2295 There Will Be No Economic Recovery. Prepare Yourself Accordingly.
Everything you need to know that the media is not telling you... Stefan Molyneux, host of Freedomain Radio - and winner of the 2012 Liberty Inspiration Award - breaks down the unspoken facts about the end of freedom, opportunity and trade in the modern United States. There will be no economic recovery, prepare yourself accordingly. To support the show, please donate at http://www.fdrurl.com/donate Sources: http://www.fdrurl.com/endus sThanks to Brady Lacko for his amazing research.
Hi everybody, it's Devin Molyneux from Free Domain Radio.
So please buckle yourselves in, if you'd be so very kind, and I hope that you will make it through this presentation.
This is very, very important stuff to know.
This is the world that you're living in, the world that you're going to grow older in, and the world that your children are going to grow up in.
This is the end of America.
So, let's have a look at some basic facts about where we are.
And now this pertains mostly to America at the moment.
But Europe is a little further ahead.
Some other countries are a little further behind.
We're all on the same path in the West.
It's the end of the West as we know it, which has challenges but also great opportunities as well.
So we're generally told that there was a terrible recession.
It was the greatest recession since the Great Depression of the 1930s.
But boy, now recovery is underway and everything's looking better.
Unfortunately, it's not true.
This is not the same as it was before.
Kind of fundamentally, we know that, right?
So, this is Congress's approval rating since 1974, and it's now down at around 5%, 5% approval rating for Congress.
This is not a country with great faith in its leadership and with good reason.
So these are things that Americans in general like better than their law-making body.
They like the TSA better than Congress.
They like people who hate the Olympics better than Congress.
They like the most disliked company in America more than they like Congress.
They like abortion more than Congress.
Nixon more than Congress.
Banks and financial institutions more than Congress.
Paris Hilton more than Congress.
And if that's not a sign of the apocalypse, I don't know what is.
And they like socialism more than Congress.
Well, that's a two-for-one because Congress is basically socialist.
So what is going on with the American economy as a whole?
Let's look at some information to give you the big picture and we'll start looking at more specific details.
And again, I really do thank you for your patience, but this is very important stuff.
So this is civilian employment to population ratio.
This is the percentage of working age people who are employed.
You can see in the 1950s it was 56, 57, 58%.
Why?
Well, because the majority of women were not in the workforce.
This is prior to the feminist revolution, getting women into the workforce and so on.
And then that labor force participation begins to really rise.
And now, despite the fact that most women are in the workforce, it's crashed down to 58%.
58%.
This is astonishing.
It means less than 60% of working-age Americans actually have a job.
And this counts people who are in the public sector versus just the private sector.
The public sector requires the private sector to generate income to have an income.
So it's kind of parasitical.
At least, you know, ideology aside, economically, it is parasitical.
And so this is really pretty terrible.
And as you can see, it's not getting better after the recession.
Wages as a percent of the economy, as you can see from 1950, 50, 52, 54 percent and so on, now they're down to 44 percent.
They've really crashed and they're not recovering.
This is significant because this means that a significant amount of economic activity is not wage-based, which means that there's less consumer demand, less consumer confidence and so on, and we'll get into that as we go forward.
So what has basically happened?
Well, really since the 1980s, there has been a massive explosion in borrowing.
This is true for corporations and households and governments and so on.
There's lots of different reasons for this.
Certainly computers have greatly enhanced our capacity to make up magic monopoly fiat currency and pretend all of this future stuff is going on.
But also because wages have stagnated or declined, particularly for the poorest, they've turned to credit to maintain their lifestyle.
So household debt, as you can see here, from 87, and these are all in constant dollars unless otherwise notified, and the sources for all of this will be in the notes to the video of the podcast.
So you can see here household debt just going up and up and up from 1977 onwards from, you know, $750 billion to $2.3 trillion.
Corporations.
Corporate debt.
So you can see here, starting in the 1980s, it has just spiked like crazy.
And it went down a little bit during the recession, now it's climbing back up.
And of course, governments.
This is federal government debt, total public debt.
Debt, as you can see, again, starting in 1980, 1990, and so on, particularly after Y2K, it's just gone through the roof.
And this is not the result of savings, right?
So if you have a whole bunch of savings, then you can lend out more money.
You can use that as collateral to borrow even more.
But of course, savings rates have declined.
The U.S. government is purposefully crushing and controlling interest rates down to the lowest conceivable level, because otherwise they have to pay more than a trillion dollars a year just to service their debt.
As the saving rates decline, As interest rates decline, savings rates decline as well because you're just not getting money back by putting it in the bank and so on.
This is all coming from the magic land of type whatever you want into your own computer to tell you how wealthy you are, which never lasts.
Here are some examples of what happened in the early 1980s.
So income growth and gains between 1917 and 2008.
So as you can see, the richest people are gaining enormously, but the poorest, bottom 90%, it's really stagnant.
When you create fiat currency, when you create money, which the government does perpetually and horrendously, The money that you create doesn't get dropped in helicopter bags over poor neighborhoods.
The money that you create goes to those closest connected to the government first, and they get to spend it at the existing rate of dollar value.
As the money that they spend spreads throughout the economy, then what happens is inflation hits, because there's too many dollars chasing too few goods and services, and so the poorest get the hardest hit from inflation, and the richest get the most benefit by being Getting their grubby hands first on the monopoly money that's created by the state.
So this is one reason, there's many other reasons, but as you can see, this hasn't achieved the goal.
The whole welfare state that started in the 60s, Lyndon Johnson's Great Society and so on, and Social Security, which started in the 30s, all of this was designed to close income disparities.
But fundamentally, we have to recognize that whatever the government does is coercive in nature.
You know, at a personal level, at a private level, we all understand That violence will get you the opposite of what you want.
Right?
If you stalk someone, she ain't gonna love you.
If you kidnap some guy's kids to get a job, you're not gonna be a model employee.
You're certainly not gonna get employee of the month.
