Over The Last 10 Years The U.S. Economy Has Grown At EXACTLY The Same Rate As It Did During The 1930s - Michael Snyder THE ECONOMIC COLLAPSE BLOG

Over The Last 10 Years The U.S. Economy Has Grown At EXACTLY The Same Rate As It Did During The 1930s Posted: 22 May 2017 Michael Snyder  THE ECONOMIC COLLAPSE BLOG Even though I write about our ongoing long-term economic collapse every day, I didn’t realize that things were this bad.  In this article, I am going to show you that the average rate of growth for the U.S. economy over the past 10 years is exactly equal to the average rate that the U.S. economy grew during the 1930s.  Perhaps this fact shouldn’t be that surprising, because we already knew that Barack Obama was the only president in the entire history of the United States not to have a single year when the economy grew by at least 3 percent.   Of course the mainstream media continues to push the perception that the U.S. economy is in “recovery mode”, but the truth is that this current era has far more in common with the Great Depression than it does with times of great economic prosperity. Earlier today I came across an article about President Trump’s new budget from Fox News, and in this article the author makes a startling claim… The hard fact is that the past decade’s $10 trillion in deficit spending has produced the worst economic growth as measured by Gross Domestic Product in our nation’s history.  You read that right, in the past decade our nation’s economy grew slower than even during the Great Depression. This stagnant, new normal, low-growth economy is leaving millions of working age people behind who have given up even trying to participate, and has led to a malaise where many doubt that the American dream is attainable. When I first read that, I thought that this claim could not possibly be true.  But I was curious, and so I looked up the numbers for myself. What I found was absolutely astounding. The following are U.S. GDP growth rates for every year during the 1930s… 1930: -8.5% 1931: -6.4% 1932: -12.9% 1933: -1.3% 1934: 10.8% 1935: 8.9% 1936: 12.9% 1937: 5.1% 1938: -3.3% 1939: 8.0% When you average all of those years together, you get an average rate of economic growth of 1.33 percent. That is really bad, but it is the kind of number that one would expect from “the Great Depression”. So then I looked up the numbers for the last ten years… 2007: 1.8% 2008: -0.3% 2009: -2.8% 2010: 2.5% 2011: 1.6% 2012: 2.2% 2013: 1.7% 2014: 2.4% 2015: 2.6% 2016: 1.6% When you average these years together, you get an average rate of economic growth of 1.33 percent. I thought that was a really strange coincidence, and so I pulled up my calculator and ran all of the numbers again and I got the exact same results. The 1930s certainly had more big ups and downs, but the average rate of economic growth during that decade was exactly the same as we have seen over the past 10 years. And of course the early 1940s turned out to be a boom time for the U.S. economy, while it appears that our rate of economic growth is actually slowing down.  As I noted yesterday, U.S. GDP growth during the first quarter of 2017 was just 0.7 percent. But you don’t hear any talk like this on the mainstream news, do you? Instead, they tell us that everything is just peachy. I often wonder what things would be like right now if Barack Obama and his minions in Congress had not added more than 9 trillion dollars to the national debt.  By stealing all of that money from future generations of Americans and spending it now, Obama was able to artificially prop up the U.S. economy.  If we were able to go back and remove 9 trillion dollars of government spending from the economy over the past 8 years, we would be in a rip-roaring economic depression right now.  For an extended analysis of this, please see my previous article entitled “The Shocking Truth About How Barack Obama Was Able To Prop Up The U.S. Economy”… But even though we have been adding more than a trillion dollars to the national debt each year, and even though the Federal Reserve pushed interest rates all the way to the floor during the Obama era, the U.S. economy has not grown by three percent or more on an annual basis since 2005. When you take an honest look at the numbers, there is no way that anyone can possibly claim that the U.S. economy is doing well.  The best that you can say is that we have been staving off a complete economic meltdown and another Great Depression, but of course the measures that our leaders have been taking to do this have just been making our long-term problems even worse. I feel bad for President Trump, because he has inherited the biggest economic mess in U.S. history.  When we finally reach the point when it is impossible to artificially prop up the U.S. economy any longer, he is going to get most of the blame, but he won’t deserve it. It is not going to be possible for Trump or anyone else to fix our system, because it was fundamentally flawed from the very beginning.  The Federal Reserve was designed to create an endless spiral of government debt, and since the day it was created the U.S. national debt has gotten more than 5000 times larger and the value of the U.S. dollar has declined by about 98 percent. If we truly want to fix the economy, the Federal Reserve must be abolished.  If I was President Trump, I would look to start issuing debt-free U.S. currency just like President Kennedy did in 1963 as soon as possible. In addition, we need to push tax rates as low as possible.  Personally, I would like to see the day when the personal income tax is completely eliminated and the IRS is shut down.  The greatest period of economic growth in all of U.S. history was when there was no income tax and no Federal Reserve.  America once thrived in such an environment, and I believe that we can do it again. Of course we need to also dramatically reduce the size and scope of the federal government.  Our founders intended to create a very limited federal government, but instead the left has just kept pushing to make it larger and larger. Businesses all over America are being strangled to death by mountains of federal regulations, and if we could just get the government off of their backs the business community could start thriving again.   There are quite a few government agencies that could be shut down entirely, and I think that the EPA would be a good place to start. Once upon a time the United States showed the world the power of free markets and capitalism, and if we want to make America great again, we should go back and do the things that made America great in the first place. But would the American people be willing to go down that path?

