The economic frustration of the American people is reaching a fever pitch. Millions of Americans can’t seem to get a good job no matter what they do. Millions of others are working as hard as they can but find that they keep coming up short at the end of the month.
Record numbers of Americans are still going bankrupt. Record numbers of Americans are still losing their homes. Meanwhile, the U.S. economy is a dead horse at this point. It just doesn’t have any more to give.
At this point the U.S. economy is like an ageing rock star that requires larger and larger doses of drugs each night just to be able to perform. The U.S. economy is addicted to “drugs” such as debt and government stimulus, and years ago those things really supercharged the U.S. economic system, but at this point they aren’t provoking much of a response at all. In fact, the things that once “stimulated” the economy are now slowly killing it. But the vast majority of the American people do not understand this. All they know is that the economy is broken and they want someone to “fix” it.
For most Americans, all we have ever known is tremendous prosperity. All our lives we have been taught that America is the richest and most prosperous nation on the planet, and that while there will always be times of “recession”, things will always bounce back and be better than ever before.
But this time things aren’t bouncing back.
And Americans are starting to become extremely frustrated.
A couple of quotes that appeared in a recent article in The New York Daily News really embodied the growing frustration that so many are feeling at this point….
“My husband and I are fortunate to be able to move in with my 81-year-old mother-in-law. But how sad is that? I apply for jobs and nothing happens,” writes Gayle Hanson. “Who wants to hire a 59-year-old woman? My answer is nobody. [I] have years of experience, excellent references. And nothing to show for it.”
“I am soon to be 57 and considered too old, too expensive, etc. I can’t get an employer to hire me at any salary,” writes Mike Stiller. “I am BOILING MAD.”
But Gayle Hanson and Mike Stiller are far from alone.
Millions upon millions of Americans are “boiling mad” about the economy at this point.
The truth is that the United States has lost 10.5 million jobs since 2007. Many of those jobs have been shipped off to countries like China and India where labour is much cheaper and they are never coming back.
There just are not enough jobs for everyone in America at this point. The number of “chronically unemployed” has been rising at a frightening pace. In fact, the average duration of unemployment in the United States has risen to an all-time high.
If you have never been unemployed and unable to find a job, then you just don’t know how soul crushing it can be. This is especially true when you have a family to support.
Right now, there are 9.2 million Americans that are unemployed but are not even receiving an unemployment insurance check. It is easy to tell those unemployed workers that they should “get a job”, but as the chart below shows, the gap between the number of unemployed workers and the number of job openings has increased dramatically over the last couple of years….
But in this economy, even many of those who do have jobs are still struggling mightily. According to a poll taken in 2009, 61 per cent of Americans “always or usually” live paycheck to paycheck. That was up significantly from 49 per cent in 2008 and 43 per cent in 2007.
And Americans are still losing their homes in record numbers. Banks repossessed an average of 4,000 south Florida properties a month in the first half of 2010, which was up 83 per cent from the first half of 2009.
Meanwhile, demand for homes is dropping through the floor. The Mortgage Bankers Association announced on Wednesday that demand for loans to purchase U.S. homes sunk to a 13 year low last week, and refinancing demand also plummeted despite near record-low mortgage rates.
So considering all of these statistics, is it any wonder why so many Americans are so pessimistic?
According to a recent poll conducted by Bloomberg, 71% of Americans say that it still feels like the economy is in a recession.
But the truth is that we haven’t seen anything yet.
Things are going to get much worse.
Already, Federal Reserve policymakers are discussing what steps they might take to stimulate economic activity “if the outlook were to worsen appreciably”.
So can more economic stimulus help?
To a limited extent.
The Federal Reserve and the U.S. government will likely try to inject more debt and more “economic stimulus” into the system to try to shock the economy back to life.
But the more debt the U.S. government takes on the worse our long-term problems are going to get.
The reality is that the U.S. economic system is broken, and there is simply not any “quick fix” that is available that is going to get things back to normal.
So on an individual level, what should we all do?
Well, we all need to start becoming a lot less dependent on the system.
We should all consider how we can start our own businesses, grow our own food and trade within our own communities.
If the entire system is starting to break down, it is those who are the least dependent on the system that will have the best chance to prosper during the times ahead.
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