Whatever you use violence to achieve, you will end up achieving the opposite.
And we've used the power of the state, the violence of the state, the violence of monopoly counterfeiting powers that the Federal Reserve has.
We've used the violence of the state to attempt to address complex social issues, and since violence always produces the opposite of what we claim we want, right?
How's the war on drugs gone, right?
How's the war on illiteracy?
How's the war on poverty?
Poverty was being solved in the 1950s, about a percentage point a year was being reduced.
Government intervened and decided to help people.
So violence will always achieve the opposite of what we want.
That's the fundamental issue that we're facing now, is, you know, you plant a demon seed, you raise a flower of fire, as the song goes, and that's really what we've done.
So average hourly earnings, do you ever get that feeling that you're just not getting any richer?
So look at this.
This is from 1964 to 2008.
1964, the average hourly income in 2008 dollars was $17.54.
In 2008, it was $18.52.
So it's really been pretty stagnant for, what, 45, 46 years.
And that's pretty tragic.
That is pretty tragic.
This, of course, is all propped up by debt.
Everything that we're looking up here is propped up by debt.
So if this was your income, but you were also now $200,000 in debt with no assets to show for it, right?
You were in debt to a loan shark, to some mafia boss, to a casino, to Visa, then you'd say, well, your average hourly earnings are way down because these are all propped up by debt.
This is really, really important to understand.
If you put debt into the equation, this stuff looks ridiculously worse.
So, remember, in the 1960s, 1970s, all these government programs went in designed to close the income gap, to make a more egalitarian society, and of course, look what's happened.
In 2011, the richest 5% share of income in the U.S. has increased almost 30% since 1967.
The bottom 20% share of income has declined 20% since 1967.
Whatever you try to achieve with violence, you will achieve the opposite of.
This was supposed to close the gap.
Violence was used.
It's made it wider.
So what's happened, of course, since the 1960s is social programs, so Medicare, Medicaid, and so on, Basically, transfers.
You steal from one section of the population at gunpoint through taxation, or you steal from the unborn through debt, or you steal from the poor through inflation, through printing of money, the creation of money.
And you take from one section of the population, you keep a massive overhead for yourself in welfare programs at 60%, 70%, 80% of the money is kept by the government.
So you steal from one person, you keep 60 cents of every dollar, and then you give 40 cents or 30 cents or 20 cents to the poor.
Of course, the people who are bureaucrats love this kind of stuff.
But here you can see this incredible rise in social programs, and this is fundamentally what's driving the deficit and the debt.
Social programs as a percent of the economy, 1960, you know, 4 or 5 percent.
Now they are 16 percent of the GDP are social programs.
You understand this is not wealth.
This is just wealth transfer.
You know, I mean, the thief gets wealthier if he lifts your wallet, but you're not exactly, he's not exactly adding to the wealth of society as a whole.
So social programs now are consuming the most federal tax revenues.
It's the single biggest item.
So as you can see here, this graph, the blue, is the receipts, tax revenues, and they've remained relatively constant since the 1950s.
It seems like government has grown a lot, but as a percentage of the economy, they have not.
Although the percentage of the economy, it's really tricky to measure because there's been such an expansion in government and government programs, a lot of which are counted as a measure of the economy that This graph would look a little bit different if we merely looked at the private sector, which we'll get to.
But as you can see, the social programs are just eating everything up, eating everything up.
And what's the result of this?
Well, this cuts into everything else.
Things like infrastructure, roads, bridges, maintenance.
I mean, the backlog of decreptitude in the public sector is just crippling.
So here you can see, you increase your social program spending and everything else turns to crap.
Transfer payments, as mentioned, have now risen, and you can see here them rising.
Transfer payments are rising.
Now consume 16% of GDP. Monstrous, monstrous item.
And what does this turn into?
Well, so the total welfare spending that the government is lavishing upon the poor is $168 per day for every household in poverty.
Right?
Now, this is 20% more than the median income.
For the entire United States.
In other words, we are spending more per household, 20% more, than they would earn if they were middle-class income earners.
You understand, this is completely unsustainable.
It traps the poor into a near-permanent underclass, and social mobility has vastly declined since the introduction of the welfare state.
It really traps them because they have to have this huge chasm to leap over.
They've got to leap over What the work and education and experience it takes to get to more than 20% of the income.
Now, of course, the poor aren't actually getting all of this money.
They get all this trickle-down.
It comes in food stamps.
It comes in, quote, free medical services and subsidized housing and so on.
And this doesn't even count public schools, which is another form of welfare.
Because it's services for the poor, which have more children than the rich, which are paid for by the rich or the middle class.
So this is not sustainable at all, and it's been completely catastrophic for the poor.
Federal net outlays are 18 times 18 times what they were in 1970.
And again, you can see here just this massive, massive rise.
A lot of this, right?
I mean, women go into the workforce, women need government subsidized daycare.
Women go into the workforce and they pay more in taxes, which allows the government to use that as collateral to borrow more and print more.
And welfare program traps people in a permanent underclass.
Of course, when the government starts paying bills, the price cap of consumer resistance goes off completely and so you can have all of this ridiculous overhead that goes into the healthcare system and there's less pressure because the government is now paying more than 50 cents on the dollar for healthcare.
So, in the 1950s, 85% of all working-age men had a job and it's now below 65%.
The other thing, of course, with the collapse of the family and the catastrophic rise in divorce in the 1970s and 1980s, one of the things that made men grow up and get jobs was being a father and head of a household.
That's not the case anymore.
And so since the government has stepped in to take the place of fathers and providers, Male ambition has been blunted somewhat, and this is just one of six million different reasons, but this is off the top of my head.
So in the 1950s, 85% of all working-age men had a job.
This is now below 65%, and as you can see, it dropped enormously in the last recession, and it's not really climbing back up.
And this is with the public sector, the massive growth in the public sector swallowing up all of these people.
