“When the welfare system was established in 1935, there were 143 people working for each person drawing welfare benefits. Now the ratio is one to one! There is one person drawing some form of welfare or entitlement money for each person working.” G. Edward Reid, Even At The Door, 78.
Here are some basic numbers you will find about the economy:
1. The national debt is 95% of the Gross Domestic Product (GDP). Our total debt is $14 trillion, and our GDP is $14.66 trillion.
2. The unemployment rate has been just above 9% for the last 32 months, ending in December of 2011. The natural unemployment rate is 5%.
3. The number of people unemployed in July, 2011 was 13.9 million.
4. There are 4.98 workers for every job opening available.
The Bible predicts that the world is headed for an unprecedented financial collapse. “For in one hour so great riches is come to nought. And every shipmaster, and all the company in ships, and sailors, and as many as trade by sea, stood afar off.” Revelation 18:17.
If we are heading into the Bible’s prediction of an unprecedented collapse, then the U.S. economic downturns we have experienced since 2007 will seem like a walk in the park. This means that we are temporarily on “life support” by printing trillions of dollars. But will all this printing of greenbacks bring us out of this recession?
In the 1950s, the U.S. produced two-thirds of the world’s goods. We were the largest producer of petroleum. We were a creditor nation. We became a debtor nation at the time Nixon took us off the gold standard in 1971. We have been printing money with no tangible backing ever since.
Most of our growth since 1971 has been based on massive increases of credit rather than from real growth due to production. We have seen over the last forty years scores of our manufacturing jobs go overseas. We have been borrowing and borrowing to grow this economy, but the bubble burst by 2007.
Recently President Obama said, “I think we knew it was bad but we didn’t know how bad it was.” Real Clear Politics, December 2011.
Like an earthquake, the economy has experienced some aftershocks since 2007. You might say the financial earthquake hit in 2008 with the collapse of Bear Stearns and Lehman Brothers. A major aftershock hit in 2009 when we lost five million American jobs.
The aftershock of 2011 is the financial crisis in Europe. While Germany became the second largest exporter in the world, other European countries like Greece, Ireland, Spain, Portugal, and now Italy face serious economic woes.
Make or Break
“As the world economy remains bogged down by debt woes in Europe and the United States in the coming year, 2012 was regarded by some economists as a make-it-or-break year. . .
“For the world economy, Europe, rather than the United States, is the key this time. . . .
“As their forecasts go, the ‘good’ scenario is Europe grows 1 percent in 2012, the ‘bad’ one is a mild recession with -0.6 percent growth, and an ‘ugly’ one that features a major crises with a -2.5 percent growth.
“The forecast said there is a 40 percent chance that the ‘ugly’ scenario might occur, meaning a major recession is not that likely.” English.news.cn 2011-12-22 Yearender: World Economy to Continue Suffering Debt Woes in 2012.
European Banks
“The European crisis of 2011 and the associated deleveraging of the European global banks will have far reaching implications not only for the Eurozone, but also for credit supply conditions in the United States and capital flows to the emerging economies,” says Princeton University economist Hyuan Song Shin.
“Foreign banks’ branches account for about one-fifth of all commercial and industrial leading in the United States.” Steven Mufson, The Washington Post, Dec 22, 2011
Sears and Kmart, The Washington Post, December 27, 2011
STORE CLOSINGS: Sears and Kmart parent Sears Holdings Corp. plans to close at least 100 stores as it looks to shore up cash after a disappointing holiday shopping season.”
This represents about three percent of all Sears and Kmart stores in the US.
WHY IT’S HAPPENING: Sears and Kmart have been trying for years to turn themselves around. They’re struggling against competition from big box rivals like Target Corp. and from online retailers, which offer convenience and low prices.”
It has been estimated that by 2015, Americans will purchase about 30% of all items from the internet. While this will save time and money for the consumer, it will seemingly lay off thousands who serve in retail stores.
By Jeff Wehr
