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Understanding the Unemployment Deception

Mac Slavo
February 4th, 2011
SHTFplan.com
Comments (65)

Yahoo! reports, and the mainstream media parrots, that the “unemployment rate is sinking at the fastest pace in half a century because a surprisingly large number of people say they’re finding work.”

The unemployment rate dropped sharply last month to 9 percent [down from 9.4%], based on a government survey that found that more than a half-million people found work.

The unemployment rate has fallen by eight-tenths of a percentage point in the past two months. That’s the steepest two-month drop in nearly 53 years.

Buried within the report, outside of the view of home page lead headlines, is this important item of interest:

But part of that drop has occurred as many of those out of work gave up on their job searches. When unemployed people stop looking for jobs, the government no longer counts them as unemployed.

The number of people who have given up looking rose to 2.8 million last month, from 2.6 million in December.

We can expect to see leg tingling excitement amongst mainstream pundits struggling to hold on to the Bernanke-Geithner-Obama narrative of recovery, as they grasp for any semblance of statistical evidence to show they’ve been right all along and that you should be heading to Disney World with the kids the minute weather conditions improve. Never ones to delve into the possibility that the algorithmic analysis and surveys used by the Bureau of Labor and Statistics and our government might not tell the whole story, 9.0% will be blindly touted by the best and brightest as evidence of success for the estimated $23 Trillion in stimulus, bailouts and monetary expansion which have prevented another catastrophic financial and economic collapse.

The reality, however, is starkly different from the perceptions being created by the power elite who are attempting to prevent Egyptian style political uprising and civil unrest in the U.S.

While the majority of Americans will take this latest report as a sign that things really are getting better, even if the data are skewed and manipulated, we subscribe to the musings of Horace (65 BC – 8 BC), who said naturam expellas furca, tamen usque recurret – You can drive Nature out with a pitchfork, but she’ll always come back.

Karl Denninger points out just some of the machinations in the latest government (un)employment situation:

There’s no love in here.  Worse, the benchmark revisions are out, and they show about 300,000 supposedly-reported jobs that didn’t really happen.  No, really?  How come that number seems to always be in this direction?  That is, why is it that the BLS always seems to over-report reality in the establishment survey?

That inconvenient truth, incidentally, is why I always use the household numbers.  They’re at least a real survey without BS “adjustments” applied and while they’re subject to sampling error at least they’re not intentionally distorted.

This officially sucks.

On a month-by-month basis the number of actual employed people dropped by more than 1.5 million!  That’s a huge decrease and what’s worse, the trend is awful, being unbroken now since the first of last year.

It looks like someone in the administration needed to show some positive numbers, truth be damned. Someone, for some reason, decided to throw in a few hundred thousand extra jobs. We’ve seen this before, and eventually those numbers will come out in the open. One example of this was an official adjustment of the 2009 unemployment numbers, which indicated that the BLS overstated the amount of people employed that year by some 675,000.

The manipulations are nothing new. The powers that be can continue to play with the numbers, and assuredly, they will. But in the end, nature will take hold and reality will hit us like a sledgehammer.

Mainstream information outlets prefer to avoid looking at the real story – perhaps it’s too complex for the average prole – but for inquiring minds willing to do some basic arithmetic, the reality is readily available. The Yahoo report above says that we are having a record breaking employment growth cycle, as job losses decrease at a rapid pace. The record they didn’t talk about is the one that really matters:

Probably the last chart to bury any doubt about just how truly horrible today’s employment data was, comes from a little observed data metric: that showing the number of people who are not in the labor force, but who want a job now. The number just hit 6,643K, a jump of 431K from December, and the highest number in history. These are people that would send the unemployment rate to about 12.8% if they were in the labor force (and, as indicated, looking for a job). Nothing else needs to be said.

Source: Zero Hedge

Now you see how it’s done.

The official rate should be at least 12.8%. The 9.0% unemployment rate does not include those people who are now considered to be “out of the labor force” because they have stopped looking for work.

Maybe, just maybe, they’ve stopped looking for work because there are no meaningful jobs left in America. Maybe it makes economic sense for them to stay home and collect the unemployment insurance benefits to which they have contributed their entire working lives. For someone that had a job paying $100,000 year before the economic crisis, doesn’t it make sense, financially, to collect as many benefits as possible rather than losing those benefits by taking a minimum wage job working a cash register at a Chinese product distribution warehouse? Many of those on unemployment are making the right financial decision by collecting more than a paycheck would provide, not only via a weekly insurance distribution, but by accessing other benefits that include state funded health care, food benefits and support with utilities.

Not many media pundits will talk about that as the reason why people have stopped looking for work. Nor will they discuss the many millions of people who, once their benefits expire after 99 weeks, will no longer be counted as looking for work. They just kind of disappear into a singularity – one in which they are not counted as employed or unemployed. They, for all intents and purposes, don’t exist anymore.

Using this type of mathematical approach, the government could potentially see continued drops in unemployment indefinitely. Potentially, we could have more employment than we have people if they work the math right! As a couple hundred thousand jobs are added each month, a half a million people drop out of being counted as their benefits expire or for other reasons, the official rate is reported as going down.

In reality, however, there are more and more people entering the workforce each month, and the numbers of jobs being created simply isn’t enough to offset the losses, which means there are actually many more people out of work than there are with work.

If we used this simple calculation (with work vs. without work) for determining the unemployment rate, the number would be closer to 45% of people without full time employment in America:

But the by far largest category “missing” from both the Employed and Unemployed statistics is the “Not In Labor Force”: 85.2 Million people.

The BLS definition states: “Not in the labor force (NILF). A person who did not work last week, was not temporarily absent from a job, did not actively look for work in the previous 4 weeks, or looked but was unavailable for work during the reference week; in other words, a person who was neither employed nor unemployed.” (Clearly, this does include lot of unemployed people).

To summarize: 108.616 million people in America are either unemployed, underemployed or “Not in the labor force”. This represents 45.5% of working age Americans.

Believe what you will about the official unemployment figures in America. But understand that no amount of manipulation will change what’s really happening. Just because someone in the news media suggests that only 9% of people are unemployed doesn’t change the fact that 43.6 million (and counting) broke and hungry people depend on food stamps to feed their families, home prices continue to decline, foreclosures are at record levels and climbing, and the cost of essential goods is inflating in response to monetary inflation.