Again, if you only look at the private sector, and if you excluded the areas of the private sector which service the public sector, these numbers would look enormously different.
So, this is employment population ratio again.
As you can see, it rises up, it goes down, and it's now pretty low.
So, that's just some graphs.
Hopefully, to get your attention, let's look at some factors.
We're told that we're in a recovery because the numbers, of course, are being manipulated.
This is, you know, standard statism 101 is just lie and manipulate the numbers.
So they reclassify unemployed people as no longer unemployed, right?
So if you give up trying to get a job and you just leave the workplace, you're no longer counted as unemployed because you have to be actively looking for work.
I mean, I guess if you die, you're no longer sick, but it sure as hell doesn't mean that you're healthy.
There's a failure to distinguish between the public and the private sector.
So, if the public sector goes on a hiring binge, then this is counted as a reduction in unemployment, even though it adds to the deficit, adds to the debt, and removes people from the workforce who might otherwise be actually producing things of value in the private sector.
So...
If you think that the public sector is the same as the private sector, then basically, well, I won't give you the metaphor, but it's not a good way to look at it.
And of course, if you ignore debt, then the numbers look a whole lot better than they actually are.
So let's have a look at some of the ways in which the unemployed are reclassified.
So according to the U.S. Department of Labor, 163,000 new jobs were created in July 2012.
Just pick a month.
The reality is that the U.S. lost over 1.2 million jobs that month.
Now, in the five months since June, 847,000 jobs were created, but 73% of those jobs were government jobs.
And remember, there are 150,000 people in the U.S. entering the workforce in any given month, and just graduating and whatever it is, turning that age.
And so if you take that out of the equation, the government jobs, right?
I mean, the government was working fine.
It's not like they need all these new people.
Lord knows they have enough people already.
So if you don't count the government jobs, there's been a half million deficit of jobs.
So since January 2009, the labor force in the United States has increased by 827,000, but those not in the labor force has increased by 8.2 million.
Understand?
People who are of working age, who used to be in the labor force, who are no longer in the labor force.
They've gone galt.
They've vanished.
8.2 million.
If you were to put those numbers back in, well...
So Barack Obama's been president for, I guess, a little over four years now.
The number of Americans not in the workforce has increased by nearly 8.5 million.
They've just vanished.
And they're no longer counted as unemployed.
But they were employed and they still have legal age to work or age to work.
And so the jobs gap is not closing.
It's all smoke and mirrors.
The U.S. lost 9 million private sector jobs during the Great Recession.
Since job growth has resumed, 5 million private sector jobs have been created.
Now, some of those, of course, are there to service the increase in the public sector.
But the level of private sector jobs remains 13 million below the pre-crisis trend, right?
So 150,000 jobs need to be created a month.
To keep up with the population growth.
Since the recession began, 30 million jobs have been lost, let alone the ones that needed to be created just to keep pace with population growth.
Here's how it looks.
This is a graph which has the trend going on in private sector payrolls.
You can see here in the black line that it's really gone down.
Of course, it's starting to go back up.
When the government Hires a whole bunch of people.
This stimulates private sector activity, right?
So if the government opens up, you know, the new department of, you know, Bobs, let's get everyone under 12, a Mohawk department of whatever, then they need buildings, they need computers, they need training, they need office equipment, they need furniture, all of this stuff stimulates.
But it's all nonsense.
It's all smoke and mirrors.
And it also drives up the price for everyone else.
All the stuff that's being supplied to the new made-up government workers, It's driving up the price for everyone else because it raises demand in an artificial way.
So it harms the private sector in a huge way.
So unemployment since the recession has only tended to drop because people are leaving the workforce.
It's not exactly what we want.
Almost 550,000 Americans leave the labor force in any given month.
So here's some more numbers, of course, since Jan 2009, 194,000 new jobs have been created.
In that time, almost 15 million people had been added to the food stamp rolls.
When Barack Obama first took office, long-term unemployed workers in the U.S., 2.6 million.
They were long-term unemployed, 2.6 million.
Now that number is sitting at 5.6 million.
There are, it depends the numbers, you go 88, I've seen 102, 88 million working-age Americans that are not employed and not looking for employment.
Just Sit on that number for a second.
I know it's staggering.
I've double-checked it.
There are about 88 million working-age Americans not employed and not looking for employment.
So the percentage of working-age Americans with a job has been under 59% for 39 months in a row.
Now, since the recession, and certainly since 2000, there's a rise of manufacturing capacity and free trade in two areas, China and India.
And this has been massively positive.
China's experienced single, high single, double-digit growth rates.
And in India, tens of thousands of people every month are being raised out of poverty as a result of free markets and free trade.
But because America and Europe have Very restrictive policies on manufacturing, right?
Lots of pseudo-environmental concerns, lots of legalese, lots of legislation to control for health and safety stuff, which is really not necessary.
Lots of things, unions and benefits and subsidies and all of that, pensions.
So a lot of manufacturing has fled.
So in 2000, about 20% of all jobs in America were manufacturing jobs.
Now that's down to 5%.
Manufacturing was the route out of the lower class to the middle class, right?
You get here, you're broke, you get a job in a factory, you work there for 40 years, your kids go to college, bingo, bango, bongo, you're in the middle class.
That avenue has dropped off catastrophically, and it continues to do so.
So 60% of the jobs lost during the last recession were mid-wage jobs, medium-wage jobs.
58% of the jobs created since then are low-wage jobs, right?
So they're taking away your sirloin and giving you a half-frozen vegetable patty, right?
So what's replacing what has been lost is not a one-to-one, right?
What's replacing quality jobs is crap jobs, service sector jobs and so on.
The US economy lost almost a quarter million small businesses during the recent recession, 220,000.
In 2010, the number of jobs created at new businesses in the US was less than half of what it was in 2000, and this is before Obamacare comes in, or I guess has come in.
America is losing half a million jobs to China every single year.
