Millions of Americans remain unemployed, US bankruptcies have reached a five year high, China slashed US bond holdings by the largest amount to date and US home sales have plummeted to the lowest level on record.
What does this mean for America? Roger Hanwehr, the managing director of ArcXeon Investments argued that the US is in the midst of a double digit recession.
“We have a jobless, growthless, synthetic recovery characterized by uncertainty of the markets and no improvement in the underlying macroeconomic weaknesses that lead to the crisis of 2008,” said Hanwehr.
He argued that the US is worse off today than it was two years ago. Accumulated debt is up; millions have been spent on bailouts and wars, interest is accumulating, the dollar is weak, industrial output is down and consumers are not spending in the economy.
The pattern today is similar to the 1970s and 1980s argued Hanwehr. There are issues with monetary supply, banks are hording cash and consumers have less to spend in the market.
“The underlying fundamental weaknesses and the systematic instability in the markets need to be addressed,” said Hanwehr.
Hanwehr argued that there are key measures the government should have addressed during the bailout and didn’t’ such as the generation of public sector jobs and a forced buybacks of US debt abroad.
Many presidents in the past have been blamed or given praise for economies that were created based on earlier long term policies; including both former presidents Jimmy Carter and Ronald Reagan. The economy is a long term issue.
What is to blame for the recession?
“Approximately 20 years or not dealing with underlying weaknesses in the US’s trade imbalance with China, in monetary policy and in overall stimulation of our economy, particularly in the areas of infrastructure, IT and high technology which were abandoned due to the prosecution of multiple wars rather than looking at our internal weaknesses hear at home,” said Hanwehr.
Attorney and blogger Michael Snyder of TheEconomicCollapseBlog.com argued that the US is headed for a full economic collapse and that it is only going to get worse moving forward.
“This is the result of a long term economic cycle and were headed for even worse times in the future,” he said.
He argued that in the long-term people should be stocking up on food and supplies, because the US government is staggering in debt and the economic problems will only get worse.
“People are going to have to do whatever they can to get independent of the system,” said Snyder.
Most Americans are optimistic that the economy will soon recover and begin to improve; Snyder disagrees, arguing that we are witnessing a complete meltdown of the financial and economic systems.
“Things are getting to a point where the United States government is simply going to run out of money,” said Snyder.