Federal Reserve Chairman Ben Bernanke, in prepared comments to the National Press Club, said on February 3, 2011:

“Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.”

Based on how the government is officially calculating our unemployment rate, recovery should be in full swing by summertime.

For those who look at the underlying fundamentals of our unemployment picture, however, it’s clear that the rate of unemployment, as estimated by Shadow Stats, is roughly 22% with no end in sight to the job losses.

If sustained growth in employment will lead to economic recovery, then astute readers can probably guess what the alternate scenario may bring.

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He wants zero rates and QE4!

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We are running out of time

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The Finger is on the Nuke Button | Future Money Trends

Author: Mac Slavo
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Date: February 4th, 2011
Website: www.SHTFplan.com

Copyright Information: Copyright SHTFplan and Mac Slavo. This content may be freely reproduced in full or in part in digital form with full attribution to the author and a link to www.shtfplan.com. Please contact us for permission to reproduce this content in other media formats.

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65 Comments...

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  1. GMAFB says:

    Lies, damned lies, and statistics” – Mark Twain

    You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.Abraham LincolnOr you can just put it on CNBC and every sheeple in the country believes it.  Just more noise.  Keep on preppin, the light you see at the end of the tunnel is the train.

    GMAFB – yea, no apologies

  2. Richard says:

    I think must people are starting to see the smoke. Things are not in good shape and by arguing over petty stuff isn’t going to do any good. Neither is giving false numbers / hope.
    http://www.dailyjobcuts.com       in Black and white for ya

  3. The truth is, we will never know the truth.

    One would have to wonder if the truth even exists for people, much less corporations.  As long as the people allow the corps to survive, they will be lied to, cheated, and have every last penny stolen from them without any explanation having to be given.

    The truth can exist.  Corporations can exist.  But the truth cannot coexist with corporations who profit from lies.

  4. lostinmissouri says:

    Sorry if this is off topic….but ABC  just reported that  Mubarak’s net worth to be between 50 to 70 BILLION DOLLARS.


    The USA has given Egypt  approx.  2 billion dollars a year since Jimma Carter…….( aid to help the “children”)

    Considering the amount of unemployment and foreclosures here in America………this news  CHAPPS  MY ASS, ROYALLY!

    Another dictator,  our stupid government, has made rich!
    No wonder the whole system is going down.

  5. manos says:

    Since January 2010, 10 colleagues-friends were fired from the company. Today my boss told me that since sales are decreasing with a fast pace, he will announce 8 more lay-offs on Monday.
    In total 18 out of 31, in just one year.
    What a terrible feeling for both; them who are leaving to start a new life, and us who stay and live a daily “big brother” scenario.
    The economists and financial advisors have also thought the motivation factor: the wording is not firing or layoffs anymore.
    It’s rather downsizing, reduce expenses, keep the margin, and other beautiful but meaningless words.
    The point is always the same: how to gather your pieces, your self-estime, confidence, and continue with your life.
    For them we are just numbers, statistics in some blue-red chart, been shown in the evening news. As soon as the chart appears on the screen, the journalist takes his sad face tells his words, and then smiles again to announce who is the next top model.
    I know one thing: maybe the governments and countries will avoid the bankruptsy.
    WE ALL as individuals and souls have already been bankrupt ethically, socialy, spiritually, and of course finacially.
    What the hell am i going to tell to my daughter in 20 years?
    that her dad was a chicken shit who just watched the idiots robbing the country and the globe?.
    I’m sick, dissapointed, angry, stressed, tired, scared, depressed.
    One thing i know for sure: I’M NOT GUILTY YOU B………S

    Be safe guys and have courage.

    Manos

  6. prepper says:

    Manos..thanks for your inputs.  It is good to get your perspective from half way around the world.  I think something is brewing and no one can stop it.  The riots are going from one country to the next and I hope that people are prepared for it here.

  7. Ben Dover says:

    The U.S.’s unemployment stats are more manipulated, kneaded & massaged than the thighs on a world-class ballerina. It’s ALWAYS the same crap: they come out with some completely fantastical rosy numbers, then revise them down one or two weeks later (usually late Friday) when no one is paying attention anymore. The same with CPI and GDP stats. What a crock!

    I’m already hearing that many Americans are doing the same thing Russians used to do back in the Soviet era while reading Pravda: they read the headlines, then automatically assume that the exact OPPOSITE of what’s being stated is the actual truth. 

    Ultimately, the U.S. governments willingness to feed its population nothing but LIES will only serve to fool the gullible into erroneous courses of action that will do nothing but make a bad situation even WORSE. The U.S. is acting like that car owner whose gauges all indicate the engine is overheating, out of gas and running on a faulty battery, to which the car owner’s solution is to SMASH all the indicator lights & gauges.

    Good luck with that.

  8. Comments…..
    As soon as the chart appears on the screen, the journalist takes his sad face tells his words, and then smiles again to announce who is the next top model.
    ~~~~~~~~~~~~~~~~~~~~~
    And, the only way to bring it home to him/her is to put him/her out of business by disconnecting…..permanently…use those funds to prep.

    When the disconnect to the internet is accomplished, I do believe the tv will go too…except for govt controlled news……

    oh, wait—we have that already!!

  9. Anonymous says:

    I don’t think Mubarak would keep that 2 billion in paper fiat.  They will say he is in one country & he will be in another.  Maybe Capri or an unchartered island with just sand and imported trees.  Wait one, #1 is about to speak.  I’m holding my breath.

  10. AZ Ready says:

    Unemployment at the height of the depression was 24%. If we were to calculate unemployment today the same way they did back then, it would be about 23%! Everyone get the picture? We are up s… creek right now! 

  11. AZ Ready says:

    One note for those idiots in Washington that may read this. I am a small business owner. I did not have to lay off anyone over the past two years because they left on their own, however, I did not re-hire anyone to fill those positions. This amounted to half of my employees prior to 2009. If any other business out there is like mine, then an entirely different unemployment pictures arises!