11 Facts That Prove That The U.S. Economy In 2017 Is In Far Worse Shape Than It Was In 2016 - Michael Snyder THE ECONOMIC COLLAPSE BLOG

11 Facts That Prove That The U.S. Economy In 2017 Is In Far Worse Shape Than It Was In 2016

Posted: 23 Apr 2017   Michael Snyder  THE ECONOMIC COLLAPSE BLOG

There is much debate about where the U.S. economy is ultimately heading, but what everybody should be able to agree on is that economic conditions are significantly worse this year than they were last year.  It is being projected that U.S. economic growth for the first quarter will be close to zero, thousands of retail stores are closing, factory output is falling, and restaurants and automakers have both fallen on very hard times. 

As economic activity has slowed down, commercial and consumer bankruptcies are both rising at rates that we have not seen since the last financial crisis.  Everywhere you look there are echoes of 2008, and yet most people still seem to be in denial about what is happening.  The following are 11 facts that prove that the U.S. economy in 2017 is in far worse shape than it was in 2016…

#1 It is being projected that there will be more than 8,000 retail store closings in the United States in 2017, and that will far surpass the former peak of 6,163 store closings that we witnessed in 2008.

#2 The number of retailers that have filed for bankruptcy so far in 2017 has already surpassed the total for the entire year of 2016.

#3 So far in 2017, an astounding 49 million square feet of retail space has closed down in the United States.  At this pace, approximately 147 million square feet will be shut down by the end of the year, and that would absolutely shatter the all-time record of 115 million square feet that was shut down in 2001.

#4 The Atlanta Fed’s GDP Now model is projecting that U.S. economic growth for the first quarter of 2017 will come in at just 0.5 percent.  If that pace continues for the rest of the year, it will be the worst year for U.S. economic growth since the last recession.

#5 Restaurants are experiencing their toughest stretch since the last recession, and in March things continued to get even worse…

Foot traffic at chain restaurants in March dropped 3.4% from a year ago. Menu prices couldn’t be increased enough to make up for it, and same-store sales fell 1.1%. The least bad region was the Western US, where sales inched up 1.2% year-over-year and traffic fell only 1.7%, according to TDn2K’s Restaurant Industry Snapshot. The worst was the NY-NJ Region, where sales plunged 4.6% and foot traffic 6.3%.
This comes after a dismal February, when foot traffic had dropped 5% year-over-year, and same-store sales 3.7%.

#6 In March, U.S. factory output declined at the fastest pace in more than two years.

#7 According to the Bureau of Labor Statistics, not a single person is employed in nearly one out of every five U.S. families.

#8 U.S. government revenues just suffered their biggest drop since the last recession.

#9 Nearly all of the big automakers reported disappointing sales in March, and dealer inventories have now risen to the highest level that we have seen since the last recession.

#10 Used vehicle prices are absolutely crashing, and subprime auto loan losses have shot up to the highest level that we have seen since the last recession.

