Has America stopped thinking?
We live in a nation where the reported unemployment rate is about 17% percent but the media reports the subset number only counting those receiving benefits for a relatively short period of time.
We live in a nation where the sales to New Home Contruction, Steel Manufacturers, and Autos are down 80%, 60% an 50% and we are only reporting the current condition as a Recession due to the fact that government is ramping up spending with money it doesn't have.
We live in a nation where we are trying to apply historical precedants to a condition that has no precedent.
The problem is very simple my friends...in the past 10 years, the banking system infected our economy with so much debt that I estimate that 80% of America doesn't qualify to borrow any more money. That includes 80% of our cities, counties, states, businesses, and citizens.
THE AVAILABILITY OF DEBT IS NOT THE PROBLEM......there is lots of money available for those who qualify, it is simply that so few qualifiy to borrow. The fact that revenues are now shrinking, the problem is getting even worse as the prior debt accumulation remains outstanding being serviced by lower and lower cashflow.
In the past ten years our banking system simply infected our country with a debt load it simply can't pay back and it will be mathematically impossible for the remaining debt free citizens to support the American economy. Because of credit default swaps, the banks didn't care who they lent to and little was considered at the time about the consequences.
Debt Creation was the business of America between 2000 and 2008.
In some nations, even this would not be too significant a problem, but in a nation like ours where over 70% of the population lives paycheck to paycheck, AND much of the economy is driven by credit creation....having 80% of your population Zombulated is a serious issue. Included in this 80% number is the 1/3 of Americans dependant on government for income.
How can a sane person think a municipality can borrow necessary funds when revenues are shrinking so fast that it can't even service current debt? If Bernanke really wanted to help American families and address the issue, he would cut credit card rates to 1% or less....not much different than the help he is giving his banking buddies on Wall Street.
You see Benny the B keeps telling you that he is making credit available, but that is not important when so few qualify to borrow. It is like a doctor telling a starving person about to die that he has checked his heart and all is fine.
All is not fine. Most of our nation is now Zombulated. As millions lose jobs, more and more will become insolvent and stop contributing to the economy.
Avanta just cut credit cards to 1,000,000 small businesses. Credit Card companies are slashing credit to millions of Americans. Banks are calling in their lines of credit to business. Few qualify for home equtiy loans.
Look around you, the country is shutting down because our government leaders are misdiagnosing the problem. As more and more default on their debt, you will likely see many more banks shutting down, more homes being foreclosed, more businesses shuttering, and much more distress as incomes and ability to borrow evaporates and values continue to crash.
Until we start addressing the issue of excessive debt, and start purging the debt in an accellerated fashion, our nation will continue to shut down until there will not be much functioning for anyone.
None of this is hard to see if you just think.