Tue Jun 26, 2012, 08:54 AM
IamK (956 posts)
We Are Living in a ‘Modern-Day Depression’:
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."
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Response to IamK (Original post)
Tue Jun 26, 2012, 09:16 AM
magical thyme (5,710 posts)
2. meh. without detail, it means little
"Government transfers to the personal sector now makes up nearly one-fifth of total household income," Rosenberg writes.
^^^Does that include the earned benefits of social security and medicare? Or strictly aid to the struggling?
He cites the "real" unemployment rate — currently 14.8% -- and the fact the country is still down 5 million jobs from its 2007 peak.
^^^he also ignores how incredibly depressed wages are. I know I've gone from peak earnings in the late 90s back to an hourly rate I made in the mid-80s, plus only have part time work which is now being cut back. That's after 10 years of more off than on employment -- at one point my wages were back to my early-80s hourly rate.
Growth is "pathetic" given the "gargantuan" support the federal government and Federal Reserve have provided, he declares, noting this is not a U.S.-only phenomenon.
^^^^ He implies that the support was appropriate in size and direction; that is directed in a way that actually would help restart and maintain demand, versus support to banks that ended up in the banksters offshore accounts. When, according to the leading economic prognisticator according to Bloomberg, Paul Krugman, practically begged for double the stimulus that was asked for, and begged that it be directed toward the middle and bottom where it was needed and would be spent.
He also ignores the plight of students burdened with loans that can't be paid back at current salaries, and that will likely never be paid back.
My current low wages are after going back to school to retrain in healthcare, which was supposed to be growing, but is shrinking here, and where I was lied to about the starting salary by the local hospital's HR rep. So I have my mid-80s hourly rate, part time and burdened with student loans at 6.8%. (Which reminds me, where are those cuts from 6.8% to 3.4% that supposedly happened between 2007 and now? Because my stafford loans were between 08-11, but are all at 6.8%.)
Response to IamK (Original post)
Tue Jun 26, 2012, 10:03 AM
cbrer (1,831 posts)
3. And then what happens?
Not only does this story lack relevant specifics, but it forecasts nothing. Understandable under the circumstances. The future if our nation can be powerfully influenced by our population if they decide to get involved. Using the current pattern, we're economically, environmentally, and socially doomed.
But we'll have a huge military!
''Power concedes nothing without a demand. It never did and it never will. Find out just what any people will quietly submit to and you have found out the exact measure of injustice and wrong which will be imposed upon them, and these will continue till they are resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress.''