  12. Stealth says:

    They won’t get it until the shelves are bare, the gas pumps are empty and the beers all gone.
    Now that would be a crime…I don’t think i have any alcohol stored away yet hmmm only for medicinal purposes I assure you.

  13. laura m. says:

    Stealth, I agree as the American sheeple are dumb as ever!  I’m amazed even with educated college people, and some older, are unconcerned about prep. for inflation, shtf, etc.  Everyone wants to be entertained  when they’re not  working or sleeping.  Churches and public schools main goal is to keep people brainwashed  and preoccupied with useless activities, all gov. controlled.  Many sports channels incl golf on cable keep many hypnotized.  Oath Keepers on local levels (cities, towns must take control and tell the Fed. gov to butt out.

  14. Patriot One says:

    Statistically, if I put one hand in the freezer and the other on a hot stove I won’t get burnt, Statistically. We all know we will get burnt eighter way.

  15. mushroom says:

    unemployment is truly around 25% and is increasing. the effect of insourcing and outsourcing jobs has been devastating,  i enjoy listening to and reading john williams of shadowstats.

    most of catepillar”s and general electric”s manufacturing business is now in china. there’s no hope as long as campaign contributions continue and those washington birds of prey with democrat and republican wings hover over us all.

  16. Goldenfoxx says:

    Comments….. If the government ever did tell us the truth, we still wouldn’t believe it because we’ve been conditioned to not believe anything they say.  None of us know what the real unemployment numbers are, nor do we know how many people have given up looking for a job.  We will know when the .gov can no longer give people money for not working, and we are approaching that time within the next 6 months.  The 99’ers have already fallen off the dole.  So the .gov says that only 36,000 jobs evolved, but how many dissolved?

    From Mish:

    While the “official” unemployment rate is an unacceptable 9.0%, U-6 is much higher at 16.1%. Moreover, both the official rate and U-6 would be much higher were it not for huge numbers of people dropping out of the workforce.

    Things are much worse than the reported numbers would have you believe.

    Mike “Mish” Shedlock
    ——————————–

    I have no reason to doubt what Mish is saying, others like him are saying the same thing. 

    Manos, I wish you well.  You’re several steps ahead of many in your thinking and preparing.

  17. gour says:

    Comments…..”They pretend to pay us and we pretend to work”  This is the new Amerika.  If you look at a chart over the past thirty years it will show a rising GDP and a corresponding rise in debt levels in the US and you will notice that they move in lock step.  Very interesting! What does this say?  It is all a sham.  Rising GDP simply indicated rising debt.  The more we owe the bigger the GDP.  It is like a guy who has a printing press in his basement.  He prints $1,000.00 and goes out and spends it. Lo and behold there is economic activity(GDP).  Once that is spent he needs more so he prints up $10,000.00 (QE 1).  Again economic activity of even a greater amount.  GDP is rising.  Wow we are obviously a prosperous family.  Everyone is impressed.  He has a new car, house, clothes etc.  But that has been spent.  He has to go down to the basement  again and print up $100,000.00(QE 2).  But that money is not real and it is ultimately debt.  Federal Reserve notes are debt instruments.  That printing press does not belong to our man, it belongs to   someone else (Federal Reserve).  In the end our man becomes a slave.  He thinks he owns things but really he is just borrowing them.  The whole show is just a gigantic ruse.  We have been had.  The banks own us.  They own your car, your house, your credit cards, your student loans, your government, your police, your schools, your health care.  They own it all.  Suckers!!!!!  We are to blame.  We let them do it.

  18. Anonymous says:

    Manos,  I have touched soil in your country twice but flown over it many times.  I wish you & your family well also.  You know me as I you.  Buy pasta, rice, beans & put some olives away.  Be creative in your defense of your family.  Plant a fruit/nut bearing tree on family land & involve your family.
     

  19. Anonymous says:

    Get well Charlie Sheen!  You are not unemployed.  You’re my hero!  Tuck your shirt in & you will be OK.

  20. Durango Kidd says:

    Gour: The parallel you draw between debt and GDP is understandable but not accurate. The increasing GDP reflects greater wealth to the benefit of BIG Business, BIG Banking, and the uber rich.

    It also reflects the growing disparity between the rich and the poor since that increase in wealth has not equitably dispersed since the Reagan years.

    The increased national debt reflects our  balance of trade deficits under “free trade” while tranferring the American means of production offshore and increased spending by the Treasury to finance wars of unfettered capitalism on the backs of the middle class who pays the taxes.

  21. Goldenfoxx says:

    Comments….. Gour said:
    The whole show is just a gigantic ruse.  We have been had.  The banks own us.  They own your car, your house, your credit cards, your student loans, your government, your police, your schools, your health care.  They own it all.  Suckers!!!!!  We are to blame.  We let them do it.
    ————————
    The banks may own you, but they do not own me.  That’s the whole idea about being debt free.  No house payment, no CC debt, no car payment, pay cash for everything. If you don’t have the cash, then you can’t afford it.  Blame the banks for what?  I don’t see them standing out in front of the bank barking at people to come in so they can screw you over.  No one can do anything to you without your permission.  Just when are people going to stand up and take responsibility for their own actions instead of blaming others? Too many people have the Obumma syndrome of blaming others.  WTF!  Work hard, pay your debts off, and don’t get into debt again.  I p[ay property taxes like milllions of other property owners.  I also pay sales tax, and a zillion other taxes.  The worst of them all are paying cocoapuffers to sit at home and do nothing while they get all the bennies.  That has got to stop.  Socialism works until you run out of other people’s money.

  22. Anonymous says:

    There’s something to be said for un-collateralized loans (CC’s).  Reap what you sow corps.
     

  23. VRF says:

    Mycompanies CPA said get rid of as much personal debt as you can..ASAP!..

    he aint stupid, and he’s been around for over 70 years,
    has been thru some of this counties tuff times…first thing he asked me when i went in to get my taxes done..”How much unpaid debt do you have”
    I really dont have much and he was happy to know that, but he still said, what ever you can pay off with your return…do it.

    he also told me on my mortgage was pay down the principal as much as i possibly could.

    wise words from a man thats seen, lived, and is seeing harder times coming

  24. sweatervest says:

    here’s an article from the BBC covering this very report… although they point out that the figures don’t add up.  Sometimes international news IS good for something.

    http://www.bbc.co.uk/news/business-12364507

  25. Durango Kidd says:

    VRF: Paying off your mortgage is a good idea, but paying it down may not be such a good, depending on your personal situation, the amount of your mortgage, other assets, and liquidity.