#11 At this point, most U.S. consumers are completely tapped out.  According to CNN, almost six out of every ten Americans do not have enough money saved to even cover a $500 emergency expense.

Just like in 2008, debts are going bad at a very alarming pace.  In fact, things have already gotten so bad that the IMF has issued a major warning about it…

In America alone, bad debt held by companies could reach $4 trillion, “or almost a quarter of corporate assets considered,” according to the IMF. That debt “could undermine financial stability” if mishandled, the IMF says.
The percentage of “weak,” “vulnerable” or “challenged” debt held as assets by US firms has almost arrived at the same level it was right before the 2008 crisis.

We are seeing so many parallels to the last financial crisis, and many are hoping that our politicians in Washington can fix things before it is too late.

On Monday, the most critical week of Trump’s young presidency begins.  The administration will continue working on tax reform and a replacement for Obamacare, but of even greater importance is the fact that if a spending agreement is not passed by Friday a government shutdown will begin at the end of the week…

Trump has indicated that he wants to tackle the repeal and replacement of Obamacare and introduce his “massive” tax plan in the next week, all while a shutdown of parts of federal government looms Friday.
By attempting three massive political undertakings in one week, investors will have a sense of whether or not Trump will be able to deliver on pro-growth policies that would be beneficial for markets.
If Trump can pull off the trifecta, it could restore faith that policy proposals like tax cuts and infrastructure spending are on the way. If not, look out.

Members of Congress are returning from their extended two week spring vacation, and now they will only have four working days to get something done.

And I don’t believe that they will be able to rush something through in just four days.  The Republicans in Congress, the Democrats in Congress, and the Trump administration all want different things, and ironing out all of those differences is not going to be easy.

For example, the Trump administration is insisting on funding for a border wall, and the Democrats are saying no way.  The following comes from the Washington Post…

President Trump and his top aides applied new pressure Sunday on lawmakers to include money for a wall on the U.S.-Mexico border in a must-pass government funding bill, raising the possibility of a federal government shutdown this week.
In a pair of tweets, Trump attacked Democrats for opposing the wall and insisted that Mexico would pay for it “at a later date,” despite his repeated campaign promises not including that qualifier. And top administration officials appeared on Sunday morning news shows to press for wall funding, including White House budget director Mick Mulvaney, who said Trump might refuse to sign a spending bill that does not include any.

And of course the border wall is just one of a whole host of controversial issues that are standing in the way of an agreement.  Those that are suggesting that all of these issues will be resolved in less than 100 hours are being completely unrealistic.  And even though the Trump administration is putting on a brave face, the truth is that quiet preparations for a government shutdown have already begun.

The stage is being set for the kind of nightmare crisis that I portrayed in The Beginning Of The End.  The stock market bubble is showing signs of being ready to burst, and an extended government shutdown would be more than enough to push things over the edge.

Let us hope that this government shutdown is only for a limited period of time, because an extended shutdown could potentially be catastrophic.  In the end, either the Trump administration or the Democrats are going to have to give in on issues such as funding for Obamacare, the border wall, Planned Parenthood, defense spending increases, etc.

It will be a test of the wills, and it will be absolutely fascinating to see who buckles under the pressure first.

11 Quotes From Trump’s Speech To Congress That Show That The U.S. Economy Is In A State Of Collapse - Michael Snyder THE ECONOMIC COLLAPSE BLOG