Now, of course, normally what would happen is if China was competing with you, you would People would get paid less in order to compete with China or you'd find some other ways to innovate.
But you're just losing jobs because it's illegal to pay less in many areas in the United States.
And of course the regulatory overhead is insane.
So this is truly astounding.
I mean, just mull this stuff over, particularly look at it from the standpoint of the hard-working poor, or the wannabe hard-working poor.
The U.S. has lost an average of approximately 50,000 manufacturing jobs every single month since China joined the World Trade Organization in 2001.
Lost 50,000 manufacturing jobs.
I actually went to China in 2000 for a business for about a month, and I could see all of this activity starting up, and I was like, ooh, I don't know that manufacturing is going to be a great place to be in North America anymore.
I made my career adjustments accordingly.
More than 56,000 manufacturing facilities in the U.S. have been shut down since 2001.
So, you know, a 40-year-old or 50-year-old factory worker, what are you going to do?
What are you going to do?
This is catastrophic.
This is not the result of the free market.
This is the result of status policies which have raised a protectionist wall around US manufacturing to the point where it cannot compete.
We can always compete with lower-waged people.
I mean, you can always compete with lower-waged people.
Because it's not like in India, the workers get 12 years full-time education.
It's paid for by the state, you know, I mean, for everyone who's in manufacturing there, they have massive amounts of undereducation in India, so why can't you compete?
Well, you can, it's just the government doesn't allow you to because there are too many restrictions on opening and running manufacturing facilities.
About 20% of all U.S. adults are currently working jobs that pay poverty level wages.
I mean, they're functional serfs in the economy and it's completely tragic.
More than 40% of Americans who actually are employed are now working in service jobs, which are often very low-paying.
Again, really tragic.
Less than 25% of all jobs in the U.S. are good jobs, and that number continues to shrink.
And this includes government jobs.
Again, take that out of the equation.
I mean, it's just catastrophic.
More than half of all small business owners in America, quote, say they would not start a business today, given what they know now and in the current environment.
Talk to doctors, too.
Oh, my God.
So we really are facing the involuntary end of employment for massive sections of the population against their will.
I mean, just look at, you know, you ask for 300 jobs.
You say 300 jobs are opening here, you'll get like 30,000 applications.
People want to work.
They're just not allowed to by force.
In the U.S., more than 41% of all working-age Americans are not working.
How sustainable is this?
If you gather together all of the workers that are officially unemployed in the US into one nation, they would be the 68th largest country in the entire world.
So, the public sector has grown enormously, and the public sector...
I mean, let's just take the classic state model.
I'm not a statist, but let's take the classic state model that a certain amount of the public sector is necessary for the economy to function.
Let's say that roads need to be done by the state and other kind of things, infrastructure and so on.
So let's say that.
Of course, the government is way, way, way beyond where it used to be in terms of...
It's at least 50 to 75 times what it was to provide those services in the past.
So a growth in the public sector comes at the huge expense of the private sector.
And that expense shows up in many ways.
So clearly the private sector has to pay more taxes or there's more debt or more inflation to pay for the public sector.
You have transferred people from being productive in the private sector to being parasitical in the public sector.
You've driven up prices in the private sector for all the resources devoted to the public sector.
I mean the list just goes on and on.
And of course, you're training people in skills for the public sector, which if and when they lose their jobs in the public sector, they have to be retrained.
It's a whole mess.
So total compensation costs for management, professional, and related occupations.
Half of all state and local governments employed averaged over $50 per hour worked.
And we use the word worked here in the loosest possible sense.
State and local government employees spent an average of $41.56 per hour worked for employee compensation in September 2012.
Total employer compensation costs for private industry workers, instead of being $41.56 or $50.43, were $28.95, September 2012.
In the US, the average federal worker now earns 60% more than the average worker in the private sector.
And again, being a libertarian means always being sorry that you're right.
It's like being a doctor telling some guy, stop smoking, stop smoking, stop smoking.
Oh shit, you have lung cancer.
I'm sorry that I was right.
I know I was going to be right.
I'm sorry that I'm right.
And this is clear.
There's no limit fundamentally to rising prices in the public sector.
There's no competition.
There's no investors who can take their money elsewhere.
There's no We're going out of business, so of course they're going to earn a whole bunch more.
That's how you buy votes.
This is the foundation of the Democrat Party.
In 2006, only 12% of all federal workers made 100 grand or more per year.
Now 22% of all federal workers do.
U.S. public pensions are $4.6 trillion short of the amount of assets needed to cover projected liabilities.
So they got a whole bunch of money, and they're supposed to invest that money, and they're supposed to pay They're retirees out of that money.
They're way underfunded.
Of course, they lost a lot of money in the recession, and they're allowed to do these crazy calculations where they're allowed to say, ooh, I'm going to get an 8% return on investment, which hasn't been seen for decades, and they're just vastly underfunded.
This is, of course, back to go and pillage the last kidney out of the last taxpayer to pay for all this nonsense.
Because pensions are a way of buying peace with public sector unions and private sector unions at the expense of the unborn, who have no say in the matter, can't vote, and don't even exist yet, right?
Because you're kicking the can down the road when you give people pensions instead of wage increases, as is debt, right, fundamentally.
So private sector job losses dwarf government gains.
So since the start of the recession, the government has added 590,000 jobs.
And the private sector has lost almost 8 million jobs.
Since the Recovery Act, the government has added 400,000 jobs.
The private sector has lost 2.65 million jobs.
The private sector is where you really need to look for the economic recovery.
You cannot get economic recovery coming from the public sector.
That's like replacing your heart with a cancer.
What is the payroll change since January of 2008?
Private sector has gone down minus 4%.
All government has gone down minus 2%.
Federal government, excluding the post office, has gone up almost 12%.
This is just all the manipulation.
They're going to hire like crazy so they can bring their numbers down and everyone at the Huffington Post can pretend that socialism works.
The US share of global GDP has fallen from 31.8% in 2001 to 21.6% in 2011.
