Monday, February 22, 2010

Economic Recovery for Who?

Economists expect the "recovery" to remain "firmly on track" over the next two years, although job growth is likely to remain slow...very slow. So, with 15 million people out of work, six million of them out of work for more than half a year, and no idea when or where these "new" jobs will emerge from, where is the recovery? If recovery means regaining a former and better state or condition, then how can we be experiencing a recovery with "millions of Americans remaining out of work, out of savings and nearing the end of their unemployment benefits"?

Historically, a correlation between increased economic production and job creation could be counted on as fairly reliable. However, with technology advancing at an exponential rate, the increasing trend to outsource work to countries where costs are lower, and the never ending shareholder pressure to boost profits, employers will do their very best to avoid the long-term cost of hiring full-time employees.

Today, the US Senate voted to advance a $15-billion package , a mere drop in the bucket, aimed at spurring job creation. A few Republicans, including Scott Brown, broke ranks as legislators voted 62-30 to end debate on the measure, clearing a 60-vote requirement and setting the stage for final approval.

The centerpiece of the bill includes a payroll tax break for employers who hire new workers, unemployed for more than 60 days. It also includes measures aimed at improving access to capital for small businesses, an extension of the current federal subsidy formula for road and bridge repairs carried out by states, and a modest expansion of federally subsidized bonds to help local governments raise funds for infrastructure projects.

Again, what about the millions of unemployed who face years without jobs?

Even as the American economy shows tentative signs of a rebound, the human toll of the recession continues to mount, with millions of Americans remaining out of work, out of savings and nearing the end of their unemployment benefits.

Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed.

Call them the new poor: people long accustomed to the comforts of middle-class life who are now relying on public assistance for the first time in their lives — potentially for years to come.

Yet the social safety net is already showing severe strains. Roughly 2.7 million jobless people will lose their unemployment check before the end of April unless Congress approves the Obama administration’s proposal to extend the payments, according to the Labor Department.
Oh, wait a minute. This must be what they mean, when they tell us we're experiencing a recovery.
Feb. 18 (Bloomberg) -- "The 400 highest-earning U.S. households reported an average of $345 million in income in 2007, up 31 percent from a year earlier, IRS statistics show. The average tax rate for the households fell to the lowest in almost 20 years. The figures for 2007, the last year of an economic expansion, show that the average income reported by the top 400 earners more than doubled from $131.1 million in 2001. That year, Congress adopted tax cuts urged by then-President George W. Bush that Democrats say disproportionately benefit the wealthy."
Well, it seems the "recovered 400" earn much of their income from capital gains on their investments, many of which have sky-rocketed thanks to we, the taxpayers. Their incomes have grown five times what they were in 1992 and their tax rates (capital gains) have plunged 15 percentage points, to a mere 15%.

So, it is clear who is in "recovery", as if they had anything to recover from. And it is also very clear that the ever increasing population at the bottom of our economic system, with no political power, are experiencing something as bad, if not worse than the Great Depression, with no end in sight. Yet we allow the mainstream media to lie to us and create the impression that the country is experiencing a recovery.

Until we grab the control from the infinitesimally small group of elites, who control our political system, ensuring they, and only they benefit from government policy, nothing will change.


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