'Modern government calculators are designed to obfuscate reality and convince people things are just ducky'
The post The depression no one wants to admit appeared first on WorldNetDaily.
According to official government statistics, the economy is strong. Unemployment is low (about 5%) and inflation is mild (about 4%).
Yet every single American – those of us who live in the real world, not Washington’s ivory tower – knows something is wrong. A single trip to the grocery store is enough to verify that. A new survey by Intuit Credit Karma reported, “28% [of those surveyed] said they are putting off paying for necessities, such as rent or other bills, to afford groceries – while 27% say they are occasionally skipping meals. Another 18% have applied for or considered applying for food stamps and other types of assistance, and 15% rely on or have considered visiting food banks for groceries. … In other big-picture data, almost half of those surveyed, about 44%, said they feel financially unstable. The figure is even higher for people with household incomes of less than $50,000.”
But how can this be if the economy is so strong? The culprit, of course, is how things like unemployment and inflation rates are calculated. Modern government calculators are designed to obfuscate reality and convince people things are just ducky.
But Shadowstats tells a different story. For those unfamiliar with Shadowstats, it is a statistical website that calculates leading indicators according to the methodology used by the government until about 30 years ago, when the methodology was altered to disguise the true state of economic affairs. As economist Peter St. Onge put it, “Every official economic number out there is broken.” Shadowstats aims to set the record straight.
According to Shadowstats’ Alternate Inflation Charts, “The CPI chart on the home page reflects our estimate of inflation for today as if it were calculated the same way it was in 1990. The CPI on the Alternate Data Series tab here reflects the CPI as if it were calculated using the methodologies in place in 1980. In general terms, methodological shifts in government reporting have depressed reported inflation, moving the concept of the CPI away from being a measure of the cost of living needed to maintain a constant standard of living.” By the 1990 calculator, current inflation is running at about 8%. By the 1980 calculator, inflation is currently about 12%.
The Brownstone Institute notes, “The Bureau of Labor Statistics simply cannot keep up, partially because the Consumer Price Index does not calculate the following: interest on anything, taxes, housing, health insurance (accurately), homeowners insurance, car insurance, government services like public schools, shrinkflation, quality declines, substitutions due to price, or additional service fees. That’s a major part of what has gone up, which is why data on particular industries shows a huge gap (groceries up 35% over four years) and why ShadowStats estimates inflation in double digits two years running, having peaked at 17%. Just adding in interest, a paper from NBER estimates, takes 2023 inflation to 19%.”
Now consider Shadowstats’s Alternate Unemployment Charts, which notes: “The seasonally-adjusted SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994. That estimate is added to the BLS estimate of U-6 unemployment, which includes short-term discouraged workers. The U-3 unemployment rate is the monthly headline number. The U-6 unemployment rate is the Bureau of Labor Statistics’ (BLS) broadest unemployment measure, including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment.” By the 1994 calculator – and remember, the official government unemployment rate is currently 5% – the real unemployment rate is currently 25%.
As a reminder, the unemployment rate in 1933 at the height of the Great Depression was 24.9%. Let that sink in. By the economic indicators used during the Great Depression, we’re currently in a depression. No wonder the Democrats are using alternative calculators. They’re desperate to hide the truth.
“When you add it all up, you get a strange sense that nothing we are being told is real,” notes the Brownstone Institute. “According to official data, the dollar has lost about 23 cents in purchasing power over the last four years. Absolutely no one believes this. Depending on what you actually spend money on, the real answer is closer to 35 cents or 50 cents or even 75 cents … or more. We do not know what we cannot know. … What the heck is really going on?”
“Are we in a hidden depression?” asks Peter St. Onge. “The idea seems absurd – it shocked me. But, historically, inflationary depressions are hard to see for the simple reason that asset prices pump before consumer prices do. The affluent keep spending since their stocks soared and their house prices soared – sound familiar? In Germany’s Weimar hyperinflation, for example, early on people weren’t complaining about prices, they were popping champagne over how much money they were making on their stocks. The hunger came later. … We get data points like Americans seeing McDonald’s as a luxury item, buying groceries on credit cards, selling off second cars, and downsizing to smaller homes.”
In his 1926 novel “The Sun Also Rises,” Ernest Hemingway’s character was asked how he went bankrupt. The character famously replied, “Two ways. Gradually and then suddenly.”
America is in the “gradually” phase, but that “suddenly” cliff is looming. Remember, our nation now has $10 trillion in debt, which must be rolled over by the end of the year, and the government is piling on an addition $1 trillion in new debt every 100 days. How is this sustainable? Short answer: It’s not.
This is why I expect some sort of nasty “October surprise.” With unsustainable debt, high inflation and depression-level unemployment, something has to give way, and it’s likely to give way just before the election. One gloomy financial writer anticipates the worst: “The financial collapse that is coming will be worse than anything we have ever experienced. …”
If we ARE facing another economic depression, it behooves us to ignore the feel-good government cheering squads and act accordingly. I’ve always wondered if people knew what lay ahead in 1929, what could they have done to brace themselves in 1928? Think about it – because we may well be asking ourselves that question in the near future.
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The post The depression no one wants to admit appeared first on WorldNetDaily.