11 Quotes From Trump’s Speech To Congress That Show That The U.S. Economy Is In A State Of Collapse Posted: 01 Mar 2017   Michael Snyder  THE ECONOMIC COLLAPSE BLOG After Tuesday night, nobody should have any more doubt that the U.S. economy has been in the process of collapsing.  Donald Trump’s speech to a joint session of Congress is being hailed as his best speech ever.  Even CNN’s Van Jones praised Trump, which shocked many observers.  Jones said that when Trump honored the widow of slain Navy Seal Ryan Owens that it “was one of the most extraordinary moments you have ever seen in American politics”, and Jones believes that Trump “became President of the United States in that moment”.   But Trump’s speech is not just being praised for that one moment.  He detailed many of the most important problems that our nation is facing, and he explained his prescription for addressing those problems. Hopefully Trump’s words helped people to understand that our problems did not get fixed just because he got elected.  It is going to take extraordinary action to fix those problems, because our problems run very deep.  In particular, Trump made an exceedingly strong case that the U.S. economy has been badly deteriorating for a very long period of time.  The following are 11 quotes from Trump’s speech to Congress that show that the U.S. economy is in a state of collapse… #1 “Ninety-four million Americans are out of the labor force” #2 “Over 43 million people are now living in poverty” #3 “Over 43 million Americans are on food stamps” #4 “More than one in five people in their prime working years are not working” #5 “We have the worst financial recovery in 65 years” #6 “In the last eight years, the past administration has put on more new debt than nearly all of the other Presidents combined” #7 “We’ve lost more than one-fourth of our manufacturing jobs since NAFTA was approved” #8 “We’ve lost 60,000 factories since China joined the World Trade Organization in 2001″ #9 “Our trade deficit in goods with the world last year was nearly 800 billion dollars” #10 “Obamacare premiums nationwide have increased by double and triple digits. As an example, Arizona went up 116 percent last year alone.” #11  “We’ve spent trillions and trillions of dollars overseas, while our infrastructure at home has so badly crumbled” All of these quotes come from the transcript of the speech that was posted on the official White House website. So many of the economic themes that Trump touched on are things that I have been writing about recently.  For example, I recently published an article entitled “11 Deeply Alarming Facts About America’s Crumbling Infrastructure” in which I discussed the horrific state of our roads, bridges, ports, dams, water systems and airports.  I greatly applaud Trump for wanting to do something about this growing national crisis, but I just don’t know where the money is going to come from. Just over a week ago I also wrote a major article about Obamacare.  We have zero hope of turning our economy in a positive direction until we do something to fix our dramatically failing healthcare system, but at the moment Republicans in Congress seem extremely hesitant to take action.  Instead, many Republican leaders are now talking about trying to “fix Obamacare“, and that simply is not going to work. You can’t “fix” a steaming pile of garbage. All of the other facts that Trump listed about the economy were right on point too.  I have been screaming for seven years about our nightmarish trade deficit and the fact that tens of thousands of businesses and millions of good paying jobs were leaving the country.  It is refreshing to finally have a president that understands how badly America has been hurt by imbalanced trade agreements, and my hope is that he will start to take constructive action in this regard. So much damage to the economy has already been done, and there are all kinds of indications that we are about to officially slide into yet another recession.  Yesterday we learned that the number of “distressed retailers” in this country is the highest that it has been since the last recession, and in recent weeks major retailers across the nation have announced the closing of hundreds of stores.   Lending standards are tightening, bankruptcies are rising, and employment growth at companies listed on the S&P 500 has gone negative for the first time since the last recession. It is being projected that GDP growth for the first quarter of 2017 will be barely above zero, but it wouldn’t surprise me at all if we actually had a negative reading. If we indeed are heading into a new recession, Trump and his supporters need it to happen as soon as possible so that they can blame it on Obama.  If a recession begins a year from now, everyone will blame it on Trump even if it is not his fault.  But if a recession begins now, Trump and his supporters can pin responsibility for it on Obama and then take credit if and when a recovery occurs. Trump’s speech on Tuesday night was very optimistic, and he seemed quite confident that every issue that we are facing as a nation can be fixed… Everything that is broken in our country can be fixed. Every problem can be solved. And every hurting family can find healing and hope. I hope that Trump is right, but I also know that the federal government is already 20 trillion dollars in debt, U.S. consumers are already more than 12 trillion dollars in debt, and corporate debt has approximately doubled since the last financial crisis. You can’t squeeze blood out of an apple, and you can’t get out of a debt bubble by going into a lot more debt. I understand that there are so many people out there right now that are deeply optimistic about the future, but the truth is that we have no hope of a positive future unless we fundamentally change our ways as a nation.  I wish that someone could show me evidence that this is happening, because I would be very glad to see it.  As it stands, we continue to steamroll toward the kind of apocalyptic future for this country that I have been warning about for a very long time. It will take a lot more than words to fix America, and I think that Donald Trump understands this. Hopefully many of his followers will start to get the message as well.

