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alstry (35.49)

The Death of the Life of America???

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October 04, 2009 – Comments (9)

Time Magazine has a great article documenting the demise of Detroit titled: 

 Detroit: The Death — and Possible Life — of a Great City

http://www.time.com/time/nation/article/0,8599,1925796,00.html

Detroit was a one horse, or shall we say one industry town,  whose industry has faded....and so has the city and much around it.  There are many manufacturing towns across America that have suffered similar fates.

In recent years, America has morphed economically into something essentially not too much different than Detroit....a nation primarily dependent focused on one industry, on leveraged consumerism, to drive its economy.

Leveraged consumerism drove revenues to government and health care which in turn drove more revenues into additional consumerism.  Just like how Detroit boomed in the fifties, America boomed from everyone borrowing and consuming products and services across the nation.

Much of our success post 9/11 was driven by borrowing to consume...families borrowing, businesses borrowing, cities borrowing, states borrowing and the federal government borrowing.

Just like Detroit really didn't have much absent massive numbers buying Detroit vehicles, America doesn't have much without massive numbers borrowing and consuming....not much at all.  Further, Detroit would be in much worse shape if its citizens did not receive MASSIVE aid from the government....a government that no longer generates the revenues to even supply that aid any more.

Do you think the people of Detroit could have ever imagined what was going to happen to their city a few decades ago????  The average selling price of a home under $10,000?  It is why many of you are having such a difficult time accepting the present.

Now that the banking system has cut off America from credit, our nation is dying.  Go drive around your area, look how many businesses are shutting down, vacancies are popping up,  At this point, we still have thousands of auto dealers to shut down, tens of thousands of retailers, and many other other enterprises including insurance companies, banks, hospitals, and government agencies.

Prior to current times, America was NEVER a nation so dependent on consumerism and government spending to survive.  In prior recessions, we were much more production and export orientated...we were a creditor nation not too long ago.  All we had to do was drive more production and we were able to exit downturns relatively quickly.

This time is different..VERY different.  The driver of the economy, the consumer and government, is tapped out....so driving more borrowing will only make a bad situation worse.

With SBA lending down 50%, Home Equity borrowing down even more, and credit cards lines of credit evaporating......fewer and fewer are spending.  In order for America to function under the current system, America NEEDS massive numbers consuming massively.

Cash Flow in America is slowing dramtically to practically every industry.  Banks are resorting to gambling to generate funds by playing derivitives earning over $5 Billion in Q2.  Many are drawing down their savings and tapping out the limits on lines of credit.

The banks have basically become a black hole of money....where dollars going in to pay down debt are not going back out to generate cash flow in the economy.  The problem is with only a few trillion in savings and tens of trillions of debt...without money recycling, it should not be too much longer before much of the savings will be driven to pay down debt and most of savings in America will evaporate.

Under the current Zombulation policy, what happened to Detroit is certain to happen to America.  The process is well under way with 20% unemployment, $2 Trillion Dollar deficits, and bankruptcies growing rapidly.

We must restucture debt and lower interest rates the CONSUMER pays to sustainable levels for the new economy...otherwise, servicing debt will consume over $2 Trillion dollars per year in cash flow that will never benefit society because any profit made from such payments will be offset by losses in defaults.

We must restructure debt and restructure it now...otherwise our schools, hospitals, businesses, and governments will go broke.  The process and effects from Zombulation are now very visible....read that Time article on Detroit...it will give you great insight into where things are going if America doesn't restructure.

9 Comments – Post Your Own

#1) On October 04, 2009 at 9:13 AM, alstry (35.50) wrote:

In case a few of you really want to Feel what is going on across America....

Unemployment for Americans age 16-24 is now OVER 50%

Unemployment for Architects is OVER 50%

Unemployment for Construction Workers is OVER 50%

For many airlines, factoring both employment and pay, income is down OVER 50%...same with Real Estate Agents and Mortgage Brokers

Occupancy for Hotels is UNDER 60%

Corporate Income Tax receipts are DOWN OVER 50%

AND WE ARE JUST AT THE BEGINNING...as government and health care has only just started cutting!!!!!!

Whether you like it or not, no matter what our government officials are telling us, our nation is shutting down....and at a rate and extent NEVER seen in American history before.

NEVER has new home construction dropped 80%, Steel Imports dropped 75%, Auto Sales dropped 50%, Industrial Equipment Sales dropped 50%...ALL in just a few years and the outlook going forward is deteriorating as unemployment and loan defaults are skyrocketing.

The only thing holding us together right now is government counterfeiting $2 Trillion dollars per year....something UNPRECEDENTED in our nation's history.  That $2 Trillion is keeping 100,000,000 Americans off the streets by paying welfare, unemployment, food stamps, and other entitlement payments.

It is clear that the world is beginning to get agitated...the World Bank's President, our own appointee, said America's days are numbered.  The G-20 is gaining strength and relevance... as America's economy evaporates due to current Zombulation policies.

You think our government is preparing for what they KNOW is coming???

Sending crowd control devices to police departments across the nation?

if you think citizens are upset about health care "reform"....just wait to see how mad they get when we find out government can't afford to make any more heatlh care payments and many are broke or near broke approaching retirement due to the financial fraud currently pervasive on Wall Street and going unchecked by many in government.

None of this is hard to see...just hard to accept even though it is occuring right in front of our faces.

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#2) On October 04, 2009 at 9:26 AM, alstry (35.50) wrote:

When We Can't Print................!!!!!!

A key panel of the International Monetary Fund said Sunday that it supports giving more voting power to emerging market and developing countries, warning that the legitimacy of the institution was at stake.