    Cash is king, so there is something to be said for those crisp new $10 bills.

  26. shoemaker says:

    I work in local government, and I know we will be laying off people this summer…Out of 270 positions, we will be cutting about 10 full time positions.  We made it through the recession this far before having to cut.  And we aren’t alone–there will be another wave of layoffs in local government, and a whole lot of indirect layoffs in the private sector from our purchasing cuts.

  27. The prez says:

    Dinner with my wife $722, a smoke on the balcony, booking our next two winter getaways, paying the bill – NOT.  ah life is good.

    XOX,

    Barry

  28. clark says:

    “How will the US’s finances be handled? There are only two ways that I can come up with:…

    The second way would be to devalue the currency to the point where obligatory dollar debts would be financed or paid off with dollars equal to pennies or nickels.” !!!

    http://www.lewrockwell.com/orig12/russell-r6.1.1.html

    “The government attempts to halt the recession process by spending more money. It gets it by printing it. That dilutes the value of the cash we are holding while waiting for the lower prices of the stocks.”

    “The dilemma for investing in stocks is that cash is king for buying stocks as they go lower. But at the same time, the Fed is making cash worth less and less. Eventually that money will be put to work, and the cash will decline in value because of inflation: Stocks will start to rise in price and so will goods and gold. Gold is already rising. As with its bailouts and deficit spending, the government’s money creation complicates investing.”

    “If the economic collapse gets so bad that the government inflates the living daylights out of everything and tries to save all the things going bankrupt, then gold will go very high and the dollar will fall drastically.”

    http://www.lewrockwell.com/rozeff/rozeff262.html

    “…if higher U.S. stock prices really did result from an improving U.S. economy, the dollar would be rising in tandem with stocks. However, every time stock prices rise the dollar falls. The best explanation for this dichotomy is that it is inflation not growth that drives both stocks and the dollar. So rising stock prices do not really indicate a bull market in stocks, but a bear market in the dollar. Those who cannot differentiate between the two will continue to misread the market and the economy.”

    http://www.lewrockwell.com/schiff/schiff73.1.html

  29. USA 2.0 says:

    The American taxpayers “gave” several dozen lunitic leaders billions since the end of WWII. 

    I bet if America got all the money back that it gave to other countries, all forms of aid, since 1776 it would wipe out the $14 Trillion in debt.

    I am sick of giving.

  30. Great Balls of Fire says:

    SATIRE

    This NoLabor Day, tune in to the 235th annual Jerry Lee Lewis “Save America Telethon”, we need to raise $14 trillion by next Friday or face eviction. 

    All we ask is a small donation of $2,000 from each person on the planet to save America.     We are bleeding $1 billion per day and we could use your help.

    Call now, operators are standing by (outsourced to India of course)

  31. Steve says:

    I just realized that all that drug violence down on the border is from the Mexicans trying to get Charlie Sheen Cocaine for his parties. 

  32. Lady Hawk says:

    Mac, thanks for posting this article. After reading it, my thoughts were – now that’s what I’m talking about. It sets a different tone and conversation when talking about the under, unemployed and not in labor force.  It provides the reality and background that at least a third of the population in this country is dealing with.  No jobs = no work = no earned money.

    We’ve had twenty years of production and jobs being outsourced, massive illegal migration pushing down wages and taking not only the low skill jobs, but displacing American workers in the trades and services.  In the meantime, the government manipulates the stats and plays mind games with the citizens to shove 30 million illegals down our throats as being good for the country and that these invaders are not draining our treasury and are only working jobs Americans won’t do.

    Manos, you are the canary in the mine shaft – shining a light on what may be coming our way. Your posts make the why and what I do real. I thank you for the connection and being so personal. It goes without saying, if can help – just let know how. You may be far away, but not flying alone.

  33. manos says:

    Thanks all for your concern.
    My comments regard all people around the world. We have entered an era in which others decide for our future. One day everything is fine and the other day they tell you about austerity.
    I remember 3 years ago, the brain-wash directed to households: buy TVs, cars, cell phones, a new way of life, through bank credit. It was soooooo easy to get a loan or 25 credit cards.
    These bastards used the psychology as science to manipulate us.
    Most households, at least here, had the dream of buying their own home.
    So we reached today, with thousands of mortcages, with 1.5 million unemployed, no jobs, and no production capacity.
    Companies leave the country to open business in Albania, Bulgaria, Romania, and Turkey.
    As the capstone to this tragedy, the government wants to close down all family businesses (groceries, drugstores, small lawyers, doctors, engineers, truck-drivers) in order to bring huge chain-stores or huge companies, in order to reduce the cost for the citizen.
    We all know that this is not going to happen. It’s like Celente’s point of view regarding main street and wall street.
    The worst thing is that all the above are happening globally. It’s like a big gathering of some dark brotherhood from the mediaval ages.
    I don’t want to sound poetic or whatever. I have so much anger inside and i don’t see the exit.
    Be safe friends and don’t give up. Usually the good prevails.

    Manos

  34. Cindy says:

    VRF – My companies CPA said get rid of as much personal debt as you can..ASAP!…  

    Excellent advice, but being a single mom (not by choice) working my butt off every day for long hours at my job I can’t get ahead for anything.  Just paying my monthly bills takes all my take home pay.   Then when something unexpected comes up that I don’t have the money for (kids getting sick, car constantly breaking down,  etc.) I have no choice but to rely on my credit cards if there is anything available.  I desperately want to pay off my tons of debt and start my prepping now, but struggle and stress how in the world to accomplish this.  Unless I win the lottery (which I don’t play because I can’t afford it) would it be advisable to just continue paying my CC’s minimum payments (that’s all I can afford) or let those go and instead start buying and storing food and other prep items?  I’m really worried because I see the writing on the wall and have to protect myself and my family so we won’t be in harms way at the grocery store or anywhere else when SHTF.
    Blessings,
    Cindy

  35. you want the truth, you can’t handle the truth, you want me in the unemployment line, you need me in the unemployment line.
     the real unemployment number is about 21%

  36. NWFisher says:

    “I am very interested in social developments in America. I believe that President Roosevelt has chosen the right path. We are dealing with the greatest social problems ever known. Millions of unemployed must get their jobs back, and this cannot be left to private initiative. It is the government that must tackle the problem.”