Recession 2017? Things Are Happening That Usually Never Happen Unless A New Recession Is Beginning - Michael Snyder THE ECONOMIC COLLAPSE BLOG

Recession 2017? Things Are Happening That Usually Never Happen Unless A New Recession Is Beginning

Posted: 08 Feb 2017   Michael Snyder  THE ECONOMIC COLLAPSE BLOG

Is the U.S. economy about to get slammed by a major recession?  According to Gallup, U.S. economic confidence has soared to the highest level ever recorded, but meanwhile a whole host of key economic indicators are absolutely screaming that a new recession is beginning.  And if the U.S. economy does officially enter recession territory in 2017, it certainly won’t be a shock, because the truth is that we are well overdue for one. 

Donald Trump has inherited quite an economic mess from Barack Obama, and it was probably inevitable that we were headed for a significant economic downturn no matter who won the election.

One of the key indicators to watch is average weekly hours.  When the economy shifts into recession mode, employers tend to start cutting back hours, and that is happening right now.  In fact, as Graham Summers has pointed out, we just witnessed the largest percentage decline in average weekly hours since the recession of 2008…

In addition to the decline in hours, Summers has suggested that there are a number of other reasons to believe that a new recession is here…

The fact is that the GDP growth of 4%-5% is not just around the corner. The US most likely slid into recession in the last three months. GDP growth collapsed in 4Q16, with a large portion of the “growth” coming from accounting gimmicks.
Consider the following:

• Tax receipts indicate the US is in recession.
• Gross private domestic investment indicates were are in a recession.
• Retailers are showing that the US consumer is tapped out (see AMZN’s recent miss).
• UPS, another economic bellweather, dramatically lowered 2017 forecasts.

To me, even more alarming is the tightening of lending standards.  In our debt-based economy, the flow of credit is absolutely critical to economic growth, and when credit starts to get tight that almost always leads to a recession.

So the fact that lending standards have now tightened for medium and large sized firms for six quarters in a row is very bad news.  The following comes from Business Insider…

“Although modest over the past couple of quarters, it is still worth noting that this is now the sixth quarter in succession that standards have tightened for large and medium sized firms,” Deutsche Bank economist Jim Reid wrote in a research note to clients.
“This usually only happens in recessions.”

Reid is 100 percent correct on this point.  This is precisely the kind of thing that we would expect to see if a new recession was beginning, and if this trend continues it is hard to imagine that the U.S. economy will be able to continue to grow.

And it is interesting to note that job growth at S&P 500 companies has gone negative for the first time since the last recession, and so large firms are definitely starting to feel the pressure.

Simultaneously, lending standards are also tightening up for consumers…

“The most notable tightening in standards though was in consumer loans,” the Fed said. “During the quarter, banks reported an 8.3% net tightening in credit standards for credit cards and 11.6% net tightening for auto loans.”
US consumer spending accounts for more than two-thirds of economic activity and is thus a key driver of growth in the world’s largest economy.

Those numbers for credit cards and auto loans are major red flags.

It is very simple.  Tighter credit means less economic activity which means slower economic growth.  The U.S. economy grew at a dismal 1.9 percent annual rate during the 4th quarter of 2016, and it would be absolutely no surprise if we end up with a negative number for the first quarter of 2017.

One of the big reasons why lending standards are tightening is because bankruptcies are rising.

As I reported the other day, consumer bankruptcies just rose on a year-over-year basis in back to back months for the first time in almost seven years.  Commercial bankruptcies had already been rising on a year-over-year basis throughout 2016, and so the fact that consumer bankruptcies have now joined the party is a very bad sign.

And we have also just learned that real median household income declined in 2016…

Its official! The spectacular Obama/Fed “recovery” produced no increase in real medin household income in 2016 (the last year of Obama’s reign of [economic] error). In fact, real median annual household income in December 2016 ($57,827) was 0.9 percent lower than in December 2015 ($58,356).

Yes, I understand that there is a tremendous amount of optimism out there right now because of Donald Trump.

But the truth is that it is literally going to take some sort of an economic miracle to avoid a recession.

And if a recession is going to happen anyway, the Trump administration should want it to occur as quickly as possible.

