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Washington’s Addiction to Uncle Ben’s Funny Money™

Welcome to America's Total Dependency Economy.

by
Stephen Green

Bio

January 13, 2014 - 11:13 am
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The United States is evolving from the most production nation in the world to a nation which does not work. Welcome to the Total Dependency Economy.

You’ve probably already seen December’s dismal jobs report. The headline number looked pretty decent at 6.7, down three tenths since November. But not even the panel on MSNBC’s Morning Joe could mask the disheartening numbers below the headline. Joe Scarborough called last month’s 74,000 net new jobs “a horrific number,” and Michelle Caruso-Cabrera added that the report was “very, very bad.”

Worse was the labor force participation rate as spotlighted by the scary-ass chart above from the Federalist, which dropped to a 35-year low. And perhaps most frightening was the fact that another 347,000 Americans left the labor force last month, some due to age but many due to despair. Cox Radio’s Jamie Dupree notes that for the last quarter of 2013, the labor force shrank by an ominous average of 45,000 a month. October looked strong as 659,000 people entered the workforce for a change, but that gain was utterly wiped out in November and December, when not even the promise of temporary holiday work could tempt people back into the labor pool.

We can excuse some of December’s lousy figures on the lousier weather, but AEI’s James Pethokoukis says the weather isn’t entirely to blame:

In December, the labor force participation rate sank to 62.8% vs. 63.0 % in November and 63.6% a year ago. If the participation rate had stayed steady the past 12 months, the jobless rate would be 7.9%. The entire jobless rate drop from last month was due to workers fleeing the workforce. And don’t blame the weather for this one.

The big debate in Washington — aside from Bridgegate that is — is over just how long to extend unemployment benefits. Republicans are eager to allow a three-month “temporary” extension, to give Congress and the White House time to find corresponding budget cuts. The White House doesn’t want any cuts anywhere, because even with continuing record deficits, cowboy poets must also remain dependent on Washington’s largess. The State Department last year spent $5.4 million on “exquisite crystal glassware.”

Meanwhile, a record 92,000,000 Americans aren’t in the labor pool, and total employment remains below where it was at the start of 2008, before the Great Recession.

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All Comments   (13)
All Comments   (13)
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"What will it look like when America finally hits our rock bottom?"

Gotham city in the first Batman. Maybe a crappier version of blade runner. Weimar republic?

Contemplate this - there are millions on the dole. Generations that have never held a job. They know nothing but pick up the EBT card, and welfare check.

What do you think will happen when the music stops? No EBT. No nothing. No post office, or a post office with drastically shorter hours.

The Gumint will HAVE to change. This isn't the 30's. There will be nowhere to borrow money, there will be no printing our way out.
1 year ago
1 year ago Link To Comment
When the checks stop the riots will begin. Since the welfare recipients are concentrated in the blue cities while the guns are concentrated in the red rural areas, this will be a self-correcting problem.

It will horrific, but the idea of limousine liberals being hoist by their own petard lightens the horror a bit.
1 year ago
1 year ago Link To Comment
I just finished reading "Extraordinary Delusions and the Madness of Crowds" by Charles Mackey. Wonderful story about the real John Law, who talked the keepers of $ in France into a paper scam for a New Orleans venture. It read like a prelude to what has and is happening here, albeit on a smaller scale. Take notice!

I cannot recommend the book highly enough (the story of Law is just one section)
1 year ago
1 year ago Link To Comment
Interesting thing about lots of the 'manias' described in the book is how they really got started once Government poled its nose into what were once private ventures. John Laws Mississippi paper money project was doing fine as a private venture. The script was backed by hard assets. But the French government took over Law's private bank and it became the Bank Royale and the French government decided to back the script with its "guarantee". Only then did things spiral out of control. Similarly, the Dutch 'tulip mania' had its nexus in two Government decrees. The first banned 'short selling' which made the tulip market a one-way bet. The second was a proposal being debated by the Dutch government just prior to the tulip market going crazy. That proposal would have allowed buyers of tulip contracts to void their contracts by paying a small fee. This proposal would have changed the tulip deals from futures contracts into options. Anticipating that this proposal would become law, speculators bid up prices to eye-popping levels, believing that if things continued going up they'd make money on the deal and if things went bad they'd be able to void the contract under the new law. To really screw up on such massive scales usually requires Government.
1 year ago
1 year ago Link To Comment
Gone in four minutes, dirtbag!
1 year ago
1 year ago Link To Comment
The FRB policy of maintaining near-zero interest rates combined with "stimulus" through deficit spending is EXACTLY the same policy the Bank of Japan followed in their own banking crisis which began over 20 years ago. The result was known as the "Lost Decade" of growth, but in truth Japan has never really completely recovered OR weaned itself off the cheap money.

One definition of insanity is continually doing the same thing but always expecting a different result.

Artificially low interest rates force money out of the bond market to seek returns in equities, giving us the illusion of prosperity as the equities markets boom on the new-found cash. But private capital formation has never recovered from the banking crisis, and it is that which actually fuels the investment that leads to growth.
1 year ago
1 year ago Link To Comment
These low interest rates have destroyed traditional savings. When I was in college back in the late 80s, I had a $10,000 CD that paid me $63 in interest per month. Today, a $10,000 CD at my local bank will give me $3.50 per month.
1 year ago
1 year ago Link To Comment
Yeah, no work, the IRS is attacking us, the government is spying on anything that moves and China and Iran are taking over the world...but, but...a traffic jam in New Jersey!!!
1 year ago
1 year ago Link To Comment
"What will it look like when America finally hits our rock bottom?"

Dare I say, it won't be pretty!
1 year ago
1 year ago Link To Comment
How about "the end of civilization as we know it"?
1 year ago
1 year ago Link To Comment
I keep on posting this here, we keep on getting closer to it's needing to be considered.

awrm.org
1 year ago
1 year ago Link To Comment
They are Bernankebux, not funny money.

But going forward I guess it's YellenCoin.
1 year ago
1 year ago Link To Comment
Seven trillion more in debt has failed to break the spell
But now we know how much it costs to pave the road to hell
1 year ago
1 year ago Link To Comment
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