WP: The Economy In Real Life: Ground Level Views of What Needs Fixing

[DeepModem Mom]

The Economy In Real Life
Ground-Level Views of What Needs Fixing

By Howard Schneider and Nell Henderson
Washington Post Staff Writers
Sunday, November 14, 2004; Page F01

The economy grows, but modestly. The number of jobs leaps forward, but wages lag.

The stock market improves; the dollar weakens; low interest rates keep home mortgages cheap, but household debt has mounted to record levels while savings rates have fallen to historic lows.

China makes. America buys....

***

Has an era of sustained growth arrived, or will the situation shift for the worse?

Just as members of the PhD crowd emerge from their charts and models with different interpretations of today's economy, so do Americans emerge from the daily battle to balance the checkbook with different opinions about where things stand and what to expect in the future....

(Note: Issues brought up in the article include financing education; higher wages; health care; savings and household debt; coping with unexpected job loss, disability, loss of savings in stock market; burden of federal debt on children and grandchildren.)


http://www.washingtonpost.com/wp-dyn/articles/A47165-2004Nov13.html

[mhr]

1. Unemployed 53 Months - Over 2,500 Resumes Out The Door

Jobs, What Jobs?

[The Zanti Regent]

9. I've got stupid nephews and nieces in the same boat who still vote GOP

Unemployed, Unemployable, several with jobs that went overseas.

Several unemployed for over a year and unemployment ran out.

So what did they do?

Why, they crossed the border from Pa to Ohio with busloads of idiots from the Assemblies of God and went door to door leafletting for issue 1. It's more important to stop gay marriage than having work.

I try to talk to them about their job situation. What do they say?

"God is testing me..."

Several have run out thier lifetime TANF 5 year limit too. They go begging for food.

Yet GOD IS TESTING THEM...

I've had it.

I'm in California, I want OUT of JESUSLAND!

[barb162]

11. instead of getting mad at Bush they go deeper into their

religion and work harder for Bush. When they are starving, they will have a smile on their face for their great leader Bush. Unless we demand change things will get worse and as long as people won't wake up, we will in fact go into a depression. This is where we are headed. There is no stopping it now.

[The Zanti Regent]

22. You cannot reach them

They are just totally brainwashed by the Assemblies of God and they buy into the bullshit that the rapture is coming in a week or 2 and Jesus is going to take them away, so they do not care how bad it gets. In fact, the worse it gets for them, they believe the sooner the rapture and their godless athieist uncle will be left behind.

[area51]

2. Recovery?

What recovery? I don't see it. I'm so tired of the rt-wing media trying to pretend we've had a recovery. Anyone who's lost their job knows the truth about the economy.

[barb162]

3. the economy is falling apart and it is showing up in many areas

lack of jobs or job growth, types of jobs created (low-paying only), the gargantuan deficit, the trade deficit, the sinking dollar, people are losing their safety nets like health insurance, pensions, etc. I expect a major depression. This recovery has been a jobless recovery and many economists have been using old models for their analyses; most don't know what the hell is going on.

[Deja Q]

4. Worse than that - it's been a jobloss recovery.

Which isn't any real recovery of any sort. :-(

[Vitruvius]

19. A "jobless recovery" is a recession.

Period.

[pinerow]

5. Plenty of jobs in the fast food industry...and anyway...who needs

jobs when we have Jesus...and faith based charities....hmmm...I wonder when the faith based debtors prisons will open.

[VegasWolf]

6. These guys must have chimp's rose colored lens on. What

a joke "jobs LEAP forward". Yes, if you count
WalMart greeters. Shame that there is not a competency
test for journalists.

[barb162]

10. 70,000 of the jobs for October were for the hurricane rebuiding

in Florida and although I didn't look at the rest of the report I am sure a lot of the rest was the minimum wage stuff. Let's not forgeet, Bush promised 300,000+ jobs a month with his tax cuts to the rich and we have rarely seen a 300,000 month since over 2 yrs. ago when he promised this. What we have is pathetic anemic job growth. The country is falling apart economically and I don't think we will recover.

[The Zanti Regent]

7. Hey folks, this is just the same old lies from the WHORESHINGTON POST

Yellow Journalism at its finest...

