Proverbs 22:3 NLT

A prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences.

-- (((Charles Finney, said the following: “If
there is a decay of conscience, the pulpit is responsible for it))) --


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X22 Report is a daily show that will cover issues surrounding the economic collapse

Monday, August 5, 2013

By Michael Mccune: The Rant (US Government auditor for 16 years- Consumers Fear Parting With Money In Hand - (( to Have Michael send you the Rant to your Email contact Him Here (( ))

Consumers Fear Parting With Money In Hand

Just when things can't be any worse the government comes along and proves it can make things worse. The way to do this is lie about the economic numbers.


Americans are already jittery about household budgets. It is tough finding a living-wage job as so many employed people stuck in part-time positions will attest. People who do have jobs are beginning to count not only the pennies but the half pennies and percentage of pennies as well.


This real public consciousness of budgets and formerly thoughtless expenditures is making such a mockery of the way the government provides economic data that, once again it is switching in mid-stream.


In order to support the contention the economy is recovering, the Commerce Department is now counting as economic growth what can't be measured, seen, felt, tasted or utilized--the long anticipated 'knowledge factor'. If this were truly the case then the economic growth would have imploded since so many of the young people lack the skills which make them attractive to employers. They've become so used to 'remedial' classes they seem to assume employers will be willing to provide for the holes in their education.


But our government showed an economic growth of $560 billion in the second quarter of this year, $526 billion which was in this 'knowledge' factor area. That means 94% of the 1.7% growth measured in the second quarter of the year is phony and due entirely to a 'more improved' yardstick.


What makes up part of the knowledge factor is unearned, projected interest earnings, particularly in pension plans. The government included the Detroit, city-backed pension plans in this category. The destitute metropolis just filed for bankruptcy. It also included Social Security interest from the Permanent Trust Fund. So two of the categories they added into the calculation, no longer exist except on paper and in the government's promises.


There is a looming problem ahead for consumer debt. Consumers, unlike the government, can't print money or monetize the debt they've amassed. Yet month after month, particularly in the second quarter every ounce of increase in consumer spending was on debt.


Since the 2008 election, employment income has declined by 3% per data compiled by the Bureau of Labor Statistics. Yet consumer spending has risen fairly steadily since late 2009. The only way this is possible is through debt.


The Administration's hopes for a faster economic growth in the second half of the year is reliant upon stronger consumer spending. But for that to happen income growth needs to accelerate, not continue to decline.


If the employment data is accurate this cannot happen. Most of the 162,000 jobs filled in July (down from an expected 200,000) were in the part-time category for the seventh straight month, meaning since the end of 2012, employers have been afraid of the unknown effects Obamacare is going to have on full-time employers. Of the 700,000 reported as 'created' only 200,000 have been full-time slots. Most of the remaining 500,000 part-time jobs were from employers cutting full-time staff and replacing them with part-time workers to avoid Obamacare penalties.


Since nobody has come out with a finished version of the Act, the uncertainty is translating into fear among employers and that fear is being transmitted to the employees. That's no way for the economy to gain traction


It does not matter what games the government plays with the data or how blatantly it disregards fundamental economic principles to force the data into giving it a positive report; Main Street is still feeling the pinch of the non-recovery recovery. Until that pinch is gone, until the government can provide legitimate, measurable, real numbers, the fear factor remains entrenched.


Fear trumps knowledge every time. That is a animal reaction the government cannot fight by jiggling data.


"I have sworn on the altar of God eternal hostility to every form of tyranny over the mind of man."--Thomas Jefferson 


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