The contrast between what we see in our every day lives is not consistent with what government tells us is happening in the economy. The so-called recovery certainly doesn’t feel like one; it is certainly unlike any of the others over the last 50 or so years. If inflation is not a problem, one can only wonder how government obtains their numbers. Apparently they exclude or weight insignificantly what we must buy every week, like food and gasoline. We are told that the unemployment rate is going down but that is inconsistent with what we see and hear from neighbors. How can that be when labor force participation rates are at recent record lows? How does one reconcile record-setting food stamp payments with a prospering economy?
If these are some of the contradictions you wrestle with, it is likely you believe what government is telling you. That is always dangerous, but especially so now when we approach an almost certain economic apocalypse.
The economic disaster in Europe produced political upheaval in their recent elections. These changes will likely only hasten the implosion of the Eurozone and the Euro and the inevitable economic collapse over there. Similar changes, both politically and economically, lie ahead for America, although likely not quite as soon as Europe.
The US government is responsible for putting this country in jeopardy. For the past fifty years they have attempted to manage the economy with tools that are both inflationary and price distorting. Each downturn in the economy has needed larger interventions to correct. All of these interventions have been done in an attempt to cover up problems caused by prior interventions.
Now the country nears its breaking point. Prior interventions have created such distortions that the economy is no longer functional, at least in a productive fashion. Additional interventions will only compound problems and they are not likely possible because government is out of resources (fortunately). Meanwhile the misallocations and distortions in the economy continue to percolate behind the scenes. There can be no recovery until the economy purges itself of these cancers. Yet that is exactly what each government intervention over the last fifty years was designed to prevent.
Government has exhausted its supply of false magic. All that is left is lying. That is why reality does not conform with the data — the data are false. There is nothing else left for government to do but fudge numbers. They have exhausted all other options. Actually, they still have one more option which they may or may not use. That is the “printing money” option that Bernanke has threatened and also withdrawn. When matters truly become desperate, I expect him to use that option.
James Quinn provides a “take-no-prisoners” article dealing with the fantasy of government data and how our decline is at least forty years old. We have had ups and downs along the way, but all have been within a secular decline.
Here is one of Mr. Quinn’s observations on the fraud that Washington attempts to paint as a recovery:
It divulges the extent to which Ben Bernanke and the politicians in Washington DC have gone to paint the U.S. economy with the appearance of recovery while wrecking the lives of senior citizens and judicious savers. Only a banker would bask in the glory of absconding with hundreds of billions from senior citizen savers and handing it over to criminal bankers. Only a government bureaucrat would classify trillions in entitlement transfers siphoned from the paychecks of the 58.4% of working age Americans with a job or borrowed from foreigner countries as personal income to the non-producing recipients. How can taking money from one person or borrowing it from future generations and dispensing it to another person be considered personal income?
Mr. Quinn discusses the deception and changes that occurred in this country over the decades:
Money taken from workers and investors and transferred to the non-working and spenders is NOT INCOME. It is just redistribution from producers to non-producers. The key takeaways from the chart [see his article for chart] are:
- Working at a job generated two-thirds of personal income in 1970 and barely half today. This explains why only half of Americans pay Federal taxes.
- One might wonder how we could be in the third year of a supposed economic
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