Earlier Sunday, Geithner said "a more representative, responsive and accountable governance structure is essential to strengthening the IMF's legitimacy."

He noted that G-20 countries had committed to shift some control in the IMF to countries with relatively little input. The Group of 20 includes developing economic powerhouses such as China, India and Brazil.

http://finance.yahoo.com/news/IMF-pledges-voting-apf-1377014253.html?x=0&sec=topStories&pos=main&asset=&ccode=

Exactly what is the American Economy if consumers can't borrow and government can't spend?????

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#3) On October 04, 2009 at 9:32 AM, alstry (35.50) wrote:

We Better Restructure Soon...Or There will be NOTHING left to restructure......

Article: LPN Nurse Layoffs a National Trend?

Iowa State University - 73 Employees Face Layoffs or Hours Reduced

City of Livonia - Proposed 14

Wood County - 3 Building Inspectors on Layoff List

City of Chippewa - 30 

University of Texas - Layoffs coming?

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#4) On October 04, 2009 at 9:47 AM, alstry (35.50) wrote:

NOW YOU FEEL!!!!!!!!!!!!!!!!!!!!!!!!

Will California become America's first failed state?

 

Los Angeles, 2009: California may be the eighth largest economy in the world, but its state staff are being paid in IOUs, unemployment is at its highest in 70 years, and teachers are on hunger strike. So what has gone so catastrophically wrong?

California has a special place in the American psyche. It is the Golden State: a playground of the rich and famous with perfect weather. It symbolises a lifestyle of sunshine, swimming pools and the Hollywood dream factory.

But the state that was once held up as the epitome of the boundless opportunities of America has collapsed. From its politics to its economy to its environment and way of life, California is like a patient on life support. At the start of summer the state government was so deeply in debt that it began to issue IOUs instead of wages. Its unemployment rate has soared to more than 12%, the highest figure in 70 years. Desperate to pay off a crippling budget deficit, California is slashing spending in education and healthcare, laying off vast numbers of workers and forcing others to take unpaid leave. In a state made up of sprawling suburbs the collapse of the housing bubble has impoverished millions and kicked tens of thousands of families out of their homes. Its political system is locked in paralysis and the two-term rule of former movie star Arnold Schwarzenegger is seen as a disaster – his approval ratings having sunk to levels that would make George W Bush blush. The crisis is so deep that Professor Kenneth Starr, who has written an acclaimed history of the state, recently declared: "California is on the verge of becoming the first failed state in America."

http://www.guardian.co.uk/world/2009/oct/04/california-failing-state-debt

If we don't restructure...what is happening to California and Detroit will happen to ALL of America.

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#5) On October 04, 2009 at 10:10 AM, alstry (35.50) wrote:

THE CUTS ARE OCCURING EVERYWHERE...as Benny B tell and Timmy G you the recession is over...can you imagine how HARD they are laughing as their banking buddies are getting billions in bonuses and cutting the nation off of credit??????

Oklahoma’s budget cuts hurt programs that help poor

Holland budget 2010 shortfall could mean shake-up for safety services

Mayor's budget would cut about 200 city jobs

Saratoga County capital budget set to shed $2.4 million

Cut to state grant would hurt Ann Arbor Public Schools

Cuts in D.C. Homeless Services Budget

Council cuts project funding, COLA from budget

Janesville's operating budget falls

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#6) On October 04, 2009 at 11:04 AM, alstry (35.50) wrote:

CALIFORNIA...DETROIT....ARIZONA.....

State budget deficit jumps to $1.5 billion

The state budget deficit has jumped to $1.5 billion as budget officials revised their estimates based on continued gloomy tax collections.

At the Capitol, lawmakers and the governor are engaging in what's become a rite of fall, playing verbal footsie about whether they'll move sooner or later on closing the spending gap. A special session in late fall is possible.

WHEN YOU CUT OFF CREDIT TO A CREDIT DEPENDENT CONSUMER ECONOMY...IT WILL NOT TAKE TOO MUCH TIME BEFORE THE ECONOMY EVAPORATES.....

 

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#7) On October 04, 2009 at 11:42 AM, leohaas (32.97) wrote:

"Unemployment for Americans age 16-24 is now OVER 50%"

Americans age 16-24 should be in school!

And you forgot to mention that unemployment for makers of horse buggies and whips is at 100%!

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#8) On October 04, 2009 at 12:05 PM, jason2713 (< 20) wrote:

I did some research on China and all these emerging countries, many of which use fossil fuels in their factories to make their products, which is much much cheaper that what we do.  They don't have a cap and tax policy so their goods are made much cheaper, and their labor rates are very low compared to ours.

They continue to make more and more factories reliant on coal.  They don't have the regulations we have, which gives us a competitive disadvantage.

Having said that, as they become more reliant on coal, as we are with oil, and they grow and grow...the more coal they will need.  Guess who has the largest natural stock of coal on the planet?  USA.

While there may be a shift in wealth in the short term, the long term looks pretty promising because we are moving towards renewable energies, while emerging industrialized countries use coal.   It looks to me in 10 years, there will be another shift in wealth, because we hold the largest natural reserves of coal in the world.

I certainly see the shift short term, long term, I think we will be just fine.  The gov't is hoping that the 2 trillion buys the country time to iron out their finances and deleverage its citizens.  It may take 3 years and a lot more debt, and we do need to restructure, but I see a pretty bright future for the country after reading these things. 

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#9) On October 04, 2009 at 2:04 PM, mawnck (< 20) wrote:

--And you forgot to mention that unemployment for makers of horse buggies and whips is at 100%!--

Not true!

http://www.buggy.com/

http://www.worldchampionhorseequipment.com/horsewhips.aspx

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