Do you understand?
This is a complete catastrophe.
It's gone down nearly a third in only 10 years.
This is an utter collapse of the economy.
61% of all Americans were middle-income back in 1971.
Today, only 51% of all Americans are.
Again, this includes the public sector.
As we've mentioned in 1950, 80% of all men in the US had jobs.
Now less than 65% of them have jobs.
One out of every four American workers makes $10 an hour or less.
Ten dollars an hour or less.
This is after the robot revolution.
This is after the computer revolution.
This is after the internet revolution.
This is after the most massive potential gains in productivity that has ever occurred in the history of the world, in the history of any kind of economics whatsoever.
And all of this has been diverted in a mad, violent plunge to attempt to redress social problems with the infinite, brutal, unsubtle club of government force.
And this is the result.
This is not what was planned, but this is what was predicted by anybody who had any sense of ethics, property in the free market.
Payroll change.
This is from July 2012.
Payroll change since January 2008.
Minus 5 million.
In the private sector, minus 4.61 million, right?
So total payroll change has been minus 5 million.
In the private sector, it's been the vast majority of that.
4.6 of that 5 million is in the private sector.
The government has gone down 400,000 and change.
The federal government, as we mentioned, has gone up 225,000 people.
Okay, so this is startup jobs created for 1,000 Americans, broken down by President.
Bush Sr., Clinton, Bush Jr., and Obama.
So let's look at how these numbers break down.
Bush Sr., 11.3.
Clinton, 11.2.
Bush Jr., 10.8.
Obama, 7.8.
And that's not to pick on Obama.
I mean, you know, he, in a sense, was promoted Captain of the Titanic when it was three inches above the water.
But you can see that these are really catastrophic numbers.
77% of Americans are living paycheck to paycheck at least some of the time.
This is not how it was supposed to be.
Medium household income in America has fallen for four consecutive years.
Overall, it has declined by over $4,000 over the last four years.
Completely catastrophic.
And this is a time of increased debt.
36% of Americans say that they don't contribute anything to retirement savings.
A, they don't have the money, and B, they still believe in the mirage of Social Security.
Twenty-four percent of American workers say they have postponed their planned retirement age in the past year, the ancient city of the New World.
Forty-three percent of Americans have less than $10,000 saved up for retirement, which isn't going to do any good to you at all.
28% of all Americans do not have a single penny saved for emergencies, and this means that they're hanging by a thread above the chasm of falling out of even the lower classes into the dependent classes.
So, 40, 50 years ago, America, like most of the West, launched a massive program to accelerate the end of poverty.
Poverty was already being solved in the post-war period.
This was to accelerate the end of poverty.
Now, Violence achieves the opposite of what you want it to achieve and what has been the result of the war on poverty.
Well, in the U.S. today, around 100 million Americans are considered to be either poor or near poor.
Back in 2007, 19.2% of all American families had a net worth of zero or less than zero.
By 2010, that figure had soared to 32.5%.
40% of all Americans have $500 or less in savings.
Right?
You grow the economy primarily through putting money in the bank, which then gets lent to entrepreneurs who start new businesses, who provide new services, who invest in capital improvements to become more productive, who invest in education for their workers, whatever it is.
You ain't saving, you ain't growing.
And you ain't saving.
About 10 million households in the U.S. don't even have a single bank account.
Kind of off the grid, and not because they're super wealthy.
The U.S. has a higher percentage of workers doing low-wage work than any other major industrialized nation.
In 2010, 2.6 million more Americans fell into poverty.
Largest increase ever seen since the U.S. government began keeping statistics on this back in 1959.
Violence achieves the opposite.
You made your war on poverty, you will swell poverty.
And this has huge results.
I mean, these kinds of catastrophic wealth losses and losses of opportunity have huge results on things as fundamental as marriage.
There are now 20.2 million Americans that spend more than half their income on housing.
That's a 46% increase from 2001.
Only 51% of all Americans that are at least 18 years old are currently married.
Back in 1960, this was 72%.
And marriage, of course, is the foundation for the mental, physical, social, emotional health of your children, and this is really just producing more people who are going to have much higher risks to be criminals, drug addicts, abusers, and problematic bullies, and you name it.
In 1984, the median net worth of households led by someone 65 or older was 10 times larger than the median net worth of households led by someone 35 or younger.
So the gap between those who'd accumulated resources over the course of their life and those who were kind of just starting out or in the process of starting out was about tenfold.
Now the median net worth of households led by someone 65 or older is 47 times larger than the median net worth of households led by someone 35 or younger.
And this is why I say Social Security is a complete boondoggle because there's no money saved for it.
It's basically just a dusty bunch of IOUs that have to be taken out of the kidneys of the young.
So people who are much poorer relative to the baby boomer retiree population, which is the wealthiest population the world has ever seen, the young are being taxed who have much less money to pay for the retirements of the old who have way more money as a group.
I mean, this is a completely regressive tax.
So debt, we had a look at this earlier.
Let's break this down a little bit more.
Total consumer debt in the U.S. has risen by 1,700% since 1971.
In 1983, the bottom 95% of all income earners had 62 cents of debt for every dollar that they earned.
You want something, you pay for it.
Credit is the devil's handshake.
At least that's how it was when I was growing up.
So, in 1983, bottom 95% of all-income owners had 62 cents of debt for every dollar that they earned.
By 2007, that figure had soared to $1.48 of debt for every dollar that you earn.
One-third of all Americans are currently not paying their bills on time.
43% of all American families spend more than they earn each year.
This is just household debt, not corporate debt, not government debt.
After adjusting for inflation, U.S. college students are borrowing about twice as much money as they did a decade ago.
College debt outstanding is at around a trillion dollars.
Again, it's not that they have a failure to launch.
It says there's no place for them to land when they get out of college.
It's 85%, as we'll see, of college students who move back in with their parents.