You see, if a recession starts a year from now, it will be much more difficult for Trump to blame it on Obama.  But if a recession starts right now, he will definitely be able to argue that it happened because of the mess that he inherited from the last administration.

In addition, the sooner the next recession ends the sooner the next recovery can begin.  If a recession is still going on during the 2020 campaign, that would be really bad for Trump, but if a recovery is well underway by then that would be really good for his chances.
If you doubt this, just go back and look at the 1984 campaign.  After a very difficult recession, the U.S. economy bounced back strongly and Ronald Reagan was able to ride that momentum to an easy victory.

So this may sound very strange to many of you, but the truth is that if a new recession is coming Trump supporters should want it to happen as rapidly as possible.

Unfortunately, once a new recession begins it may not play out like recessions normally do.

The U.S. government is 20 trillion dollars in debt, we are in the midst of one of the biggest stock market bubbles in history, and our planet is becoming more unstable with each passing day.  So even though Trump is in the White House and Obama is gone, let there be no doubt that a catastrophic economic crisis could literally erupt at any moment.  I continue to encourage my readers to do all that they can to get prepared, because those that are prepared in advance will have the best chance of successfully getting through what is coming.

Unfortunately, a lot of people out there seem to believe that all of our problems have somehow evaporated just because Donald Trump is now living in the White House.
That is simply not true, and we all need to be praying for guidance and wisdom for Trump and his team as they prepare to deal with the great challenges that are ahead for our nation.

Why Are Wal-Mart And Boeing Laying Off Workers If The U.S. Economy Is In Good Shape? - Michael Snyder THE ECONOMIC COLLAPSE BLOG

Why Are Wal-Mart And Boeing Laying Off Workers If The U.S. Economy Is In Good Shape?

Posted: 11 Jan 2017  Michael Snyder  THE ECONOMIC COLLAPSE BLOG

The stock market has been on quite a roll in recent weeks, but signs of trouble continue to plague the real economy.  Earlier this week, I talked about the “retail apocalypse” that is sweeping America.  Major retail chains such as Sears and Macy’s are closing stores and laying off workers, but I didn’t think that Wal-Mart would be feeling the pain as well. 

Unfortunately, that is precisely what is happening.  USA Today is reporting that approximately 1,000 jobs will be cut at Wal-Mart’s corporate headquarters in Bentonville, Arkansas by the end of this month…

Walmart’s plan to lay off of hundreds of employees is the latest ripple in a wave of job cuts and store closures that are roiling the retail industry.
The world’s largest retailer is cutting roughly 1,000 jobs at its corporate headquarters in Bentonville, Ark., later this month, according to a person familiar with the matter who was not authorized to speak about it.

The company is saying that these cuts are necessary because Wal-Mart is always “looking for ways to operate more efficiently and effectively“.  But something doesn’t smell right here.  You don’t get rid of 1,000 employees at your corporate headquarters if everything is just fine.

I have driven past Wal-Mart’s headquarters in Bentonville a number of times, and it is in a beautiful part of the country.  Bentonville and the surrounding areas had been booming, but it looks like times may be changing.

Meanwhile, there are signs of trouble out on the west coast as well.  The Los Angeles Times is reporting that there is going to be a new round of engineering job cuts at Boeing…

Boeing Co. has internally announced a new round of employee buyouts for engineers companywide, including in Southern California, and warned that layoff notices will follow later this month to engineers in Washington state, where the company has a large presence.
Management did not cite a target for the number of projected job cuts.
The news comes after company Vice Chairman Ray Conner and the new chief executive of Boeing Commercial Airplanes, or BCA, Kevin McAllister, warned in December of the need to aim for further cuts in 2017.

And according to Boeing spokesperson Doug Alder, similar job cut announcements are coming for other classes of workers as well.

So why is Boeing getting rid of so many employees?

Well, the truth is that Boeing’s business is way down.  The following comes from Wolf Richter…

Business has been tough. In 2016, deliveries fell by 14 jets from a year ago, to 748. Net orders dropped 13% from an already rotten level in 2015, to just 668, down 53% from 2014. And the lowest level since 2010!

