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They Are Killing Small Business: The Number Of Self-Employed Americans Is Lower Than It Was In 1990 May 23, 2017

After eight long, bitter years under Obama, will things go better for entrepreneurs and small businesses now that Donald Trump is in the White House?  Once upon a time, America was the best place in the world for those that wanted to work for themselves.  Our free market capitalist system created an environment in which entrepreneurs and small businesses greatly thrived, but today they are being absolutely eviscerated by the control freak bureaucrats that dominate our political system.  Year after year, leftist politicians just keep piling on more rules, more regulations, more red tape and more taxes.  As a result, the number of self-employed Americans is now lower than it was in 1990

In April 1990, 8.7 million Americans were self-employed, but today only 8.4 million Americans are self-employed.

Of course our population has grown much, much larger since that time.  In 1990, there were 249 million people living in the United States, but today there are 321 million people living in this country.

What this means is that the percentage of the population that is self-employed is way down.

In fact, one study found that the percentage of Americans that are self-employed fell by more than 20 percent between 1991 and 2010.

And if you go back even farther, the numbers are even more depressing.  It may be hard to believe, but the percentage of “new entrepreneurs and business owners” declined by a staggering 53 percent between 1977 and 2010.

Sometimes I like to watch a television show called Shark Tank, and on that show they make it seem like entrepreneurship in America is thriving.

But the exact opposite is actually the case.  In a previous article, I discussed how the number of new businesses being created in the United States has been steadily falling over the years.  According to economist Tim Kane, the number of startup jobs per one thousand Americans has been declining for several consecutive presidential administrations

Bush Sr.: 11.3

Clinton: 11.2

Bush Jr.: 10.8

Obama: 7.8

So why is this happening?

As I mentioned at the top of this article, self-employed Americans are being absolutely strangled by oppressive rules, regulations and taxes.

To illustrate this point, I would like to share with you some quotes from an open letter that was authored by a small business owner named Don Chernoff…

#1 I work for myself and have to pay my own medical expenses. Before the “affordable care act” I was paying about $200 per month for a high deductible policy. It was far from perfect but it got so much worse under the “Affordable” care act.

I now pay over $400 a month, my deductible went from $5,000 to over $6,000 and my out of pocket costs for care have skyrocketed.

#2 I have to spend dozens of hours and thousands of dollars for a tax accountant each spring to prepare my taxes because I cannot possibly understand how to do it myself, and I have a master’s degree in engineering.

#3 Many years ago when I quit a perfectly good job to start my own small business, I was shocked to learn that I had to pay both my share and what had been my employer’s share of Social Security.

#4 Between state, federal and local taxes you’ve probably paid 50% or more of your income in taxes, but that’s not enough for politicians.

If you’ve been lucky enough to have created a business you can sell, now you’ll get to enjoy paying another tax on the capital gain from the sale.

This is another reason why we need a conservative revolution in Washington.  We should demand that our members of Congress lower tax rates dramatically, completely eliminate the self-employment tax, greatly simplify the tax code and get rid of as many regulations on small business owners as possible.

In fact, if it was up to me I would abolish a number of federal agencies completely.

What we are doing right now is not working.  Small businesses have traditionally been one of the main engines of economic growth in this country, but thanks to the left they are unable to play that role at the moment.

It isn’t an accident that over the last ten years the U.S. economy has grown at exactly the same rate as it did during the 1930s.

If we want our economy to be great again, we need to go back and start doing the things that made it great in the first place.  If we continue to suffocate our economy, we will continue to get the same results.

And with each passing day, we get more signs that the economy is heading into another major downturn.  For instance, we just learned that Sears is closing 30 more stores on top of the 150 that had already been announced…

Sears Holdings, which wasn’t shy when it announced at the start of the year that it is closing 150 underperforming stores, has quietly added at least 30 more to the list.

Another 12 Sears stores and 18 Kmarts are among the locations that are closing, from Carson, Calif., to Hialeah, Fla., with most scheduled to shut their doors in July, based on calls to the stores, malls and confirmation in local media.

At the start of the year, the retailer pinpointed the 150 stores it said it would close. But it declined this week to provide a list of additional locations that are slated to shut since then, saying that it update store counts each quarter.

In addition, we just learned that new home sales in April were 11.4 percent lower than they were in March

If you’re surprised by the collapse in new home sales in April, then you’re not paying attention.

The 11.4% MoM plunge in new home sales in April was 5 standard deviations below expectations and the biggest since March 2015.

Yes, the stock market is holding up for the moment, but for most Americans the “real economy” just continues to deteriorate.  Just because we are at the end of a giant financial bubble does not mean that everything is going to be okay.

The numbers that I brought up in this article are just another example of our long-term economic decline.  In a healthy economy, entrepreneurs and small businesses would be thriving.  But instead, they are being systematically strangled out of existence by a political system that is wildly out of control.

