That’s a great post. The linked article contains plenty of unique information. We can read it and decide for ourselves.
Here’s a repost of one of my comments: quick and dirty cause and effect notes. This is what eventually happens without a manufacturing base adequate for providing government revenues. Notice the circular nature of the downward spiral.
We saw that new unemployment claims for a couple of recent weeks were nearly half a million each. Government will spend more on social programs as a result, which prompts government to borrow more money.
When the deficit goes high enough to cause investor fears of risk, investors demand higher yields. Interest rates are hiked for the purpose of selling more bonds.
Rising interest rates, which cause deficits to rise more, which cause interest rates to rise, and so on. Less borrowing by businesses and consumers, resulting in decreasing tax revenues, stock market declines and more unemployment. Government borrows more. Interest rates rise.
The government cannot simply pull itself again by firing up the money “printing presses,” as it did in the past. That would require a healthy enough manufacturing base to provide revenues with value based on products. Without it, such excess money is worthless.
Eventually, the government will be forced to make deep cuts in spending: huge numbers of jobs. The economic crash would continue more drastically from there.
On unemployment numbers—Freepers may be interested to know that the most publicized unemployment number (currently 9.7% I believe) does not include all folks collecting unemployment insurance.
Yeah, they forgot to tell you that.
The figure only includes people collecting unemployment under the normal state rules, and does not include folks covered by the extensions passed by Congress.
The Bureau of Labor Statistics could argue that this is an “apples to apples” comparison to periods before the extensions existed—and they have a point.
But the new reality in the Obama economy is that folks have been and will continue to be unemployed for years—and the numbers are hiding that. For the foreseeable future there will be many millions of unemployed not reflected in that figure—and of course that dosen’t include the underemployed, the self-employed with substantially lower income, etc.
I fear you are right.