broker than a barber. And they really were pulling in that kind of money, if not more.
Thank you, RipSawyer
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