According to the Bureau of Labor Statistics, nonfarm payroll
employment declined by 3,445,000 from December 2007 through December 2008.
The collapse in employment is across the board.
Construction lost 520,000 jobs. Manufacturing lost 806,000
jobs. Trade, transportation and utilities lost 1,495,000 jobs (retail trade
accounted for 1,120,000 of this loss). Financial activities lost 145,000 jobs. Professional
and business services lost 713,000 jobs. Even government lost 188,000 jobs.
Only in health care and social assistance has the
economy been able to eke out a few new jobs.
Many analysts believe the job losses will be as great or
greater during 2009.
Moreover, the reported job losses are likely understated. Noted
statistician John Williams
(shadowstats.com) reports that biases
in measurement have understated the job loss over the last 12 months by
Williams also notes that the official unemployment rate is
an enormous understatement, due in part to the Clinton administration�s
decision not to count as unemployed those discouraged workers who have been
without jobs for more than one year. Williams reports the unemployment rate as
it was measured prior to �reforms�
designed to minimize the measured rate of unemployment. According to the
methodology used in 1980, the US unemployment rate in December 2008 reached
government lies to us about economic statistics, just as it lies to us about �terrorists,� �weapons of mass destruction,� �building freedom and democracy in the Middle East,� and the
An objective person would be hard-pressed to find any
statement made by the US government that is reliable.
The collapse of the job market means even harder times for
last year�s and this year�s crops of college graduates.
The offshoring of professional jobs and the widespread use by US corporations
of H-1b, L-1, and other work visa programs for foreigners have left many recent
American university graduates without careers.
Recently, Bill Gates of
Microsoft was pleading with Congress to allow even more foreigners in on work
visas. According to Gates, there is a shortage of American workers despite a
17.5 percent unemployment rate. I personally know American computer engineers,
both seasoned and recent graduates, who cannot find jobs.
What Gates and American corporations want is cheap labor, in
effect indentured servants,
unprotected people who don�t demand an American standard of living and who have
no student loans
If Congress expands the work visas as US unemployment
mounts, we will have one more piece of evidence that �our� representatives have no sympathy for the American people.
Where were America�s leaders while the economy slipped over the
Our leaders were telling us lies in behalf of special
interests into whose pockets Washington was pouring the taxpayers� money. Our
leaders engineered wars that put billions of dollars into such disreputable
pockets as Halliburton�s, the firm of the American outlaw, Dick Cheney, and
into Blackwater, supplier of the overpaid mercenaries that the Bush Regime uses
to beef up its military force in Iraq. Some of the taxpayers� billions, of
course, recycled into �our�
representatives reelection campaign funds.
Our leaders were too busy making trips to Israel to reaffirm
their support for Israel�s ongoing theft of Palestine and for wars that enable
Our leaders were too busy serving financial interests by
dismantling regulatory barriers to over-leveraged greed. The extraordinary
level of leveraged debt and the fraudulent financial instruments resulted in
annual compensation for hedge fund managers and investment bankers larger than
a king�s ransom.
When the leveraged mortgages went bust, the banksters
declared a �crisis� and Congress
responded by ripping off the American taxpayers for another trillion dollars.
More is to come. Credit card debt, car loans, and commercial
real estate mortgages have been securitized, too. There is little doubt there
are derivatives based on this enormous pile of debt. As each �crisis� unfolds, it will mean more
bailout rewards for the crooks who deep-sixed the US economy.
It is not implausible that by the end of this year the
unemployment rate, honestly measured, will be as high as during the Great
Few in Washington think there is any cause for alarm. Obama
is calling the situation �serious�
not because he believes it is but in order to get another trillion dollar �stimulus� package on the taxpayers�
books. Stimulus will do the trick, economists say, and, moreover, the Federal
Reserve has already extended $2 trillion in loans, but won�t say to whom the
money has been lent.
This massive expansion of new debt, economists think, is
going to fix the economy and put people back to work. They think the solution
to excessive debt is more debt.
The federal government�s budget deficit for the 2009 fiscal
year will be $2 trillion at a minimum. That is five times larger than the 2008
How can the Treasury finance such a massive deficit?
There are three sources of financing. Possibly people will
flee from stocks, bank deposits, and money market funds into Treasury �securities.� This would require a
form of �money illusion� on the
part of people. People would have to believe that investments can be printed,
and that printing so many new Treasury bonds would not dilute the value of
existing bonds or reduce their chance of redemption. They would have to believe
that the bonds would be repaid with honest money, not by running the printing
A second source of financing might be America�s foreign
creditors. So far in our descent into massive debt foreigners have footed the
bill. Our foreign creditors now hold very large amounts of US debt and other
They are likely to develop a case of cold feet when they see a $2 trillion
expansion in US debt in one year. Their most likely response will be to start
selling their existing holdings.
Who would purchase them? The only way the Treasury can
redeem the bonds that come due each year is by selling new bonds. Not only must
the Treasury find purchasers for $2 trillion in new debt this year but also
must find buyers for the bonds that must be sold in order to redeem old bonds
that come due.
If foreigners cease buying and instead start selling from
their existing holdings -- China alone holds $500 billion in Treasury debt -- a
deluge will fall on an already flooded market.
The third source of financing is for the Federal Reserve to
monetize the debt. In other words, the Treasury prints bonds and the Fed
purchases them by printing money. The supply of money thus expands dramatically
in relation to goods and services, and high inflation, possibly hyperinflation,
would engulf America.
At that point the US dollar, if still on its feet,
collapses. The import-dependent American population, dependent on imports for
their mobility, their clothes, shoes, manufactured goods, and advanced
technology products, no longer will be able to afford these imports.
A scary scenario? Yes. Overdrawn? Perhaps, but perhaps not.
The United States has spent the last seven years in pointless wars that
benefited only the military-security complex and Israel�s aggression against
Palestinians and Lebanon. According to prominent experts, the out-of-pocket
cost and already incurred future liabilities of Bush�s wars comes to $3
The cost of the Bush Regime�s wars, together with the 2009
budget deficit that Bush has bequeathed to Obama, equals half of the
accumulated national debt of the United States.
Several years ago, United States Comptroller General David
Walker informed Congress and the White House that the accrued liabilities of
the US government exceeded the ability to pay. Yet, �our� leaders ignored the comptroller general and rushed headlong
to add more trillions of dollars to federal liabilities. In effect, the United
States is bankrupt at this present moment. According to generally accepted
accounting principles, the federal government has a negative net worth of $59.3
Who is going to lend to a bankrupt government that is ruled
by financial crooks, the military-security complex, and the Israel Lobby? How
long will the world finance US aggression that disrupts energy prices, keeps
the world on edge, and makes America�s creditors complicit in war crimes?
Craig Roberts [email
him] was Assistant Secretary of the Treasury during President
Reagan�s first term. He was Associate Editor of the Wall Street Journal. He has
held numerous academic appointments, including the William E. Simon Chair,
Center for Strategic and International Studies, Georgetown University,
and Senior Research Fellow, Hoover Institution, Stanford University. He was
awarded the Legion of Honor by French President Francois Mitterrand. He is the
author of Supply-Side
Revolution : An Insider�s Account of Policymaking in Washington; Alienation
and the Soviet Economy and Meltdown:
Inside the Soviet Economy, and is the co-author with Lawrence M.
Stratton of The
Tyranny of Good Intentions : How Prosecutors and Bureaucrats Are Trampling the
Constitution in the Name of Justice. Click here for
Peter Brimelow�s Forbes Magazine interview with Roberts about the recent
epidemic of prosecutorial misconduct.