    Joseph Goebbels, Hitler’s Minister of Propaganda

  37. NWFisher says:

    “Think of the press as a great keyboard
    on which the government can play.”
    Joseph Goebbels

  38. NWFisher says:

    “It would not be impossible to prove with sufficient repetition and a psychological understanding of the people concerned that a square is in fact a circle. They are mere words, and words can be molded until they clothe ideas and disguise.” 
    Josesh Goebbels

    P.S. Don’t forget for an instant that Obama and friends know these principles well and use them everyday. 

  39. Goldenfoxx says:

    Comments…..NWFisher…you’re scaring me!  Good quotes!

  40. NWFisher says:

    Actually, this stuff just makes me weary, sad and a bit angry. They keep doing the same thing and it keeps working.

    “The most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly – it must confine itself to a few points and repeat them over and over.”
    Joseph Goebbels

    “There’s nothing new under the sun.”
    King Solomon

  41. The reason why the unemployment rate is dropping is because the government is excluding large populations of unemployed people.

    Here’s my breakdown of the government’s games.

  42. clemm says:

    people , i have become convinced we are going to new places… meaning hyperinflation, very soon…. i believe all real assets and even the stock market, will go much higher , it will wipe alot of rich people out, as well as all debt, life will become better but we will all have to modify our lifestyles.. in many ways…. it is truly a bad time,but a hopeful time in many ways,now this is all provided we do not have a terrible natural event that wreaks havoc on the world, which i do not discount. if that happens, all bets are off…. but other than that , hyperinflation is inevitible, and frankly is probaly the best and most hopeful scenario that is possible now…. let the chips fall where they may when it all settles down.

  43. Comments…..

    Cindy—I am not a CPA, just had hard times in the 36 years of marriage…and an understanding in this house from him…he brings in cases of things from Aldi’s..no cards, no Christmas, no birthday, no Valentines day…not here.
    Noone else is stepping in here, so I will…pay only what you can get away with on those CC…I mean show a record of ‘trying’….

    Take EVERY quarter you can muster and buy ramen noodles (15 cents each), soups (2/$1), pancake mix(32 oz. @ $1),
    syrup ($1), mac & cheese (3/$1), tuna (2/$1 or higher), peanut butter/crackers; and then when you have emergency food for a week or even two??
    Buy on sale (if possible) green beans, peas, corn, carrots, beef stew, chicken dumplings, you get the point…..and build from there…
    CC calls?? You are a hardship case.

    Good luck and God bless your effort.

    The government will not be there for anyone when this goes down..cocoapuffers are in deep poop.

  44. Anonymous says:

    Comments…..

    watch it on the ramen noodles, they go rancid (I made that mistake) after perhaps a year they taste horrible…

  45. shoemaker says:

    Just dawned on me why they messed with our paychecks.  They increased our tax witholding while decreasing our social security witholding…..this will cause everyone to get a nice fat tax return right before the next election, just months later.  It will be a small stimulus package for “main street” at the expense of social security.  What a shell game. 

  46. shoemaker says:

    Cindy – IMO, if I were in your shoes, I would be worried too.  Do you have any family that will take you in?  That could give you the opportunity to pay off some bills, and create a plan/prep for all sorts of emergencies. 
    If no one can take you in, or you own your home, can you rent a room for some extra money? 

  47. Durango Kidd says:

    Lost In Missouri: Both Egypt and Israel get $3 billion a year from US as a result of the Camp David Accords engineered by Carter. Mubarak has been taking his cut ( 1 billion a year) for the past thirty years. Compounded, its not hard to imagine a net worth of $50-70 Billion for this guy.

    Cindy: A difficult predicament to be sure, but think you should squeeze one dollar out for a lotto ticket every time the pot reaches a certain amount, using your family’s numbers. A homeless guy in Minnesota spent his LAST dollar and won some serious cash last fall.

    Stick to your numbers and stick to your jackpot size (after taxes) and play a dollar now and then. Lightning does stricke and it sometimes it strikes twice in the same place. Good luck!

    You can’t win if you don’t play.

  48. Comments…..

    For God’s sake shoemaker,…if she owned her own home, she wouldn’t be in this mess; whereas, neither would most owning their own home..it is our biggest debt, coupled with taxes and homeowner’s.

  49. Zonzloid says:

    Comments…..JJ, you’re telling Cindy to buy all prepackaged preportioned expensive per ounce crap. I buy EVERYTHING bulk, pasta, beans, wild/white rice, flower, powdered milk, baking powder etc. My dollars will go WAAAAAAAAAAY farther than yours….And I preserve with Argon Gas. 

  50. Peewee's Mom says:

    @ Cindy,

    I know and feel your pain. I will say a prayer for your efforts to be blessed.  Take JJ’s advice it works. I have cut coupons, shopped the sales at the local grocery stores in my area.  I realize being a single parent doesn’t give you much time for this time of thing.  You can do it, Sister.  I have faith in you 🙂

  51. Anonymous says:

    but and store all kinds of dry beans,white rice,wheat(even if you have to grind it by hand)sugar,some plain old lard.oats,groats,split peas,whole tomatoes in the #10 cans,seasonings,salt. for starters. get a half ton of each of the above, then expand

  52. Anonymous says:

    I agree Shoemaker on tax return.  I’m sure the dollar will be worth more in the future…..

  53. overtheedge says:

    Quote: DK   
    “Gour: The parallel you draw between debt and GDP is understandable but not accurate. The increasing GDP reflects greater wealth to the benefit of BIG Business, BIG Banking, and the uber rich. ”

    Once again I assailed by nonsense. Gour is correct. His thesis is based upon Keynesian economics and the fact that the FRN is just a promissary note lacking any backing.

