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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Investment Watch

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

Friday, September 6, 2013

By Michael Mccune: The Rant (US Government auditor for 16 years - No title todayfor the Rant - (( to Have Michael send you the Rant to your Email contact Him Here ((


A potential "shot across the bow" in Syria cannot mask the nation's on-going economic woes but it can distract a the nation's attention from the vital subject.


The initial August jobs report was full of bad news for the nation, once you got past the point where the hokey 'official unemployment rate' dropped to 7.3%. The most depressing fact was the revised July report dropped from 162,000 jobs added to just 104,000.


(Please, somebody explain why the government rushes to put out phony numbers, always missing to the high side and then is able to bury the correct number in the following month's report. Also, how can anybody with a modicum of righteousness possibly be allowed to keep their taxpayer-funded position when they miss the real count by 55.8%. That's like giving a schoolboy a passing mark when he scores 44.2% on his math test!)


The revised July report was the worst in more than a year. June's report, originally estimated at a gain of 204,000 in July had been downgraded to 188,000 in August and was further eroded to 172,000. (Ok, that time the miss was only 18%. Fair but barely passing.) But June, July and August have seen the unemployment rate drop sharply, a drop that cannot be supported by the ever-weakening jobs reports.


The number of people officially dropping out of the work force count is where the unemployment reports continue to really show big numbers. In addition to the 10,000 people per day reaching retirement age, the number of younger, should-be workers, has eroded like a New Jersey beach under the onslaught of Superstorm Sandy. The average number of "lost work force participants" over the past three months is over 225,000.


Worse, for waning support for an economic recovery, the number of part-time jobs continues to outpace full-time work openings and most of the filled jobs are in the lower-paying service sector. Those in low-paying or temp jobs accounted for 84,000 of the reported 169,000 August jobs gained. Schools, no surprise with the start of the school year, were the biggest 'private' employer. (Another sore point with the Rant, how can education be counted as "private" industry when it is a mostly tax-supported institute. A better way to report this sector would be to break down private institutes from public supported institutes.) (1)


But there is another battle brewing among the economists on the recovery. Paul Krugman led a charge berating the Obama Administration for not "spending enough" to push the U.S. over the  top in the economic recovery.(2) But there is another element that see the constant deficit spending problem as the one factor that could positively derail any recovery for the foreseeable future of our children and grandchildren.


The National Association for Business Economics (NABE) completed a survey in the last week of August in which 3 in 8 felt the No. 1 problem facing the U.S. would come from Federal deficits in the next 10 years. Three in 7 respondents saw looming gaps in the 2020s through the 2030s as an economic killer. What was really ominous for the economic future was there was no consensus on how to deal with the on-going deficit problem.(3)


But what the polled NABE members agreed upon was the fact that spending for the ill-named "Affordable Care Act" will increase Federal spending on healthcare for America and "add significantly" to the annual deficit gap at the Federal level.


On one point, Krugman was adamant that more federal spending could have a significant impact--workforce participation. In 2008, during Obama's first Presidential run, the participation rate was 63%. It is now down to 59%. That 4% drop means, at current U.S. population levels, more than 13 million Americans have dropped out of the workforce than have joined it in five years. If those people were still being counted in the work force, the reported unemployment rate would be almost 12%.


At the same time, taking into account the dwindling number of full-time jobs--now less than 99 million, Under-employed or Temporary Employment ranks would push the unemployment rate over the 27% level without any juggling of numbers.


The only thing Krugman does not explain, anywhere in his rambling writings for the New York Times is where the extra tax dollars for such a spending proposal would come from? When interest rates rise, as they will have to; when true inflation is taken into account, as taxpayers must cope with daily; then where is the government going to be able to extract more from the taxpayer without having a populist revolt?


We've already witnessed the fact printing money is not the answer, all it does it build debt without any foundation for support when the fiat collapses, as it always has. No country in history has adopted a fiat, removed the standard against which it was judged and then recovered economically without outside debt forgiveness.


When practitioners of the 'dismal science' project ever-larger storm clouds on the horizon through their often rose-colored glasses, you better start building a storm shelter. The one that's coming promises to make Sandy seem like a mere teapot tempest.


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


(1)-BLS Unemployment Report, 9-5-13

(2)-Daily Ticker, Krugman Overboard!, 9-6-13

3-Associated Press, Future Deficits Seen As Top US Fiscal Problem, 8-26-13


Rant Readers--Be advised the Rant will be moving in the near future to a new format. Because of fiscal constraints I have opened negotiations to supply the Rant for a nominal annual fee through a deal with VMI. The fee will be $20 per year which works out to under 20 cents per issue. This change will mean those individuals who are on a tertiary level (non-direct) will also have to pay to continue access to the Rant on a website. Many readers will be disappointed but this drastic change is necessary. I have assurances from VMI there will be no editorial control on the content or tone of the Rant. The change will probably become official within month of October. To those who feel this cost is extravagant, you have my sincere apologies. Unfortunately, economic reality is biting my ability to devote the time necessary for thorough research for a quality product. I have appreciated your support in the past. I hope to have your support in the future. Thank you--Mike  

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