State sponsored media will have you know that the economy is doing better. Never mind that the fundamental problems facing America are nowhere near resolved – and in fact – are much worse now than they were prior to the 2008 crash.

Hope is just about lost. Change is not coming.

The much touted recovery never happened, unless your singular measure of economic health is the stock market, in which case America is booming.

The reality on the ground, however, is dismal, as evidenced by events of the past few weeks:

• People are still losing jobs and there’s no meaningful labor to be had. While Vice President Joe Biden continues to talk up the administration’s jobs programs, it’s clear that real jobs – the kind that pay the rent and put food on the table for a family of four – are hard to come by. The official unemployment rate inched up to 9% last month, and if you count those who are part-time laborers looking for full time work we’re at 15.9% (link). As is usually the case, however, the government’s numbers don’t tell the whole story. According to John Williams, utilizing the same statistics that were used to calculate the unemployment rate before 1981, over one in five Americans are currently without work – roughly 22%. The recession of the late 70’s and early 80’s saw unemployment reach 10.8% and during the Great Depression unemployment reportedly hit 25%. Looking at the figures from John Williams, it is quite clear that this jobless recovery is a whole lot worse than it’s been made out to be. We are bordering on Great Depression territory – and it’s very likely that we’re already there.
• Housing Is Destabilizing. The Fed can continue to print as much money as they so choose in an effort to “stabilize” prices, but here’s the deal: It’s not working! Remember that $8000 tax credit for new home buyers? It was used by President Obama and the media to convince Americans to buy homes. For a while, the deterioration in the housing market had slowed. But, as we predicted then, as soon as the tax credit expired, the collapse resumed. We recently learned that home prices are down 8% year-over-year, and estimates that were once positive for growth are now being reassessed. Nearly a year ago we opined that, like Japan’s real estate bubble crash, the US was in for massive declines. We estimated on the order of 50% – 75% from peak to trough. Unless a flurry of new buyers step in from somewhere (see jobs report above if you think this is a possibility), a further decline is all but guaranteed. Even if the Fed is successful in raising home prices with respect to the US dollar, if you compare housing to other assets like food or precious metals, there will be a significant decline in value. The latest housing figures confirm this trend, with housing starts, housing permits and the number of houses currently under construction all missing analysts expectations.
• Consumer Credit Still Collapsing. Officially, consumer credit increased at a rate of 3% year over year. This may seem like it’s a positive thing, suggesting that banks are starting to lend again, the idea being that banks lending means people spending. Looking closer at the numbers, however, shows that those loans aren’t exactly pumping cash back into the economy. As Karl Denninger points out, it turns out that if we separate out loans for college related expenditures, non-revolving consumer credit is actually dropping every month. This means that the money we may have thought was going to boost economic spending on Main Street is actually ending up pumping up the College Education Bubble.
• GDP Growth is a Fiction. In his most recent Wellington Letter, economist Bert Dohmen says that global GDP numbers, including those of the United States, are fictitious. While GDP has been showing positive growth as of late, Dohmen suggests that the growth is based solely on rising prices. As the Federal Reserve continues to print, prices continue to rise. The result is a positive growth rate. If we were to adjust for real inflation by factoring out price increases, then our purported 3% economic growth would actually be negative 2%! That’s a significant difference, and one that has been completely ignored by booming stock markets, which, incidentally, are rising because of the same inflationary effect.
• None of this is self sustaining. As we’ve mentioned previously, with the Federal Reserve’s policies of quantitative easing and the governments bailouts and stimulus the facade never would have been allowed to manifest. The system was on the brink in 2008. It remains on the brink in 2011. If the recovery was truly self supported, then we would be able to stop all of these emergency programs. Doing so, however, would likely have a much worse effect now than it would have had we never engaged in them at the onset of the crisis. The fact is, if the US Federal Reserve really does stop monetary easing in June of this year, the economy will likely drop into a full-fledged depression within a matter of weeks. Thus, the intervention is likely to continue until our creditors pull the plug, at which point we’re toast. Bottom line: we’re just pushing out the timeline a little bit longer because there’s no way out.
• The Fukushima Disaster Is Coming to a Head. While generally out of the news, the reality is that Japan is in serious trouble – and this means that the rest of the world is in serious trouble. HP, one of the largest computer companies in the world, has announced that they are reducing their outlook for the rest of the year because of  “near-term impact from the Japan earthquake and related events.” They won’t be alone. As Michael Ruppert suggested last month, we could very well see the economic system fall apart if and when corporate earnings in June and July don’t meet expectations. Some of the world’s top tier companies had to shut down operations, many are still not operating at full steam, and TEPCO isn’t being completely truthful about what is happening with the nuclear plants. Japan is a large consumer market and they have essentially been taken out of the economic growth picture for now. Couple that with parts distribution problems and this may be enough to flip the switch on the entire global economy.
• Government Raids Private Pensions to Stay Afloat. In January we opined that Timothy Geithner’s letter to Congress, in which he said that the US would have to default on certain debt obligations if the debt ceiling wasn’t raised, was nothing less than a confirmation of how bad things really are. He has all but confirmed that the entire system is just weeks away from collapse in the event we can’t get a credit extension. Congress will undoubtedly pass the extension soon, but at some point we’ll be cut off by our creditors. What Mr. Geithner did this week shows that those “rumors” about the government seizing private retirement accounts were not conjecture. They are, in fact, reality. When push comes to shove, if for whatever reason the US government can’t get the money they need, they will come after yours. Does this sound like a government that is functioning optimally?

We can’t know for sure when the system will completely buckle, though the evidence above indicates that we are well within the collapse `which started sometime in 2007/2008 right now. Predictions and timelines are impossible to get right. We can, however, look at trends. And, the current trends suggest that we are a long way from any sort of self sustained recovery or normalcy. As has been the case for the last several years, we can expect things to continue to worsen.