    The US spends about $4 of public monies to generate a return of $1. That is NOT $1 profit, but rather a $3 loss. The GDP INCLUDES ALL gov’t spending. The gov’t does not and never has produced wealth.

    Based on these facts alone, Gour is correct.

    That the money goes to the wealthy is a red herring. Since the dawn of history, all wealth moved towards the most productive sector and away from the least. With a litany of entitlement programs, the gov’t attempts to redistribute the tax receipts to the least productive.

    Back to the unemployment issue. Taking a hard look at the numbers, the real number of people out of the job market probably exceed the number of people on food stamps/Quest card. This means probably 40+ million unemployed or to put this in perspective, almost 45% of the employable lack a job.

    Imagine the mess if the 99ers were cut off from extended benefits.

    Read Adam Smith’s “Wealth of Nations.”  Even after all these years, there is no better work describing capitalism and the free-market.

    I’ll leave you with a thought. Unemployment is actually UI (unemployment insurance.)  Could insurance be the real boogeyman? Didn’t Warren Buffet state to the effect that, “buying Geico was the smartest buy he’d ever made. As long as the folks in the front office do thier job, the people pay you money up front for a payback down the road leaving you lots of money to play with.”

    Isn’t the military, insurance against invasion? or nowadays insurance against overseas profit loss? Isn’t Social Security insurance? Mandatory vehicle insurance. Mandatory homeowners insurance if you have a mortgage.

    Have you ever heard of a term used in the insurance industry called, “residuals?”  These are the future cut of the premiums paid to the agent that wrote the policy. Friendly Joe sells you insurance and from every premium paid for the next several decades Joe gets a cut. When Joe retires, he sells his future cut of your premium to another agent. (now you know why internet and telephone based insurance discounters can sell insurance cheaper – no residuals.)

    Where do you think the insurance companies invest the monies from the premiums?

    Ladies and gentlemen, I submit that the entire system is based upon cash flow with attendant tax liabilities. The government will do all it can to protect the tax revenue stream and enhance them. The bigger the stream, the greater the protections. Hence Obamacare. Did you think that the insurance companies didn’t loose monies in the melt-down? Where will the insurance companies get the money to cover the policies? Imagine what would happen if the general populace began believing in their insurance policies being under-funded.

    Why was it so important for Congress to pass a UI extension for a program that is managed by the individual states? Could the states be broke? Could the states be faced with unfunded liabilities?
    ————————–
    “watch it on the ramen noodles, they go rancid (I made that mistake) after perhaps a year they taste horrible…”

    Watch it, yes. But generally speaking false. The problem is the seasoning packet. Rough handling causes the noodles to puncture the seasoning envelope. The small fat content gets air and goes rancid. The noodles are just fine – add bullion. I’ve kept ramen for years as long as I keep it in the case (yep, case lots). I date each case and rotate. The older packages of seasoning get a sniff and if rancid, I use bullion for seasoning.
    ———————–
    This bring to mind pasta cooking. In hard economic times, cooking fuel will be a luxury. (hell, everything will be a luxury.) Boil the water, put pasta in large canning jar, add the boiling water and close the lid. Wait allotted time and twamzonko, pasta is cooked. Done the same with rice and hot cereal. Or go ahead and waste fuel for cooking.

    Eat your food raw when possible, otherwise boiled for highest nutritional benefit.

    You can bake potatoes quicker by putting a 40d nail lengthwise through the potato. Fuel WILL be a luxury.

    Learn you lessons when times are good otherwise failure is assured. Future increases in unemployment will make critical survival skills the best insurance you can have.

    Lastly, in survival situations even rancid is edible. Don’t you folks read history? The reason the spice trade was so lucrative was spices masked the pervasive rancidness in medieval Europe.  S’pose strong spices might be a good addition to your stocks?
    ——————————-
    Been living in rural Alaska for better than 3 decades. During that time I have experienced at least 5 months a year with no income each year. When some supposed jack-wad expert spouts nonsense gathered from some book, article or fertile imagination that is contrary to my experience base, I get pissed. 

    If you aren’t practicing what you preach, shut up! The denizens that frequent this site need solid proven ideas. The coming decline will be hard enough without the crap spouted by self-styled experts lacking real experience. 

    Consider me the equivalent of a community college instructor. I don’t care what you do with the info. I spent a life learning and I’ll share the knowledge. Once I say it, I’m done. Use it or not, you ain’t no kin of mine and because you don’t live nearby, you’re success isn’t my immediate concern.  A person with critical thinking skills will double or triple-check what I’ve posted.

    As an Alaskan outdoorsman, been there, done that, survived everytime. Ever slept outside at -36F with no sleeping bag and slightly rancid ball of moose fat for calories? How about snowshoeing 8 kilometers at -58F? How about two weeks in the high Oregon desert during August and have to harvest water? Ever faced a winter with only the garden and hunting to feed a family of four all winter?

    Yah, I’m tired of reading nonsense by self-styled experts. Been there, done that and I am NOT an expert. Just a capable student willing and eager to increase my experience and knowledge base.
    ——————————————
    If you fail to practice a skill until it becomes an automatic response, when a true survival situation occurs, you will find out that time is your greatest enemy. Ready access to food, water, shelter, heat and recreation are what keeps you alive. Yes, RECREATION. Recreation accents and increases positive mental outlook. Without it, you WILL reduce your chances of survival. Cards, board games or whatever. To quote Mary Poppins, “a spoonful of sugar makes the medicine go down.” Recreation is the sugar in a survival situation after the critical tasks are completed for the day.

  54. So if you are no longer counted as in the unemployed, are you counted if you at some point get a job

  55. NWFisher says:

    overtheedge,
    Very good points. Since you’ve got the hours in, it’s good for you to share with some that want to learn.
    A lot of folks aren’t living in reality. They somehow think that if everything did fall apart, they will be just fine. They get geared up for the crazy hordes coming to get them and tend to forget things like how much trouble a bad tooth can cause. Or what a little nasty virus or bacteria can do–or cancer, etc…
    Yep, the tips on saving fuel are good. A little addition to that, boil a big pot of whatever you’ve got, turn off the heat and wrap it in blankets or an old sleeping bag to finish cooking, same principle as the pasta, rice, wheat, etc..
    Great point about recreation. All survivin’ and no play makes for some nasty cabin fever.

