Ben Bernanke says the recession is over, so it must be true.
Grasping for green shoots to hold on to, the economic cheerleaders in Washington and New York, and Mr. Benanke's collaborators in the media, claim that August may have been the month in which the U.S. economy turned the corner to recovery. However, the federal government’s own obscured numbers tell a different story.
Yes, they admit their clunker of a recovery may be slow getting off the starting line, but they assure us (really our creditors) that the pickup in factory orders and retail sales are signs of good things to come. A mashup of their many claims reads something like, “The stimulus package put together by the brilliant men steering our economy from shipwrecking storm to safe harbor is working! Just, never mind those persnickety unemployment numbers, that’s always a lagging indicator of economic growth.”
It is true that unemployment is a lagging indicator of economic rebounds. Companies unsure of continued upticks in orders first work existing employees longer hours before committing to hiring new workers. However, existing employees working longer hours means more income to tax. As most employees have personally experienced, there is no lag in the take of the tax man.
Where is the recovery then? It's certainly not in the U.S. Treasury's own numbers.
While the average American struggling to get by wants to hope and believe in what the corporate newsletters are telling him, it is doubtful that more knowledgeable creditors of the United States government are paying any attention to the PR reports. That which is being sold to the public as good news, is likely being given as much credibility by our nation’s creditors as a pro forma income statement from a money losing tech startup trying to secure a bigger credit line for itself.
The brutal truth: there is no recovery. We are only watching a temporary scene of smoke and mirrors created by pouring out trillions of new fiat dollars as a solution to the problems caused by pouring out trillions of old fiat dollars.
1) For those who prefer the year-on-year percentages depiction of the Treasury’s tax revenues you can thank Matt Trivisonno for making an excellent chart available, until it was lifted without adequate citation and posted elsewhere.
2) For chart specialists, we have also provided a full version of our chart appearing above. The full version shows the direct relationship between personal income tax receipts and total US employment.
3) Find the official (i.e. fabricated) inflation rate for any period since the Federal Reserve was created to protect us.
4) Our creditors who have hundreds of billions of interest bearing debt out to us probably check it every day, so why not take a look for yourself: Daily Treasury Statement (Sept. 17, 2009) (If they didn't have a gun to your head (literally) would you loan money to a company in this condition?)