[kuozzman]

8. corporate influence on gov, corruption

corruption, lies
few lies, many lies
gov accounting worse than Enrons, innacurate indicators
plug one leak, two more pop open
Once one bursts, they all do
What will be the trigger??
We're in an impossible situation unless we invade China or something.

We have HUGE DEBTS, especially when you don't only count the next ten years, as our gov does, despite GAO objecting to it, in the GAO report, it's for next 75 years=$35Trillion!That’s over three times the GDP! (that that figure does not include the most recent Medicare Prescription Drug, Improvement and Modernization Act of 2003, which will cost $534B over 10 years)
Other Record Numbers(From paper I wrote in october):
• Total Outstanding Credit Market Debt: $35Trillion+/Over 300% GDP for first time ever(267% During Great Depression)
• Outstanding Derivatives: $234T in Dec.2003-Currently about 2000% of GDP and was about 10%GDP in 1986
• Foreign Owned US Debt Instruments: 42% of total
• Trade Deficit: Record High in June, 2nd Highest In August
• Ratio Of Household Debt To Disposable Income: 108.3% If the household debt continues to grow at the same rate in the next presidential administration as it has since 2000, it will reach 152.0 percent of disposable income by the end of 2009

Corruption worst ever.
Dependence on other nations more than ever.
Piss off the world more than ever.
People hate Bush more than ever.
Baby boomers going to start retiring in 2008.

When the foreign dependency ratio begins to increase in 2008 as the Boomers start to retire, the attempt to cash in on the illusory assets will bring the bubble to light. The actual profitable stream of goods and services yielded from an asset will be surprisingly low and the recognition of a lower valuation will become apparent.

What will be the expectation of foreigners holding US assets?
They will begin their attempts to cash in the "fruits of their labor" beginning in 2008 as well because of their own "Boomer" population profiles. They will expect to receive the same real value in return for goods that they have shipped to the US, plus a reasonable return.

Since we are operating at a current deficit rate of nearly 6%, the US dollar is at least 100% overvalued based upon empirical experience where the dollar exchange value dropped 50% (I.e. 100% overvalued) from 1985 to 1988. As a result, the current account trade deficit reduced from 2.8% (in 1985) to 0% (in 1991). Additionally, the US equity, bond, and real estate markets are approx. 35% overvalued. Combining both factors, the foreign investors will only receive 20-30% of their investment in real terms, and will become extremely upset.

We're Fu**ed!

[cliss]

12. Nice post. Thanks, KM.

That's just the kind of solid information I'm looking for. I agree with you; I think we're standing at the edge of the abyss, looking down.

I think the people who really know are currently sweating heavily. Think of big sweat stains under their arms. They know we're like the Family In The Fast Lane. Dad has a good job. He drives a late model Beemer. Mom's got an OK job which doesn't pay a huge salary, but it helps.

Both Mom and Dad have a big spending habit. Truth is, they love to spend money. More than comes in. They currently owe about 1 year's salary on their credit cards. The mortgage is way too high since they picked up a 2nd mortgage, but what the hell. Home prices are moving up, aren't they?

Suddenly, without warning the shit hits the fan when Dad finds out he's lost his job. Company reorganization.

Policymakers in Washington know there's SO MUCH brewing under the surface, that they don't know which link in the chain is the weakest. There's corruption going on at Fannie Mae. They're trying desperately to keep the lid on that powderkeg because when it explodes, the real estate market could tumble.

Pick your poison.

[kuozzman]

14. Everything will tumble!

My prediction: Allow(again) a terrorist attack-blame everything on that-no government officials are held responsible for anything-the fact that an 18 year old earning average income over their lifetime would contribute $723,591 in Social Security taxes. They would only receive $140,000 in benefits. Forgotton, gone!

Every congressman who has supported policies since 2000 should be held criminally accountable for all the f'n debt. Trillions?! I thought we only talked about trillioins in astrology?

And what was the total on the pointless propaganda campaigns?
Didn't Congress give itself a raise last year!?