  56. Durango Kidd says:

    Overtheedge: As I read his post he equates GDP (Gross Domestic Product) to our national debt as if there is a correlation or parallel between them: meaning we have a growing GDP because of our rising debt. Specifically, he said:

     “If you look at a chart over the past thirty years it will show a rising GDP and a corresponding rise in debt levels in the US and you will notice that they move in lock step.  Very interesting! What does this say?  It is all a sham.  Rising GDP simply indicated rising debt.”

    There is not a correlation to them. He is saying that we have a rising GDP because we have rising debt. They are as distinct as apples and oranges. I can’t believe you would think they are one and the same, so how can you support that statement?

     Historically, we don’t always have a rising national debt with a rising GDP as we do now. Sometimes we have a rising GDP while we have a declining national debt. That is the issue I had with him. I think you missed that point.
    Let me point you to the graph at SHTF Times in the article Gecko Greed: The National Debt; which shows this to be the case.
    The question we should be asking ourselves is where did all that money go? The increasing GDP reflects the rising profits of BIG Business and BIG banking; the rising national debt reflects the
    balance of payment deficits and increased government spending; none of which is not trickling down to the average person, because the disparity between the haves and the have nots is increasing and at an increasing rate.

    The lion’s share of that (gov’t) money being spent by the government is going to BIG Business too: the military-industrial complex to support the wars of unfettered capitalism for the NWO.

    I will assume the rest of your rant is direct at others because it doesn’t apply to me. Chill out brother!

    Whats your take on “global warming” since you live in Alaska? What is happening to the ice pack and glaciers?

  57. NWFisher says:

    DK,
     “…Whats your take on “global warming” since you live in Alaska? What is happening to the ice pack and glaciers?…”

     Until Overtheedge gets back you might find this helpful. http://pafg.arh.noaa.gov/
    You can click on any part of Alaska, any day and see the forecast (Fairbanks, Barrow, etc. will give you a good idea of what’s going on). Good info to have. Especially for anyone who spends a good amount of time outdoors. According to the NOAA forecasts I don’t think any polar bears are suffering from hyperthermia or lack of ice to hunt on.

  58. Andrew de Berry says:

    Comments….Wow! You poor precious people across the pond. As a pensioner in the UK fortunate enough to have invested in gold some years back, financial armageddon awaits many millions over here as well. For the present they are just subsisting on being in denial. living off the fumes of  goverment lies.  Perhaps we’re no more than six or so months behind yourselves. Just wish I knew how to help. 

  59. Durango Kidd says:

    NWF: Thanks for the link. Meant to ask him about the perma frost thawing in summer too which is supposed to be a new thing, at least to the extent of it. Thought someone living in Alaska would have a better handle on that.

  60. overtheedge says:

    History is pretty well etched in stone and for the most part, from WWII, rising GDP has usually mirrored deficit spending. We overlook the fact that the government is in the consumables businees. It consumes the public’s productivity and produces nothing.
     
    You are correct that rising GDP can be productivity driven. But like you mentioned, elements of the economy such as the military-industrial complex can consume faster than tax revenues can replace.
     
    All the tax revenues coming from the finance sector are created by the productivity of the consumer. The consumer pays for everything: all corporate taxes and the income taxes of those working in that sector.
     
    Okay, back to the original aspect of this thread. Without the increases in gov’t spending, GDP would have fallen off the chart. Couple this with the large number of employed servicemen/women and gov’t employees, any lay-offs would deal the economy a death blow.

    So GDP is total price for all goods and services within the economy. Balance of payments is not seperable from the GDP. Deficit is debt. If a foreign country buys the debt, such as a T-note, the US aquires debt. If I buy a conex load of whizbangs from China, I pay in FRNs and they are possibly traded for T-notes. The FRN is a prommissary note. A debt.

    If I sell something to China, I get paid in FRNs. I hold US debt now.

    Recall the gov’t consumes? They scatter my FRNs all over the world as bribes, bombs  and bullets. The question of where the money went? The gov’t destroyed it.

    Where the deficit rolls in is in the form of increased demand for products and services by the gov’t plays havoc with the supply/demand curve. Increased demand drives up prices. Enter inflation. The individual consumer lacks the ability to increase income to meet the increased costs. They also lack the ability to pay more into the tax stream to cover these inflated prices. Gov’t rolls the presses for an additional hour.

    The newly printed bills are sent to the Fed who spends them on T-notes. The US Treasury gets them back to spend. A combo Ponzi scheme and money laundering effort fully sanctioned by our elected.
    —————————
    Gour is correct under the current economic conditions. You are right in a well-managed economy.
    ———————————-
    Permafrost and glaciers.
    First, I don’t believe in Anthropogenic Global Warming (AGW) nor do I disbelieve. I attach no credibility to climate models. ALL the evidence has confirmed that the models are failures. Some more than others. Even the temperature data is questionable due to the enormous increase in the “heat island” effect.
     
    So let’s start with glaciers. These are cyclic. Black Rapids Glacier a 150 miles north of me surged to within rock-throwing distance of the highway in 1937, all colder period. It is now receded several miles during a supposed warm period. Even glaciologists ponder this. The enviros credit this to the lowering/rising firn line; that line between accumulation and loss that balances out. This argument fails to account for surging of up to 200 ft per day.
     
    Other glaciers are retreating, advancing or neutral. No distinct reason.
     
    Permafrost has its own cult following. Any warming in the arctic will permit soil organisms to break down the organic matter and release methane. However this is also a cyclic event. You should see the fossils that confirm Alaska’s former temperate climate as opposed to today’s sub-arctic/arctic conditions.
     
    The biggy that hits the news is melting permafrost along the Bering Sea coast. “Scientific American” magazine lost my subscription when they published an erroneous blurb about it.
     
    The facts:
    Along the Bering Coast, much of the interface between ocean and land is punctuated by clay bluffs. These get direct sunlight and thaw every summer. The intense storm waves common to the coast remove this thawed material and allow further thawing.
    Enter the great missionary efforts to convert them heathen natives. These missionaries determined sites for church residence schools. Children removed from parents and sent to church operated schools. The sites were close to shipping by ocean vessel.  Not on the bluffs, but in close proximity. Decades later, the school site is now a village and bluff erosion  is right next door.
    So now it is AGW threatening these villages. How can we afford to move them? AGW is our fault. We must do something. Or so they say.