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Over The Last 10 Years The U.S. Economy Has Grown At EXACTLY The Same Rate As It Did During The 1930s May 22, 2017

Even though I write about our ongoing long-term economic collapse every day, I didn’t realize that things were this bad.  In this article, I am going to show you that the average rate of growth for the U.S. economy over the past 10 years is exactly equal to the average rate that the U.S. economy grew during the 1930s.  Perhaps this fact shouldn’t be that surprising, because we already knew that Barack Obama was the only president in the entire history of the United States not to have a single year when the economy grew by at least 3 percent.  Of course the mainstream media continues to push the perception that the U.S. economy is in “recovery mode”, but the truth is that this current era has far more in common with the Great Depression than it does with times of great economic prosperity.

Earlier today I came across an article about President Trump’s new budget from Fox News, and in this article the author makes a startling claim…

The hard fact is that the past decade’s $10 trillion in deficit spending has produced the worst economic growth as measured by Gross Domestic Product in our nation’s history.  You read that right, in the past decade our nation’s economy grew slower than even during the Great Depression. This stagnant, new normal, low-growth economy is leaving millions of working age people behind who have given up even trying to participate, and has led to a malaise where many doubt that the American dream is attainable.

When I first read that, I thought that this claim could not possibly be true.  But I was curious, and so I looked up the numbers for myself.

What I found was absolutely astounding.

The following are U.S. GDP growth rates for every year during the 1930s

1930: -8.5%
1931: -6.4%
1932: -12.9%
1933: -1.3%
1934: 10.8%
1935: 8.9%
1936: 12.9%
1937: 5.1%
1938: -3.3%
1939: 8.0%

When you average all of those years together, you get an average rate of economic growth of 1.33 percent.

That is really bad, but it is the kind of number that one would expect from “the Great Depression”.

So then I looked up the numbers for the last ten years

2007: 1.8%
2008: -0.3%
2009: -2.8%
2010: 2.5%
2011: 1.6%
2012: 2.2%
2013: 1.7%
2014: 2.4%
2015: 2.6%
2016: 1.6%

When you average these years together, you get an average rate of economic growth of 1.33 percent.

I thought that was a really strange coincidence, and so I pulled up my calculator and ran all of the numbers again and I got the exact same results.

The 1930s certainly had more big ups and downs, but the average rate of economic growth during that decade was exactly the same as we have seen over the past 10 years.

And of course the early 1940s turned out to be a boom time for the U.S. economy, while it appears that our rate of economic growth is actually slowing down.  As I noted yesterday, U.S. GDP growth during the first quarter of 2017 was just 0.7 percent.

But you don’t hear any talk like this on the mainstream news, do you?

Instead, they tell us that everything is just peachy.

I often wonder what things would be like right now if Barack Obama and his minions in Congress had not added more than 9 trillion dollars to the national debt.  By stealing all of that money from future generations of Americans and spending it now, Obama was able to artificially prop up the U.S. economy.  If we were able to go back and remove 9 trillion dollars of government spending from the economy over the past 8 years, we would be in a rip-roaring economic depression right now.  For an extended analysis of this, please see my previous article entitled “The Shocking Truth About How Barack Obama Was Able To Prop Up The U.S. Economy”

But even though we have been adding more than a trillion dollars to the national debt each year, and even though the Federal Reserve pushed interest rates all the way to the floor during the Obama era, the U.S. economy has not grown by three percent or more on an annual basis since 2005.

When you take an honest look at the numbers, there is no way that anyone can possibly claim that the U.S. economy is doing well.  The best that you can say is that we have been staving off a complete economic meltdown and another Great Depression, but of course the measures that our leaders have been taking to do this have just been making our long-term problems even worse.

I feel bad for President Trump, because he has inherited the biggest economic mess in U.S. history.  When we finally reach the point when it is impossible to artificially prop up the U.S. economy any longer, he is going to get most of the blame, but he won’t deserve it.

It is not going to be possible for Trump or anyone else to fix our system, because it was fundamentally flawed from the very beginning.  The Federal Reserve was designed to create an endless spiral of government debt, and since the day it was created the U.S. national debt has gotten more than 5000 times larger and the value of the U.S. dollar has declined by about 98 percent.

If we truly want to fix the economy, the Federal Reserve must be abolished.  If I was President Trump, I would look to start issuing debt-free U.S. currency just like President Kennedy did in 1963 as soon as possible.

In addition, we need to push tax rates as low as possible.  Personally, I would like to see the day when the personal income tax is completely eliminated and the IRS is shut down.  The greatest period of economic growth in all of U.S. history was when there was no income tax and no Federal Reserve.  America once thrived in such an environment, and I believe that we can do it again.

Of course we need to also dramatically reduce the size and scope of the federal government.  Our founders intended to create a very limited federal government, but instead the left has just kept pushing to make it larger and larger.

Businesses all over America are being strangled to death by mountains of federal regulations, and if we could just get the government off of their backs the business community could start thriving again.  There are quite a few government agencies that could be shut down entirely, and I think that the EPA would be a good place to start.

Once upon a time the United States showed the world the power of free markets and capitalism, and if we want to make America great again, we should go back and do the things that made America great in the first place.

But would the American people be willing to go down that path?