Some of the findings in the FY2003 Financial Report of the United States Government:


• 2003 government operating cost up $300B from 2002 to $665Billion
• Notes a new accounting standard which records military equipment as an asset and that this resulted in an increase in assets of $383Billion
• Notes that he looks forward to a day when he and the OMB receive the needed financial reports in order to issue the report in December rather than February
• Government revenues down $81.7B, primarily due to tax cuts
• Costs up $225.8B primarily due to fighting war on terrorism
• Reported Federal budget deficit as $378.4B(More on this number later)
• Net debt is $7.1T, but he notes that Federal accounting standards allow the government to measure it’s liabilities to SS and “certain other programs” in other contexts
 Notes that government liabilities including all future obligations (over next 75 years, rather than 10 years, like the “official” national debt of $7.1T ) like SS, Medicare, pensions, benefits, etc. are $34.825Trillion!
 Further notes that that figure does not include the most recent Medicare Prescription Drug, Improvement and Modernization Act of 2003, which will cost $534B over 10 years(75 year value not yet known)
 Nor does that figure include the recently passed Corporate Tax Bill, 9/11 Recommendations Bill or the most recent tax cut
• Bush raised Treasury debt ceiling from $6.4T to $7.384Trillion (and as of early October 04 needs to raise it again, but will put that off until after the election)
• Notes that using accrual based accounting methods rather than cash-based accounting methods, the $374.8B deficit should actually be $665B, mainly from pension and health liabilities and military and veteran compensation totaling $290.6B
• Individual income tax revenue, which accounted for 82.5% of total revenue was down 3.7% for a total of $1.481Trillion
• Notes in FY2000, corporate taxes accounted for 10% of total revenue, but now only 7.1%
• Total revenue was $1.796T, down 4.4% from FY2002
• Defense spending up 35.3%
• Social Security costs up 4%
• Health & Human Services costs up 8.5%
• Veteran Affairs costs up 19.6%
• Payments on interest down 10.6% due to low interest rates throughout the year
• Government cost of operations in 1999 was break-even, now net operating cost is $468.4Billion
• DOD $42B for Operation Iraqi Freedom
• Notes that assets increased by $381.1B, mainly due to new accounting principle used by DOD regarding its equipment value
• Notes that Federal debt securities held by the public increased 10.4% and is once again the largest liability on the balance sheet at $3.94Trillion
• Military retiree health component has tripled since 2000
• Explains that government accounting methods evaluate from a cash-based perspective which only considers the flow of funds in and out of government accounts and not future liabilities and obligations
• Current future responsibilities of Medicare: $15.006Trillion
• Current responsibilities for Social Security: $11.742Trillion
• Notes that those numbers are not included in the balance sheet because current accounting standards(GAAP) do not require it
• Notes that 2003 total future liabilities are three times($27.7Trillion) the total liabilities stated on the balance sheet($7.1Trillion)
• Budget deficit as %GDP(3.8%) largest since 1993
• Gov. receipts fell for a third year in a row at -16.5% from FY2002
• The next section is pretty funny. It is on the “mission and organization of the government” and written in a pretty sarcastic way to point out how our government has changed and grown over the years





• It starts by writing:
The Constitution of the United States set out the Government’s original mission:

“…to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare and secure the blessings of liberty to ourselves and our posterity.”
(Report) Today, the Federal Government’s primary mission (managing the security of the nation, homeland, and economy) are still derived from this original mission. However, other missions have developed as the Congress authorized the creation of other agencies to carry out various objectives established by law.
• It then goes on to show, in tree chart form, how the government has expanded from the legislative, judicial and executive branches. In the end there are 98 additional departments and establishments
• Notes that the US Agency for Int’l Dev. turned in its financial statements on time and received a clean opinion on them for the first time in history
• Makes suggestions of how other departments could try to do the same in the future
• Gives a report card on the 26 departments examined in this report. There are five things they were each judged on and they could get a red, yellow or green circle
• Red=Serious flaws Yellow=Met some, but not all criteria
Green=Agency met all standards for success
• #Green: 4
• #Yellow: 47
• #Red: 79 Why is this allowed??? And why is this not reported on???