    The problem is, was and will always be, unqualified people making long-term decisions. Society proclaims that we never question qualifications or motivations. Even “Robert’s Rules of Order” proclaim such nonsense.

    So is AGW real? Unknown. Is the climate warming? Undoubtedly as we ended the LIO (little ice age) back in the 1800’s. The only way an ice age can end is by warming the planet. Remember that history has Washington crossing the ice-choked Delaware River on Christmas Eve. Recall the story “Hans Brinker and the Silver Skates” skating in Holland?

    Anyway I diverged from the thread. If we halt AGW, can we prevent AGC? Maybe we can hire a bunch of folks to study this, lower the unemployment numbers and increase the tax base.

  61. Durango Kidd says:

    OTE: Don’t agree with your statement that GDP would have fallen off the edge without gov’t spending: that occurs only in Obamanomics.

    If spending is cut and taxes are cut the result is increased GDP because BIG Business invests in plant and equipment to increase their profit under lower tax rates.

    The plan that Obama initiated after the first of the year is the plan he should have put in place in the beginning. Had he cut direct gov’t spending and reduced taxes we would have already been in a recovery by now.

    The deficit would have increased due to less tax revenue initially, and by now both the economy and tax revenues would have started to pick up.

    Instead, Obama did exactly the opposite of what every second year business student knows that you do not do in a recession: he increased government hiring and thus direct government spending, rather than stimulating with tax incentives for plant and equipment, until now, which has only compounded the problem.

    There is no direct relationship or parallel between GDP and National Debt as suggested by gour. They are apples and oranges.

    SEE: SHTF Times … Chris Matthews: You Just Don’t Get It 11/2/2010

  62. overtheedge says:

    DK, what part of gov’t spending being part of GDP do you fail to understand? Perhaps you fail to understand that the Fed and the US gov’t refuse to use Generally Approved Accounting Practices.  Under GAAP, the deficit would be subtracted from GDP. Under the current accounting practices, the deficit is not subtracted. Under GAAP, debt would be clearly displayed on “Accounts Payable”, but under the current practice the debt is NOT.

    Cutting gov’t spending would improve “real” GDP under GAAP. Cutting taxes can’t and won’t work. Without consumer spending based upon full employment, it is fundamentally impossible for increased tax revenue stream. No well managed business will invest in production without an increase in consumer base. Without far lower unemployment figures, the consumer base will continue to contract due to consumer fears of further lay-offs.

    No job = no money = no consumer spending = no tax revenue =  lowered capital investments by businesses = increased deficit spending. Government spending buys electorate loyalty.
     
    Under GAAP, you’d be correct. Under current practices you are not only wrong, but you are also confused. Why do you think so many commentators keep bringing up the refusal of gov’t and Fed to use GAAP?  But obviously they are wrong, I am wrong and you are right. Just cut spending and taxes and the deficit goes away, the debt is reduced, GDP rises and we will enjoy full employment. Wow, how could I have been so wrong?

    Have you outlined this to your elected in DC? I’m sure they are eager to solve this problem and would welcome your enlightened analysis and solutions. Your elected wouldn’t have to actively campaign for re-election just because there wouldn’t be anyone foolish enough to face the landslide against them. Congress would pass a resolution naming a DK day in honor of you for solving all these economic  problems so effectively.

    Your choice to trot out Obama in the conversation displays how little you understand who taxes and spends. It sure ain’t POTUS. He asks “Mother may I” and Congress approves or denies. POTUS is the designated fall-guy.

    Shroomy isn’t the only one capable of sarcasm.

  63. Durango Kidd says:

    OTE: I never said if you cut taxes you will cut the deficit. What I said was you must cut taxes AND cut direct government spending to revive the economy, as tax cuts with incentives for plant and equipment will produce jobs, income, and profit.

    By cutting taxes you actually increase the deficit initially when the private sector invests that capital that they would otherwise pay in higher taxes, into P&E. This gives positive leverage to GDP because it creates  jobs, income, and taxes. It eventually raises tax revenue because the private economy gets bigger.

    This was the process that both Kennedy and Reagan used to stimulate the economy.

    What Obama did was increase spending by increasing the number of federal employees, which creates a bigger deficit without generating more national income. Federal employees are an expense no matter what accounting system you want to operate under.

    I understand that government spending is included in GDP. But I also understand and you do not seem to understand, that GDP is not a function of the National Debt, there is not a direct correlation between GDP and National Debt and this has been proven true in periods where the GDP increased, while National Debt deceased, say like, after WWII as but one example.

    GDP and national debt are apples and oranges! 🙂

  64. NWFisher says:

    overtheedge,
    You said, “…Your choice to trot out Obama in the conversation displays how little you understand who taxes and spends. It sure ain’t POTUS. He asks “Mother may I” and Congress approves or denies. POTUS is the designated fall-guy….”
    ——————————————————————————-
    Just to inject a little balance here I want folks to understand that there was NO chance of Congress saying “No” to Obamas’ profligate ways until the new guys came in last month.
    Pelosi and Reid had comfortable majorities, worked their backrooms deals together with the POTUS and his buds. Geithner, Summers, Immanuel, et al —all in an incestuous political, financial and ideological relationship.
    There was no “Mother may I” in this case. There was no balance of power for at least two of our three branches of U.S. Government. He and his buddies made their shadow friends on Wall Street, the BIG banks (U.S. and International) and big business filthy rich while putting the financial chains on us and future generations.
     Anytime Obama wants to go before the public and admit his mistakes and ask for full cooperation to get this Nation on the road toward REAL fiscal sanity and recovery, he’ll have America’s backing. He won’t chose that path. That’s obvious. 
     

  65. farmer says:

    Comments…..I am a debt free farmer and we are putting provisions away for the upcoming S— Storm. No matter what the Obamanites and the media tell you the storm clouds are in sight. People better be ready to hunker down and prepare for austerity and no one from government is going to help. It’s going to be Marshall law and survival of the prepared.