46% of all Americans carry a credit card balance from month to month, the infinite payment of compound interest.
Of the U.S. households that do have credit card debt, the average amount of credit card debt is a truly shocking $15,799 at interest rates ranging from 13 to 18 to higher percentage.
That's astonishing and astounding and incredibly hard to pay off.
Americans are carrying a grand total of $798 billion in credit card debt.
So if you were alive when Jesus was born, you spent a million dollars every single day.
Since then, you still would not have spent $798 billion by now.
That's a lot of money.
45% of all auto loans are made to subprime borrowers.
Ooh, that worked well with the housing market, didn't it?
The ratio of household debt to personal income in the U.S. is now 154%.
If that doesn't make your jaw drop and you'd have reached for a bar of gold, read it again.
Cancer of inequality is growing enormously.
We have become a, you know, a Morlock kind of society.
83% of all U.S. stocks are in the hands of 1% of the people.
66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.
Only the top 5% of U.S. households have earned enough additional income to match the rising housing costs since 1975.
For the first time in U.S. history, banks own a greater share of residential housing net worth in the U.S. than all individual Americans put together.
The bottom 50% of income owners in the U.S. now collectively own less than 1% of the national wealth.
We cannot build a society on this kind of inequality.
It will fall over and it will fall on the poor, as it always does.
People who focus on the free market are really the only people who care about the poor.
Not in appeasing the poor, not in giving the poor stuff, not in drugging the poor with free stuff, but in actually creating conditions wherein the poor can help themselves.
Stop giving them fish.
Give them the lake and the capacity to fish.
They'll be fine.
But this idea that we're going to use government power to help the poor has just created a situation of imminent catastrophe for the lower classes.
In the United States today, corporate profits are at an all-time high.
The percentage of Americans that are living in extreme poverty is also at an all-time high.
Corporations are making and sitting on a hell of a lot of money, and one of the reasons they're not spending that money Is something called regime uncertainty, which is what the hell is going to happen next from the legal system, from the law system, from the regulatory system, from the tax system, from you name it.
They don't know, so they're waiting, and there's not that much demand because there's so little money sitting out there among the people.
More than 100 million Americans are enrolled in at least one welfare program run by the federal government, not even counting Social Security or Medicare.
Back in the 1970s, about one out of every 50 Americans was on food stamps.
Today, about one out of every 6.5 Americans is on food stamps.
I mean, this is late Roman Empire.
Bread and circus is crap.
It's just astounding.
One-fourth of all children in the United States are enrolled in the food stamp program.
Hey, didn't get rid of daddies, just do wonderful things for the family.
21% of all children in the U.S. are living below the poverty line in 2010, the highest rate in 20 years.
This is after a 40-year war on poverty.
Median household income for families with children dropped by $6,300 between 2001 and 2011.
And this counts public sector workers who've had massive increases.
Half of all American children will be on food stamps at least once before they turn 18.
The number of Americans living in poverty has increased by about 6 million over the past four years.
About, as we mentioned, one out of every four workers in the U.S. brings home wages that are at or below the federal poverty level.
Almost 60% of all children in the U.S. are living in homes that are either considered to be low-income or impoverished.
The number of children living in poverty in the state of California, for instance, has increased by 30% since 2007.
In the city of Detroit today, the smoking crater center of experiments in central planning and endless socialist tinkering.
In the city of Detroit today, more than 50% of all children are living in poverty, and close to 50% of all adults are functionally illiterate.
They can still vote, you see, but they're functionally illiterate, which is why you have to give them phones, I guess.
49% of all Americans live in a home where at least one person receives financial assistance from the federal government.
This is why you can't cut these programs.
I mean, the programs will be cut.
Mathematics will do a fine job of cutting the programs, but you can't cut them politically, unless you actually have a bald-faced, reality-based conversation with the American voter.
But unfortunately, The American voter has been trained by the government to believe in the government for 12 years, so you would first have to dismantle the propaganda, and that takes a huge amount of work, certainly longer than your average election cycle.
But unless you are willing to have an absolutely frank discussion with the neediness, dependence, and ignorance of the American voter, it's not going to change.
And what politician is going to want to do that?
Right, so in 1983, it was less than 30% of Americans lived in a home with one person receiving financial assistance.
Now it's almost 50%.
The number of Americans living in poverty rose to a new all-time record of almost 50 million.
During 2011, 53% of all Americans with a bachelor's degree under the age of 25 were either unemployed or underemployed.
And again, this counts those who got jobs in the public sector.
85% of all college seniors plan on moving back in with their parents after graduation.
Yay!
Life never starts.
Now, the real inflation rates have been estimated at 10% per year.
So not only is there a lot less money, but the money is worth a lot less in and of itself.
So if you have a 10% inflation rate per year, the value of your money gets cut in half in only seven years.
This is catastrophic.
So on average, you could buy about 10 gallons of gas for an hour of work back in the mid-90s.
Now, the average hour of work will get you less than six gallons of gas.
To get the same purchasing power that you got out of $20 back in 1970, you would have to have more than $116 today.
Do you see how much the value of money has gone down because of all of this printing and all of this debt?
And all of this debt and all of this printing accumulates value in the upper classes at the expense of the lower classes and the unborn, the two most vulnerable sectors of society.
The state is an illusion and a lion that lies to you and preys on the weakest.
Says it only cares about the weakest, it will end up preying on the weakest.
This, of course, is a central reason, as I mentioned before, why savings are so low.
Government debt, i.e.
your children's debt.
During 2012, the US government had to roll over nearly $3 trillion of old debt.
The US national debt is now more than 22 times larger than it was when Jimmy Carter became president, where it was relatively peanuts.
During the Obama administration, the US government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.
And please, let's not hear anything about how Bill Clinton's Administration produced a surplus that was all nonsense.
That surplus was financial scum jiggery, and also because there was a huge tech boom, taxes went up, but it was all a bubble, so I hope I won't get too much nonsense about that.