October Headlines:
10/28/04 Unemployment Claims Up 20,000 To 350,000 Last Week
10/28/04 Fed Warns Of Potential Impact Of Slowed Foreign Investment
10/26/04 Treasury Sec. Snow Downplays Economic Obstacles
10/26/04 Consumer Confidence Down
10/25/04 Cuba To End Circulation Of Dollar
10/24/04 Recession Approaching?
10/22/04 IMF Warns Increasing Oil Prices Threaten Global Economy
10/22/04 Dow Closes At Year Low As Crude At Record High
10/21/04 Coming Fiscal Crisis
10/21/04 Five Major Currencies Have Fallen Behind Gold Since July
10/21/04 Dow, Dollar and Bonds Drop as Gold and Oil Rise
10/20/04 Dollar Trading At 8 Month Low Against Euro
10/20/04 Oil Tops $55 For First Time During Regular Trading Hours
10/20/04 Americans Getting Dumber When It Comes To Current Events
10/20/04 Chicago Board Of Trade Warns Of Oil Reaching $75/Barrel
10/19/04 US Consumer Prices Up 0.2%
10/18/04 Oil Hits New High
10/18/04 Dollar Nears 7 Month Low
10/14/04 US Posts Record 2004 Budget Deficit
10/14/04 US August Trade Deficit 2nd Largest Ever
10/12/04 12 Million Face Pension Poverty
10/12/04 Corporate Tax Cut Pork
10/12/04 ¼ of working Americans live in poverty
10/11/04 Oil Prices Continue to Rise/Cause Worries About Home Heating This Winter
10/11/04 US Jobs/Dollar Struggling
10/11/04 Dollar Trades Near One Month Low
10/7/04 Foreign Central Banks Selling US Treasuries
10/5/04 Oil Prices Threaten Global Growth
10/3/04 Head of IFA Supports My Claim That Government Accounting Is Intolerable
9/29/04 Dollar Falling/Current Account Widening
9/27/04 Global Collision Course
9/21/04 Consumers Ignorant As Credit Ratings Worsen
9/21/04 Signs of Weakening Economy
9/20/04 Current Account Deficit to Remain Above 4% for Years to Come
9/17/04 Current Account Hits Record Gap
9/17/04 GAO Warns of Dangerous Deficit
9/17/04 GAO Warning Full Text
9/21/04 Consumer Confidence Falling
9/17/04 IMF Head Warns US Trade Imbalance is Threat to World Economy

And what has happened recently?
$ hit record lows against Euro
Int. Rate Hike
Fed monetized a couple Billion(Bought T-Notes to fund gov debt, since it's illegal for the government to create money to pay debts(they broke the law))
Debt Ceiling needed to be raised over a month ago-I find it hard to believe they've stayed under it this long when just their int. on debt is over $1Billion/day(broke the law)

CRIMINALS!!!

[UpInArms]

15. a partial answer

The estimated population of the United States is 294,797,300
so each citizen's share of this debt is $25,259.34.

The National Debt has continued to increase an average of
$1.61 billion per day since September 30, 2003

As U.S. Debt Ceiling Is Reached, Bush Administration Seeks to Raise It Once Again

http://www.nytimes.com/2004/10/15/politics/15debt.html

WASHINGTON, Oct. 14 - Less than a day after President Bush implied that Senator John Kerry lacked "fiscal sanity," the Bush administration said on Thursday that the federal government had hit the debt ceiling set by Congress and would have to borrow from the civil service retirement system until after the elections.

<snip>

Since Mr. Bush took office in January 2001, the federal debt has increased about 40 percent, or $2.1 trillion, to $7.4 trillion. Congress has raised the debt ceiling three times in three years, raising it most recently by $984 billion in May 2003.

On Thursday, Treasury Secretary John W. Snow said that the federal government was about to breach the limit again and would be able to keep operating only if it started tapping money intended for the civil service retirement fund, the pension system for federal workers.

<snip>

Senate Republicans tried to insert an increase in borrowing authority into a military spending bill this summer, but were blocked by Democrats and a handful of Republican lawmakers who sought tougher restrictions on spending increases and tax cuts. As the election season moved into the final phase, Congressional leaders tacitly agreed to address the issue, along with about 10 unfinished spending bills, in a session after the November elections.

...more...

