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Why This Depression Will Be Known As The Greatest Depression
Probably the last thing regular readers of this website need is additional evidence supporting the coming governmental and economic collapse. I apologize for yet another article on this topic, but newer readers need to understand what is coming and do what they can to protect themselves.
Government default is inevitable and with it another Depression. The Depression will be more painful than the so-called Great Depression which occurred seven decades ago. There are several reasons why. The primary one is our interdependence upon one another. In a functional economy, the division of labor is a good thing. This specialization and trade with each other has made our lives easier and wealthier than they otherwise would have been.
When an economy becomes dysfunctional, everything changes. Trade declines, or in the case of an economic collapse, virtually ceases entirely. The interdependence and specialization which contributed to our high standard of living ceases now become liabilities.
Trade as used above refers to all types of trade. It obviously refers to international trade but goes beyond the clothing and electronics from Asia. Domestic trade will
Seventy plus years ago, we were less well-off but also less dependent on markets to provide our goods and services. We were more self-sufficient. A greater portion of the population was rural and agrarian. They raised their own food, made their own clothes, knew how to repair things, etc. Today we are dependent upon functioning markets to provide our range of needs.
This specialization is one of the primary reasons why we are wealthier, but it also is a liability in the event of an economic collapse. How would most of us eat if grocery stores were not re-stocked? Would you be able to repair a late-model automobile? Without gasoline, how would we get anywhere?
It is questions like these, most of which are unanswerable by today’s specialized generation, that will make another Great Depression harder than the one experienced over seven decades ago when people were less affluent but also more independent.
Wayne Allen Root provides a list of other considerations which suggest this coming event will be worse:
Because The Great Depression had NONE of the structural, economic, and social problems, nor the massive obligations we are now facing. Read the facts:
In 1929 America was not $16 trillion in debt, plus facing over $100 trillion in unfunded liabilities. That’s over $360,000 in debt per citizen.
In 1929, most of our states were not bankrupt, insolvent and dependent on federal government handouts to survive. One county (Cook County which includes Chicago, Illinois) now owes over $108 billion in debt (the biggest part of it in unfunded government employee pensions).
In 1929, we did not have 21 million government employees with bloated salaries, obscene pensions, and free health care for life. Today 1 out of 5 federal employees earn over $100,000.
Today, 77,000 federal employees earn more than the governors of their states.
Staggering numbers of federal government employees retire at a young age with $100,000 pensions for life.
Unfortunately on the state and local levels it’s even worse. There is now nearly $4 trillion in unfunded pension liabilities for state government employees.
Protected by their unions and the politicians they elect, government employees are bankrupting America. In Illinois there are retired government employees making over $425,000 per year.
No one could have imagined any of this in 1929. There is no possible way to pay these bills moving forward.
In 1929, Social Security, Medicare, and Medicaid didn’t exist. The federal government had no such obligations threatening to consume the entire federal budget within a few years.
In 1929, there was no such thing as welfare, food stamps, aid to dependent children, or English as a second language programs. American’s didn’t consider it the responsibility of government to pay for breakfast and lunch for school students – let alone for illegal immigrants at school.
Who could have imagined back in 1929 that one seventh of America’s population would be on food stamps…and the federal government would ADVERTISE to encourage even more Americans to sign up for food stamps and welfare.
Who could imagine back then that the federal government would team up with the President of Mexico to encourage Mexicans living illegally in America to sign up for food stamps?
Who could have imagined back then that the president would offer not just welfare, but waivers to allow any state to opt out of requiring work to receive welfare?
Back in 1929, who could have imagined 86 pregnant teenage girls all in one Memphis high school?
In 1929 we had families, moral codes, and churches to prevent this kind of tragedy. Do you actually believe this is just one abnormal high school? There must be record numbers of pregnant teens all over America. They have figured out that the choice is to either work a drab, depressing job paying minimum wage, or pump out babies and have government pay your bills for decades to come. But where will the money come from? This will overwhelm the system with generations of massive debt. This is a nightmare.
In 1929, legal immigrants wanted only to work. My grandparents, who came to this country from Russia and Germany, received no government benefits. They worked day and night to provide for their family and become American citizens. It was sink or swim. My grandmother Anna Root never took a penny in welfare, even when my grandfather died and left her with no job, no money, and 7 young children. So back in 1929 immigrants cost us very little.
Today we have millions of illegal immigrants and their children collecting billions of dollars in entitlements from U.S. taxpayers.
In one state (California) illegal aliens cost taxpayers over $10.5 billion annually just for education, health care and incarceration. Do you now understand why California is bankrupt and insolvent? This is spreading across the country.
More dysfunction? Today new studies show that almost 20% of American children under age 18 are obese and therefore prone to suffer pre-diabetes, diabetes, or cardiovascular disease.
Even worse, by 2020 experts predict that 52% of the adult population of America will have either pre-diabetes or diabetes.
Do you understand the cost of diabetes? This alone will overwhelm and bankrupt America’s health care system.
In 1929 we had no federal disability program. Today almost 11 million Americans are on disability. There are more citizens on the disabled rolls than the population of 39 of our 50 states. This is far worse than the welfare or unemployment rolls- which have time limits. Disability is forever. The ratio of able-bodied workers to disabled in 1967 was 41 to 1. As of June 2012 it is now 16 to 1. It is impossible to pay this bill long term.
But wait…it gets worse. Now soldiers are in on the act. Are you aware 45% of returning vets are claiming “disability” – a number that dwarfs all prior records in the history of warfare. No nation can afford this.
In 1929, we had an education system that was the envy of the world. Today our public schools are in shambles. We spend the most money in the world, and get among the worst results. The difference today? Teachers unions are in charge, instead of parents. Our students graduate with few skills, are qualified only for low paying manufacturing jobs that no longer exist — they’ve been shipped to China and India. What will this workforce do for the rest of their lives? Live off the government dole? Who will pay for it?
In 1929 taxes were much lower. Forget the tax rates — they were meaningless. In those days we had a cash economy, so most businesses paid little or no taxes. Sales and FICA taxes didn’t exist. Today the combined local, state, property, gas, sales, FICA and federal taxes are the highest burden in history.
Unconvinced?
When income taxes started in 1913, the average American was untouched. Only the richest 350,000 Americans paid a 2% income tax. Today the average American works until April 12th just to pay his or her taxes.
This stifles entrepreneurship and hinders the financial risk-taking necessary to create jobs and get out of a Great Depression.
New numbers just out for July back up my contention that disaster looms. Sales tax revenues plunged an alarming $539 million below expectations in California last month. The jobless rate rose in July in 9 out of 10 battleground states — Iowa, Florida, Michigan, Nevada, New Hampshire, Pennsylvania, Virginia, Colorado and North Carolina all had higher unemployment (while Ohio held steady). They say bad news comes in threes. Well here’s the worst news of all- the American Petroleum Institute reports that demand for oil in July was at the lowest level since 1995. These figures are alarming — to say the least.
Do you get the picture? Our country is staring at the Greatest Depression ever. We face a long slow decline towards the end of America — unless we change paths and policy quickly.
The economy is crumbling. The situation is turning more hopeless by the hour. The more government gets involved, the worse it gets. Coincidence?
http://www.economicnoise.com (http://s.tt/1oJ6I)
2012-10-02 21:43:59
Source: http://www.fedupusa.org/2012/09/why-this-depression-will-be-known-as-the-greatest-depression/
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