I have waited to write about this until this weekend hoping that economists and responsible government officials could offer reasonable explanations. They have not!
The United States economy is in trouble and no one wants to talk about it!
The U.S. economy shrank by .1% in the last quarter of 2012. That number would not be too bad if it weren’t for the fact that the economy grew by 3.1% in the third quarter of the year. That is a change in direction of 3.2%. No one wants to admit the economy is in trouble. Instead all the talking heads and all the government leaders are talking up positive data. The reasoning appears to be “if we ignore the situation maybe it will go away. Let’s be positive.”
Some worthwhile points:
- Every wage earner saw his take home pay decrease by 2% thanks to the expired payroll tax holiday.
- Companies don’t expand and don’t hire when there is no demand for their products.
- The real unemployment rate is not publicized because it is too frightening for most people (especially those in government) to confront. It is the “Total unemployed…” from a monthly labor report in Table A-15 called U-6. The rate was 14.4% for January. The number has been unchanged for the past three months. This real unemployment rate peaked at 17.1% in October 2009. The historical typical rate has been between 7% and 8.5%.
- The United States must add more than 200,000 jobs a month to reduce the unemployment rate. 150,000 new jobs simply meets the requirements of the growing work force. This fact has been repeated on newscast after newscast. Thus 157,000 new jobs in January are not satisfactory.
- Housing prices may have leveled off but they are far from those that existed in 2007.
- Corporate profits are for the most part up and that has been great for those who have significant stock ownership. Most Americans consider themselves well off if they have a $200,000 in retirement savings. Government statistics indicate most families have $50,000 in savings. Most people are not major beneficiaries of the past year’s increased S&P 500.
- The coming sequestration or budget cuts will result in contractor and federal government employee layoffs. Both political parties seem to have settled on this event starting March 2013. There will be a cut of $85.4 billion of both defense and non-defense spending. That is the law that congress passed.
Our Congress needs to start developing solutions rather than arguing. Politics are destroying this nation.
Coast Contact 
I couldn’t agree with you more. In fact, since we must assume that those in our government know how to read, the real mission of our government is to crash our economy. Its clear for all to see, that austerity does not work, and we now have European countries and even Germany, stating that the last thing to do in a recession, as it just leads to a longer recession. They also state concern over the GOP and DEM support for ‘austerity’ measures here as it will have global impacts. So, again, it does appear to be that our government wants to send not only our economy into a ‘depression to rival the great depression’, but also the global economy. Just my thoughts