If the federal government began right now to repay the U.S. national debt, not even counting interest, at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.
In other words, three showings of The Hobbit.
If Bill Gates gave away every single penny of his fortune to the US government, it would only cover the US budget deficit, not the debt or the operating expenses, the budget deficit for about 15 days.
It's never going to be repaid, people.
The US national debt is increasing by about $150 million every single hour.
So I'd better hurry up or I'm going to be $160 million worth of podcasting.
During fiscal year 2012, 62% of the federal budget was spent on entitlements.
Entitlements.
Can't cut the government without cutting entitlements.
And this whole Republican plan of, well, if you don't increase taxes, you will cut government spending.
It's all nonsense.
In 1965, only about one of every 50 Americans was on Medicaid.
Today, one out of every six Americans is on Medicaid.
Can you believe it?
A government program grew and went over budget.
First time for everything, I guess.
So this is, as Doug Casey's mentioned, this is the Greatest Depression.
The condition of the U.S. economy today mirrors the economic situation prior to the Great Depression.
So there's slow economic growth, massive deficits, high unemployment and foreclosures, and a shaky banking system.
Real unemployment, not the magic monkey numbering that goes from the government's statisticians, real unemployment is at the same level it was during the Great Depression, which is at about 25%.
But now, the drop in house prices and sales is actually worse than it was during the Great Depression.
And the stock market has been dropping, and stocks are currently overvalued as much as 50%.
And youth unemployment, of course, in the US is now at the highest level that we've seen since World War II. Ah, but it's even worse in some ways.
Because the Great Depression in the 1930s didn't have any of the structural, economic, and social problems, nor the massive unfunded liabilities and obligations.
In 1929, just prior to the Great Depression, manufactured by the Federal Reserve, America was not $16 trillion in debt.
It was not facing over $100 trillion in unfunded liabilities.
So the amount of money that the government has committed to pay that it can't pay, is $360,000 per citizen.
Not per household, not per co-joined twins, per citizen.
In 1929, most of the states were not bankrupt, insolvent and dependent on 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.
That ball is still rolling down towards Indiana Jones.
These unfunded liabilities of the future are far worse than our existing problems.
In 1929, there were not 21 million government employees with bloated salaries, obscene pensions, and free health care for life.
As I mentioned before, one out of five federal employees earn over $100,000.
In 1929, there was no such thing as Social Security or Medicare or Medicaid.
The federal government did not have these obligations written into law that threatened to consume the entire federal budget within a few years.
So not only are we in the same place as right before the Great Depression of the 1930s, but we're in a far worse place because of all of the unfunded liabilities and social programs.
So, while Barack Obama has been president, the U.S. government has spent about $11 for every $7 of revenue that it has actually brought in.
Over the past four years, welfare spending has increased by 32%.
In inflation-adjusted dollars, in real dollars, spending on welfare programs has risen by almost 400% over the past 30 years.
How's poverty doing?
Well, it's increasing.
It's one of these weird things.
I remember a long time ago I had a conversation with a friend of mine.
He said, you know, there are far fewer agricultural subsidies in country X rather than here.
And he's like, well, here, of course, because of the agricultural subsidies, our food is cheaper.
Because that's what seems to make sense.
Well, we're spending more money on the poor, therefore we should be solving the problem of poverty.
I mean, it's how it works when I go to buy bananas.
If I spend more money on bananas, I get more bananas.
But that's the free market.
In the government, everything is reversed.
When you have put violence into the mix, coercion, monopoly, powers, Everything you spend produces the opposite effect.
It's a weird, backwards, upside-down universe.
The moment you start punching your friends, they ain't so friendly.
The moment you lock someone in the basement, they kind of want to get out.
Whatever you do using violence produces the opposite.
And so this has been predicted for many years by people far smarter than I. And so as you increase government spending on poverty, you will expect A concomitant increase in the amount of poverty.
When you spend government money fighting drugs, you will expect an increase in the amount of drugs being bought and sold.
When you spend government money to reduce the price of healthcare, you will expect the price of healthcare to rise.
Violence produces the opposite.
If the Federal government used gap accounting standards like publicly traded corporations are forced to do by the government, right?
Remember, the government is all about setting up rules that exclude you.
The real federal budget deficit for 2011 would have been $5 trillion instead of $1.3 trillion.
Don't believe anything that they're telling you.
Don't believe anything that they're telling you.
It is far worse.
But of course, those who are in the upper classes, in the media classes, in the political classes, they need you to pretend that there's a recovery, that the green shoots are not the fingers of zombies coming up to strangle you.
They need you to believe this stuff so that you won't panic, to prop up the stock prices, to keep them going for another year or two in office.
This is the captain of the Titanic telling everyone at a 30-degree angle, everything's fine, don't worry about it.
It's because he wants to get to the lifeboat.
I don't believe anything that they're telling you.
The United States already has more government debt per capita than Greece, Portugal, Italy, Ireland, or Spain.
The pigs of Europe.
The U.S. government is responsible for more than one-third of all the government debt in the entire world, what, with 5% of the population?
The amount of U.S. government debt held by foreigners is about five times larger than it was a decade ago, and they're only holding onto that debt.
They're only holding onto these bonds because the moment they start selling it, they'll have to record the resulting loss in value in their books, and they'll go into heavy deficits or even worse deficits.
Between 2007 and 2010, U.S. GDP grew by 4.26%, but the U.S. national debt soared by 61%.
And again, that GDP includes crap like healthcare.
Healthcare is not – it's a cost.
It's not wealth.
And it includes government spending and government employees and so on, which is – anyway, I think I made that point.
So, let's start summing up.
The national debt is now more than 37 times larger than it was when Richard Nixon took the U.S. off the gold standard.
Funny, you know, when you can print whatever money you want, you tend to print more money.
The national debt is now more than 5,000 times larger than it was when the Federal Reserve was first created.
Federal Reserve, I know everyone keeps emailing me and says it's a private institution.