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The Tens Of Millions Of Forgotten Americans That The U.S. Economy Has Left Behind May 21, 2017

The evidence that the middle class in America is dying continues to mount.  As you will see below, nearly half the country would be unable “to cover an unexpected $400 expense”, and about two-thirds of the population lives paycheck to paycheck at least part of the time.  Of course the economy has not been doing that well overall in recent years.  Barack Obama was the only president in all of U.S. history not to have a single year when the economy grew by at least 3 percent, and U.S. GDP growth during the first quarter of 2017 was an anemic 0.7 percent.  During the Obama era, it is true that wealthy enclaves in New York, northern California and Washington D.C. did thrive, but meanwhile most of the rest of the country has been left behind.

Today, there are approximately 205 million working age Americans, and close to half of them have no financial cushion whatsoever.  In fact, a new survey conducted by the Federal Reserve has found that 44 percent of Americans do not even have enough money “to cover an unexpected $400 expense”

Nearly eight years into an economic recovery, nearly half of Americans didn’t have enough cash available to cover a $400 emergency. Specifically, the survey found that, in line with what the Fed had disclosed in previous years, 44% of respondents said they wouldn’t be able to cover an unexpected $400 expense like a car repair or medical bill, or would have to borrow money or sell something to meet it.

Not only that, the same survey discovered that 23 percent of U.S. adults will not be able to pay their bills this month

Just as concerning were other findings from the study: just under one-fourth of adults, or 23%, are not able to pay all of their current month’s bills in full while 25% reported skipping medical treatments due to cost in the prior year. Additionally, 28% of adults who haven’t retired yet reported to being grossly unprepared, indicating they had no retirement savings or pension whatsoever.

But just because you can pay your bills does not mean that you are doing well.  Tens of millions of Americans barely scrape by from paycheck to paycheck each and every month.

In fact, a survey by CareerBuilder discovered that 75 percent of all Americans live paycheck to paycheck at least some of the time…

Three-quarters of Americans (75 percent) are living paycheck-to-paycheck to make ends meet, according to a survey from CareerBuilder. Thirty-eight percent of employees said they sometimes live paycheck-to-paycheck, 15 percent said they usually do and 23 percent said they always do. While making ends meet is a struggle for many post-recession, those with minimum wage jobs continue to be hit the hardest. Of workers who currently have a minimum wage job or have held one in the past, 66 percent said they couldn’t make ends meet and 50 percent said they had to work more than one job to make it work.

So please don’t be fooled into thinking that the U.S. economy is doing well because the stock market has been hitting new record highs.

The stock market was soaring just before the financial crisis of 2008 too, and we remember how that turned out.

The truth is that the long-term trends that have been eating away at the foundations of the U.S. economy continue to accelerate, and the real economy is in substantially worse shape this year than it was last year.

Just about everywhere you look, businesses are struggling and stores are shutting down.  Yes, there are a few wealthy enclaves where everything seems wonderful for the moment, but for most of the country it seems like the last recession never ended.

In a desperate attempt to stay afloat, a lot of families have been turning to debt to make ends meet.  U.S. household debt has just hit a brand new all-time record high of 12.7 trillion dollars, but we are starting to see an alarming rise in auto loan defaults and consumer bankruptcies.  This is precisely what we would expect to see if the U.S. economy was moving into another major recession.

In fact, we are seeing all sorts of signs that point to a major economic slowdown right now.  Just check out the following from Wolf Richter’s latest article

Over the past five decades, each time commercial and industrial loan balances at US banks shrank or stalled as companies cut back or as banks tightened their lending standards in reaction to the economy they found themselves in, a recession was either already in progress or would start soon. There has been no exception since the 1960s. Last time this happened was during the Financial Crisis.

Now it’s happening again – with a 1990/91 recession twist.

Commercial and industrial loans outstanding fell to $2.095 trillion on May 10, according to the Fed’s Board of Governors weekly report on Friday. That’s down 4.5% from the peak on November 16, 2016. It’s below the level of outstanding C&I loans on October 19. And it marks the 30th week in a row of no growth in C&I loans.

Perhaps we will be very fortunate and break this pattern that has held up all the way back to the 1960s.

But I wouldn’t count on it.  Here is what Zero Hedge has to say about this alarming contraction in commercial and industrial loans…

Here’s the bottom line: unless there is a sharp rebound in loan growth in the next 3-6 months – whether due to greater demand or easier supply – this most accurate of leading economic indicators guarantees that a recession is now inevitable.

We are way overdue for a recession, the hard economic numbers are screaming that one is coming, and the financial markets are absolutely primed for a major crash.

As Americans, we tend to have such short memories.  Every time a new financial bubble starts forming, a lot of people out there start behaving as if it can last indefinitely.

But of course no financial bubble is going to last forever.  They all burst eventually, and now the biggest one in U.S. history is about to end in spectacular fashion.

Trump will get a lot of the blame since he is the current occupant of the White House, but the truth is that the conditions for the next crisis have been building up for many years, and the horrors that the U.S. economy is heading for were entirely predictable.

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