[kuozzman]

16. All gov indicators very understated

From Snow's Report:
• Net debt is $7.1T, but he notes that Federal accounting standards allow the government to measure it’s liabilities to SS and “certain other programs” in other contexts

 Notes that government liabilities including all future obligations (over next 75 years, rather than 10 years, like the “official” national debt of $7.1T ) like SS, Medicare, pensions, benefits, etc. are $34.825Trillion!

 Further notes that that figure does not include the most recent Medicare Prescription Drug, Improvement and Modernization Act of 2003, which will cost $534B over 10 years(75 year value not yet known)
 Nor does that figure include the recently passed Corporate Tax Bill, 9/11 Recommendations Bill or the most recent tax cut

• Bush raised Treasury debt ceiling from $6.4T to $7.384Trillion (and as of early October 04 needs to raise it again, but will put that off until after the election)

[mhr]

13. My Letter To Nell Henderson - Sugar Coated Economy

She can be reached via the following email address: [e-mail]

Ms. Hendersonn,

I read your latest missive on the US economy: The Economy In Real Life.

As always, I am amazed by how superficially reporters portray reality.

My reality is Dallas, TX. At the age of 47, I am now unemployed for 53 months - a refugee from telecom and aviation. I find my two college degrees worthless - BSEE, MBA. I find my military service as a Naval Officer meaningless. I find my commercial pilots license worth less than the paper it is printed on. Oh, and my 15 years of professional work experience, that is something to be ignored by each and every employer.

So, with over 2,500 resumes out the door and all friends and acquaintances networked to exhaustion, I find myself flat broke with no economic future in the US. But never fear, reporters like you say the PHDs have spoken; the recovery is just around the corner. I've been waiting for that recovery for four years now. Reasonable people would assume that it is not happening.

For perspective, consider this chart from the Dallas Federal Reserve. It portrays a vastly different picture than the one conveyed by your article. It shows that Dallas and other Texas cities have been bit very hard with job losses over the last four years. In two years, 2001-2002, Dallas lost 112,000 jobs in Telecom alone. That represented over 3.2 billion in lost annual wages to the local economy. Were is the story on this story.



Sadly, I can no longer trust journalists to convey the truth. There is a world of hurt in middle class America that journalists have not attempted to understand. All I can assume is that the lot of you are afraid for your jobs as one sour note about Der Fuhrer would send your middle class dreams up in smoke.

When you are ready to tell the real story, let me know.

MHR
Dallas, TX

[KT2000]

17. Nice Timing

now we get to listen to the media sing woe is me after they turned the election into a referendum on Kerry's military service.

They had a chance to inform the public about the economic devastation that is only going to get worse.

I wish reporters would find out what it really means to live without health insurance.

[mhr]

18. Kick For Exposure

Let's Write The Reporter And Tell Her What We Really Think!

[Rose Siding]

20. Sometimes I feel like I'm on Mars..either me or WP reporters!

All I know is that for the first time in our 50 years, my husband and I are going to be without health insurance. I can't even believe we're considering it...I feel so guilty because we'll end up contributing to the problem if we fall ill.

We've paid the premiums -more than our rent and almost 3Xs what it was in 2000- for as long as we can. We held out hope that a Dem in the WH *might* help us see light at the end of the tunnel. The last hike ate past any margin of "disposable" income and chiseling away, just to get by, at an emergency savings that would carry us for 3 or 4 months if we needed it is making us crazy.

I KNOW there are repubs in the same boat; most of the BIBLE BELT is in the same boat! WhatEVER is it that doesn't extend their "morality" far enough to care for their families?

[The Zanti Regent]

21. I know the feeling!

I had to pay thousands of dollars and borrow on credit cards to take care of my mother.

The rest of my family is brainwashed by the Assemblies of God. They didn't lift a finger.

I found myself in the same situation with my father.

Once again, they did not lift a finger.

Try to talk to them and they utter inane bullshit about God's Will.

Meanwhile, I had to give up buying a house, a car, a family to pay bills and I wind up bankrupt. The sad thing is that there will be nobody to pick up my bills when that time comes.

Each day that goes by, I hate Christianity more and more.

[mhr]

23. Join The Club - I Have Been Without Health Care Coverage For 4 Years

My take is that our sad society has reached the stage where it truly is every man or woman for themselves.

We are seeing the beginning of the end of America.