It is not a private institution.
It is not a private institution because it has monopoly powers granted to it by the state.
The national debt jumped more on the very first day of fiscal year 2013 than it did from 1776 to 1941 combined.
Let me say that again.
It's really, really important to understand this.
The national debt jumped more on the very first day of fiscal year 2013, first day, than it did from 1776 to 1941 combined.
What with a civil war and World War I and the Great Depression and World War II. One day.
These are end times.
My calendar should have had an American flag on it.
Historically, the interest rate on 10-year US Treasuries has averaged 6.68%.
If the average interest rate on the government debt rose to that level today, the government would have to spend more than a trillion dollars a year just on interest on the national debt.
But they're crushing it.
You don't have a free market when two fundamental things are controlled by the government.
You have a fascist system.
If the government controls interest rates, You don't have a free market.
If the government controls money, you don't have a free market.
Because money and interest are the two foundations, the two signals, the two most important elements of stability and predictability that are needed to have a free market.
So once the government has those things, you know, a guy's heart beats for a second or two after his head gets cut off, but doesn't mean he can win a marathon anytime soon.
Boston University economist Lawrence Kotlikoff is warning that the U.S. government is facing a gigantic tsunami of unfunded liabilities in the coming years, that we are counting on our children and our grandchildren to pay.
No, no, no, they won't be able to because they can't get jobs.
They live with their parents and they have a trillion dollars of student debt to pay off.
Kotlikoff speaks of a fiscal gap which he defines as the present value difference between projected future spending and revenue.
His calculations have led him to the conclusion that the federal government is facing a fiscal gap Drumroll, please.
Drumroll of death of $222 trillion in the years ahead.
The US tax code is now more than 3.8 million words long.
William Shakespeare's works are about 900,000 words long.
The value of the U.S. dollar has declined by more than 96% since the Federal Reserve was first created.
The money, of course, the difference goes into the pockets of the wealthy.
Corporate profits as a percentage of GDP are at an all-time high.
Wages as a percentage of GDP are near an all-time low.
Of course, with government debt, with government manipulation of interest rates, with government printing of fiat currency, you get this whole tumoresque government-facing financial sector, which Is completely catastrophic for the economy as a whole, right?
So you can just go screw around with the financial sector to get profits in the short run rather than investing in labor, capital, and so on.
So the fact that corporate profits are going up and wages are going down is entirely the result of this fascistic control of the economy.
You see this all the time when fascism takes over.
Wealthiest 1% of all Americans own more wealth than the bottom 95% combined.
This is aristocracy and serfdom, right back to the Middle Ages, but with an iPad.
The wealthiest 400 families in the U.S. have about as much wealth as the bottom 50% of all Americans combined.
The six heirs of Walmart founder Sam Walton have a net worth that is roughly equal to the bottom 30% of all Americans combined.
So how are the American people doing?
Well, you know, despite the gossamer delusion rainbow webs that the media is consistently trying to spin over your rational eyeballs, people are seeing through the smoke and mirrors, which is why I say we know all this.
We know all this deep down.
I did a video years ago called There Will Be No Economic Recovery.
And again, being a libertarian, being an anarchist means always hating to be right, but knowing that you're going to be right.
More people now feel that the U.S. is in a recession than they did in October of 2008.
Almost 70% of Americans think we are in a serious or moderate recession, while 13% still believe it's a mild one.
But they all have government jobs, I'm sure.
71% of all small business owners believe that the U.S. economy is still in a recession.
Almost half of Americans believe that another Great Depression is likely within the next 12 months.
And a lot of the economic, quote, growth that we see is just being propped up by wild and massive government self-financing through the Fed, buying up a whole bunch of treasuries, and it's crazy.
The government threw trillions at the giant banks, including foreign banks.
The big banks used a lot of that money to speculate in commodities, including food and other items, which is now driving up the price of consumer necessities.
Right, so the government gives all this money to the banks, the banks then use that money to speculate.
They're certainly not going to lend it out to businesses who don't want to grow because of regime uncertainty.
The banks will end up speculating in commodities, just driving up those prices, and so you pay for the money, or your children pay for it, it goes to the banks, and then you also pay for the increased prices in whatever you buy, because the banks are using your tax money to speculate in the market.
There are some indications that we are hitting bottom, and that's good, right?
This is such a terrible addiction to state power and coercion and lies and propaganda manipulation and fantasy, but eventually all addicts, if they don't die, which is not going to happen, they hit bottom, right?
They wake up with a hooker's panties next to the body of a wolf in a ditch in Vegas, and they're like, whoa, maybe I should cut back on the blow.
So, only 23% of all Americans believe that the government is the solution to the problem.
And again, most of those have government jobs, I'm sure.
64% of all Americans believe that the government is the problem.
So, we're in the beginning stages of actually admitting that there is a problem and having some sense of what the problem is.
Fantastic.
Congress, as we mentioned, has a 5% approval rating, so that's good.
I know this has been a hopefully not too tough presentation to watch, but this is all very, very important to know, to understand, and to accept, and to appreciate.
These are the realities.
You need to take care.
You need to take care to know what the truth is about the world that you're living in.
You need to take care to protect yourself from what is coming as best you can.
Get some gold, get some food, get friendly with your neighbors, build up a community.
You know, I think one of the major reasons that the American government wants to drive Gun control is because they know that there's going to be a lot of problems when the money runs out.
And the money is going to run out.
There is no way about it.
There is no way to stop it politically.
It is too close, too big, and the population is still too fantastical and unreal in their thinking to be able to reason with.
So this is going to have to be one of those times where it is a hard bounce to a more real and more virtuous place.
So thank you so much for watching and listening.
If you would like to check out more I'm the winner of the 2012 Liberty Inspiration Award ahead of Ron Paul, Tom Woods, and Antonio Beeler.
So thank you everyone who wrote in for that.
Freedom Aid Radio is my show and my listeners' show.
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