Goodbye Barry - Welcome Home AMERICA!

Thursday, June 12, 2008

Shades of 1929!

The government won't make it official, because that would reflect poorly on the administration, but we are in a recession - bordering on another depression. It's been almost 80 years since the beginning of the "Great Depression" of 1929, which lasted until 1941, so we were about due for one. We had four lesser-known (except to economists and historians) depressions in the 1800's, each of which lasted between five and seven years. So, in a relative sense, the 20th century was a much smoother one, depression-wise. One biggie, but no roller coaster rides.

The root causes of the Great Depression are still uncertain, but a drop in the Gross Domestic Product (our ability to sell what we manufacture) initiated a high unemployment rate in the United States. The unemployment rate represents what is not produced that could be produced. The unemployment rate, these days, is a misleading statistic anyway. An individual is counted as unemployed if the individual is over the age of 16 and is actively looking for a job, but cannot find one. Students, those individuals who choose to not work, and retirees are therefore not counted in the unemployment rate. Nor are the under-employed (those who desire full-time employment but cannot find it), or those who are not drawing unemployment compensation from the government (those who have not filed for unemployment, or have exhausted their unemployment benefit). In 1929 the unemployment rate in the USA was 3.2%. In 1930 it had more than doubled at approximately 8.5%., and by 1933 our unemployment rate had hit 25%. (Source: That means that one person in four who was capable of working, and actively seeking employment was just S.O.L.! Keep in mind also, that at that time in our history, the labor force was over 90% male. Women may not have even been included in the statistics.

So, what's going on today? In August of 2001 our unemployment rate was 4.9%, based on:

Total civilian population 212,135,000 (excluding those under 16, members of the military, and persons in institutions)
- Not in Labor force 70,785,000 (retired, students, individuals choosing not to work)
= Labor force 141,350,000 (total population minus those not in labor force)
- Employed 134,393,000 (individuals with jobs)
= Unemployed 6,957,000 (individuals without a job and actively searching)

But, that was seven years ago. Today we have offshore outsourcing of American jobs, combined with in-sourcing of technical and professional people, added to the reported 12,000,000 (and constantly growing) illegal aliens. And we have an ever-increasing export deficit, and we are becoming more dependent on overseas sources - many of which are less-than-friendly to the United States - for goods and services. Where is our unemployment today? As of May 2008 our national unemployment stands at 5.5% - 2.3 percentage points above 1929, yet roughly 3 percentage points below 1930. We now have a "civilian population" of 154.5 million - that's slightly over 51% of our total population of 301 million - for a decline of 57,635,000. Where did those 57.6 million people go? Did they die? Surely mortality rates would be offset by those coming of age.

According to the U.S. Census Bureau, in 1990 there were 16.7 births per 1,000 population (those would be the people who will be 18 at some point in 1908). In 2007, the last year available from the U.S. Census Bureau, there were 8.1 deaths per thousand. That's less than ½ the number of people who had been in the employable age range for the previous 2 years. (I could find no figures giving specific numbers of either births or deaths, nor could I find statistics showing the number of people in the 16-30 age range who would have been excluded from the "civilian population" due to education, military or institutional status.) How do you have a birth rate twice that of the death rate, and lose 57.6 million people from the workforce? I am amazed at the number of things in this world that I just simply do not understand.
Our GDP has remained fairly stable since 2006 reflecting a growth of approximately $1 billion, which is a good sign. Although that amount is significantly larger than my monthly check, $1 billion is not a lot of money when your talking about a total GDP of $14,000,000,000,000 ($14 TRILLION). To review we have a 5.5% (official, if not totally accurate) unemployment rate, and a stagnant GDP. Then add over 5,000,000 welfare/Medicaid recipients (whose only skill seems to be spreading their legs and letting the taxpayers pick up the tab), and corporate offshore outsourcing of hundreds of thousands of American jobs. Now OPEC is actively engaged in driving our economy further and faster down the road to ruination, and transportation costs are killing us at the gas pump, retail stores, and others offering goods and services. Additionally, the U.S. dollar has been devalued by half around the world! Does the inevitable outcome escape our elected representatives in Washington D.C.? Let me spell it out for them - D.E.P.R.E.S.S.I.O.N.! And what gifts does the depression bring? Civil disturbances, increased crime rates, and perhaps rioting ... or possibly even another revolution. I do not wish to see any of these things happen, but I fear that unless the government changes the course our country has taken in the last 50 years, these will be the consequences of our inaction.

I hope that someday I can say, "That prediction I made back in 2008 was wrong! Our government finally grew a set, and re-directed our economic policies. Today our country is as prosperous as it was in the 1950s, our borders are secure, and we depend on nobody outside the United States for our fuel needs!"

I'm Gil, and I approve this blog!

No comments: