to be buying into this line of thinking. A new NBC/Wall Street Journal poll found that 37 percent of Americans believe that the economy will improve over the next year, while only 17 percent of Americans believe that it will get worse. But is the economy actually improving? Not really. At the moment things are relatively stable. Some economic statistics are improving slightly and some continue to get even worse. However, it is very important to keep in mind that one of the biggest reasons why things have stabilized is because the federal government is pumping more than a trillion dollars a year into the economy that it does not have. The Obama administration is engaging in a debt binge unlike anything America has ever seen before, and yet many economic indicators are still in decline. So what is going to happen when the federal government stops injecting gigantic waves of borrowed money into the economy? That is a frightening thing to think about. The best efforts of our “leaders” in Washington D.C. are not accomplishing a whole lot. The Federal Reserve has pushed interest rates as low as they can go and the federal government is spending unprecedented amounts of money. But even with the federal government and the Federal Reserve pushing the accelerator all the way to the floor, the economy is still not improving much at all. Millions upon millions of Americans out there are anticipating some sort of a “great economic recovery”, and they are going to be bitterly disappointed.
But right now there are some “bright spots” in the economy, and you are bound to run into family and friends that will repeat to you the nonsense that they are hearing on the television about how the economy is recovering.
When they try to convince you that the economy is getting better, ask them these questions….
- If the economy is getting better, then why did new home sales in the United States hit a brand new all-time record low during 2011?
- If the economy is getting better, then why are there 6 million less jobs in America today than there were before the recession started?
- If the economy is getting better, then why is the average duration of unemployment in this country close to an all-time record high?
- If the economy is getting better, then why has the number of homeless female veterans more than doubled?
- If the economy is getting better, then why has the number of Americans on food stamps increased by 3 million since this time last year and by more than 14 million since Barack Obama entered the White House?
- If the economy is getting better, then why has the number of children living in poverty in America risen for four years in a row?
- If the economy is getting better, then why is the percentage of Americans living in “extreme poverty” at an all-time high?
- If the economy is getting better, then why is the Federal Housing Administration on the verge of a financial collapse?
- If the economy is getting better, then why do only 23 percent of American companies plan to hire more employees in 2012?
- If the economy is getting better, then why has the number of self-employed Americans fallen by more than 2 million since 2006?
- If the economy is getting better, then why did an all-time record low percentage of U.S. teens have a job last summer?
- If the economy is getting better, then why does median household income keep declining? Overall, median household income in the United States has declined by a total of 6.8% since December 2007 once you account for inflation.
- If the economy is getting better, then why has the number of Americans living below the poverty line increased by 10 million since 2006?
- If the economy is getting better, then why is the average age of a vehicle in America now sitting at an all-time high?
- If the economy is getting better, then why are 18 percent of all homes in the state of Florida currently sitting vacant?
- If the economy is getting better, then why are 19 percent of all American men between the ages of 25 and 34 living with their parents?
- If the economy is getting better, then why does the number of “long-term unemployed workers” stay so high? When Barack Obama first took office, the number of “long-term unemployed workers” in the United States was approximately 2.6 million. Today, that number is sitting at 5.6 million.
But there is some good news.
When Barack Obama first took office, an ounce of gold (NYSEArca:GLD) was going for about $850. Today, the price of an ounce of gold is over $1700.
The era of great prosperity that America has enjoyed for so long is coming to an end.
In fact, our long-term economic decline is about to accelerate.
So enjoy this “bubble of hope” while you can, because it won’t last long.
So let us hope for the best, but let us also prepare for the worst.
Just because the economy is about to go through hard times does not mean that you have to go through hard times personally.
Right now, you can decide to make an investment or start a business that will thrive in a tough economic environment.
Victory often goes to the most prepared. So don’t just sit there while the storm clouds gather. Instead, this should be a time when you are gathering resources and developing a gameplan for the coming economic chaos.
Those that choose to have blind faith in “the system” are going to be tremendously disappointed in the years ahead. Just because you have a job right now does not mean that it is always going to be there. Just because your stock portfolio is doing well right now does not mean that will always be the case.
Hopefully we all learned some important lessons from 2008. The global financial situation can turn on a dime. When markets fall apart, they tend to do so very rapidly.
Ultimately, the debate about whether the economy is improving or not is going to be ended very emphatically. When the next wave of the financial crisis hits, there will be no doubt about what direction things are going.
Don’t let the next wave catch you by surprise.
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Michael has an undergraduate degree in Commerce from the University of Virginia and a law degree from the University of Florida law school. He also has an LLM from the University of Florida law school. Michael has worked for some of the largest law firms in Washington D.C., but now is mostly focus on trying to make a difference in the world.