When the economy is doing well, air traffic tends to rise, and when the economy is doing poorly it tends to go down.

Needless to say, the fact that Boeing is doing so poorly does not bode well for the future.
In addition to Wal-Mart, another major retailer that is letting people go is Petco…

Petco is cutting 180 positions with about 50 at its San Diego headquarters, the pet supply retailer confirmed Wednesday.
The company made the cuts across its workforce and include both existing and open positions.
Petco has about 650 workers at its headquarters in Rancho Bernardo. It employs 27,000 in the U.S.

My wife and I have three cats, and even though Petco tends to be a bit overpriced we have always appreciated the work that they do.

Unfortunately, when the economy gets tough spending on pets tends to be one of the first things to get cut back, and this current trouble at Petco could be a sign that rough sledding is ahead for the entire economy.

Of course your personal perspective on these things is likely to be very heavily influenced by your immediate surroundings.  Those that live in wealthy enclaves of major cities such as San Francisco, New York City or Washington D.C. may be wondering how anyone could possibly be talking about economic trouble right now.

But if you live in economically depressed areas of Appalachia or the upper Midwest, it may seem like the last economic recession never even ended.

There have been pockets of economic prosperity in recent years, and this has resulted in some people becoming exceedingly wealthy.  Meanwhile, things have just continued to become even tougher for millions of other families as the cost of living always seems to grow faster than their paychecks do.

If you are in the top one percent of all income earners, maybe to you it seems like things have never been better.  But most of the country is living paycheck to paycheck and is just struggling to survive from month to month.  The following comes from CNN…

The rich are money-making machines. Today, the top mega wealthy — the top 1% — earn an average of $1.3 million a year. It’s more than three times as much as the 1980s, when the rich “only” made $428,000, on average, according to economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman.
Meanwhile, the bottom 50% of the American population earned an average of $16,000 in pre-tax income in 1980. That hasn’t changed in over three decades.

The workers being laid off at the companies discussed above are real people with real hopes and real dreams.  Perhaps many of them will be able to land other employment fairly soon, but the truth is that the job market is really tough in many areas of the country right now.
Finding a good job that will allow you to pay the bills and support your family is not easy.  You may find that out the hard way if you end up losing your current job during the economic troubles that will come in 2017.

Earlier today, I came across an excellent article by Gail Tverberg that detailed a whole bunch of reasons why a significant economic downturn appears to be imminent in 2017.  If you would like to read it, you can find it here.  She points to many of the same things that I have been pointing to for a very long time.

Even though economic conditions were fairly stable throughout 2016, our long-term problems just continued to get even worse.  So the truth is that we are more primed for a major crisis today than we have been at any point since the last recession.

My hope is that things will not be nearly as bad in 2017 as Gail Tverberg and others are projecting that they could be, but the warning signs are definitely there, and it isn’t going to take much to push the U.S. economy off the rails.

The Shocking Truth About How Barack Obama Was Able To Prop Up The U.S. Economy - Michael Snyder THE ECONOMIC COLLAPSE BLOG

The Shocking Truth About How Barack Obama Was Able To Prop Up The U.S. Economy

Posted: 02 Dec 2016  Michael Snyder  THE ECONOMIC COLLAPSE BLOG

Barack Obama is one of the biggest “Keynesians” of all time, but unfortunately most Americans don’t even understand what that means.  In this article, I am going to share with you the primary reason why Barack Obama has been able to prop up the U.S. economy over the past eight years.  If Barack Obama had not taken the extreme measures that he did, we would be in the midst of a historic economic depression right now.  But by propping things up in the short-term, he has absolutely demolished our long-term economic future. 

But like most politicians, Obama has been willing to sacrifice the future for short-term political gain.

If you take any basic college course in economics, you are going to learn about John Maynard Keynes.  Without a doubt, Keynes was one of the most famous economists of the 20th century, and one of the things that he believed was that governments should go into debt and spend more money when an economic downturn strikes.  By injecting additional funds into the economy during a time of crisis, he believed that the severity of recessions and depressions could be reduced.  This approach ultimately become known as “Keynesian economics”, and in the post-World War II era virtually the entire world embraced it at least to some degree.  Here is more on Keynes from Investopedia…

An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed by the British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression. Keynes advocated increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the Depression. Subsequently, the term “Keynesian economics” was used to refer to the concept that optimal economic performance could be achieved – and economic slumps prevented – by influencing aggregate demand through activist stabilization and economic intervention policies by the government. Keynesian economics is considered to be a “demand-side” theory that focuses on changes in the economy over the short run.

Keynesian economists correctly point out that there is a “multiplier effect” to government spending.  In other words, when the government spends money it ends up in the hands of ordinary people.  In turn, those people spend that money on various goods and services that they need, thus boosting overall economic activity.  And the more the money circulates, the more the economy is stimulated.  So one dollar of additional government spending does not just add one dollar to GDP.  Rather, the impact on GDP is often significantly greater than that.

Of course the bad news is that whenever the government borrows money it is stealing consumption from the future.  So we are literally destroying the future that our children and our grandchildren were supposed to have in order to make the present look a little bit brighter.

When Barack Obama entered the White House, the U.S. was in the midst of the worst financial crisis since the Great Depression.  The Bush administration had already begun to ramp up spending, but Barack Obama took “government stimulus” to ridiculous new levels.  The national debt has risen by an average of more than 1.1 trillion dollars a year while Obama has been in charge, and this fiscal year we are on pace to add more than 2 trillion dollars to the debt.

At this moment, the U.S. national debt is a whopping $19,901,545,151,126.51, and it will cross the 20 trillion dollar mark by the time Donald Trump is inaugurated on January 20th.
But when Barack Obama was inaugurated, the national debt was only 10.6 trillion dollars.  That means that we have added about 9.3 trillion dollars to the debt since that time.
So we have borrowed and spent 9.3 trillion dollars under Obama that we did not have.  But because of the “multiplier effect”, that 9.3 trillion dollars actually had a far greater impact on the U.S. economy.

Let’s be conservative and just double that number.  So that would give us an 18.6 trillion dollar overall impact on U.S. economic activity.  Spread over eight years, that comes to an average GDP impact of 2.325 trillion dollars a year.

But over the last eight years U.S. GDP has only been averaging about 16 trillion dollars a year.  So if you took away 2.3 trillion dollars a year, that would be about one-eighth of our entire economy.

In other words, without all of this debt that Barack Obama and Congress have been getting us into, we would be in the worst economic depression in U.S. history right now.
And I haven’t even factored in state and local government debt, corporate debt or household debt.  The truth is that I am not exaggerating one bit when I say that we are enjoying a debt-fueled standard of living that we simply do not deserve.

But even with all of this debt, the U.S. economy has still not been performing really well.  In fact, Barack Obama is going to be the only president in U.S. history to not have a single year when U.S. GDP grew by at least three percent.

Despite what many in the mainstream media are telling you, the reality of the matter is that Donald Trump is going to inherit an economy that is deeply troubled.  If you doubt this, please see my previous article entitled “11 Very Depressing Economic Realities That Donald Trump Will Inherit From Barack Obama“.

Donald Trump is talking about cutting taxes and reducing regulations, and all of those things are good, but ultimately those measures are not going to matter that much.

What is going to matter is what Donald Trump decides to do about our exploding debt.
If Donald Trump wants the U.S. economy to continue to remain at least somewhat stable in the short-term, he is going to have to keep piling up debt like Obama has.  Because if Trump and the Republicans decide that they want to get our debt under control, that will plunge us into a horrifying economic depression almost immediately.

But if Donald Trump continues to steal money from future generations of Americans at the same pace that Barack Obama has been doing, he will literally be destroying the future of America.  It will be a crime on a scale that is almost beyond words, and if they get a chance to do it, future generations of Americans will look back and curse him for what he has done to us.

So Donald Trump is really in a no-win situation when it comes to the economy.

The only way that he can match Obama’s performance is to do what Obama did, but by doing so he would literally be killing the future.

As a nation we have been consuming far more wealth than we produce for a very, very long time, and the only way that we have been able to do this is because we have been able to go into so much debt.

But now a day of reckoning is fast approaching, and I am not sure if Donald Trump even realizes that he will soon be faced with some incredibly heartbreaking choices.