USA Growing Poor or What Barack Obama Keeps in Secret

Throughout the history nations go through different periods. The prosperity gives place to crisis, wars to peace, world hegemons become weaker and other countries take their places. Nevertheless, whatever this or that period in the progress of a country could be like, it is very important that state’s political administration stays on the level of challenges thrown by time. On getting acquainted with the Barack Obama’s speech to the nation, one cannot help feeling sorry for American people, experiencing a by far not the best period in their history.

Upon mentioning the anti-Russian sanctions, the leader of the White House emphasized that «today’s America stands strong and united with our allies, and Russia is isolated, with its economy in tatters». Though describing economic succeses of his country, the American president forgot to mention that during his presidency the foreign debt was almost doubled, reaching past 18 trillion dollars or 107 % of GDP. For comparison: only during 2014 Russian foreignt debt was reduced to 18% or 599,5 billion dollars. Volume of Russia’s government reserves is more than 800 trillion rubles, including 419 billion dollars of currency and gold reserves of Central Bank and 2,5 trillion rubles of government’s fund. Russia has positive balance in foreign commerce, the industry is growing, and the budget for 2015 is made with a surplus of 1,9%. For comparison: deficit of foreign commerce during 10 months of 2014 reached 46 billion dollars. In 2014 Russia doubled the gold purchasing and its own gold production.

Meanwhile USA is literally drowning in debts. According to economy analytic D. Hodges, the problem is much more complex. Credit swap derivatives brought the amount of public debt to 1 quadrillion $, when total GDP debt of all countries in the world is 66 trillion $. Five biggest banks of USA accumulated 40 trillion $ in these derivatives, pension fund – 2 trillions. In every moment financial system of the country can fall apart like a rope of sand. If the Federal Government decides to reduce the current debt for 1$ per second, it will take 440 000 years to pay it off. And it is absolutely impossible to repay the derivative debt.

Population’s debts are growing as well. Thus, the total amount of debts among students exceeded 1 trillion USD, the average debt on student loans is 32,264 $. People are paying off the debts for their education even after retirement. An average family owes 155 thousand dollars to banks for their home; in the first month of 2015, the average American family’s debt on credit cards reached 15.611 thousand dollars, coming up from 1989 by 81%. Consumer’s credit debt has skyrocketed since 1971 by 1700%.

The most worrying trend is how fast the debt grows. By 22 of October 1981, the US government has accumulated debts of 1 trillion $, and it took them 205 years. The second trillion of debt has been accumulated over 5 years; the mark of 18 trillion was overcome in November 2014. The last trillion has been gained in just 403 days. During the presidency of George W. Bush the national debt has increased by 77%, with Obama by another 57%, ie 42 previous US presidents have accumulated less debt than the last two.

These numbers show us which economy is really “in tatters”.

However, other Obama´s success reports do not, to say the least, correspond to the facts. For example, the promise to increase the number of jobs in 30 times sounds like (is akin to) Khrushchev´s vows to build communism in  20 years. Indeed, the labour-market in the United States after the collapse of 2008-2013 begins to recover, but the situation is far from being optimistic.

For example, in December 2014 wages declined with the biggest rate since 2006. In 2007 about 10% of all unemployed Americans could not find a job during more than 52 weeks, now these unlucky persons (misfits) form 30% of all amount, 53% of university graduates under the age of 25 years cannot find a job at all. More than 88 millions of able-bodied citizens of America are unemployed and not looking for a job because of the low wages, it is more profitable to receive welfare than to go to the starting positions.

Seven out of eight jobs that were “created” in the US economy, had incomplete work schedule, and the number of workers employed full-time in the United States is still nearly 6 million persons less than in 2007. An American, employed for a full day with a minimal wage, in 1968 gained more than similar worker in USA today. 53% of American workers have annual salary that is less than 30 thousand dollars, ie below subsistence line.

Speaking of the “middle class economy,” Obama omitted that 95% of all jobs lost during the last recession were occupied by representatives of the middle class. In 2008, 53% of Americans referred themselves to the middle class, and in 2014 only 44%. On the contrary, if in 2008, 25% of Americans between the age of 18 and 29 considered themselves members of the lower class, in 2014 49% of young people call themselves poor. An important indicator of the middle class in the United States is the ability to purchase their own homes. But 52% of Americans currently cannot afford it.

America really is growing poor. More than 100 million of Americans participate in at least one social program of the federal government. During the governing of Barack Obama the number of Americans living on food stamps has increased from 32 million to 46.5 million. 22% of Americans have been forced to seek additional distribution points of food aid at the churches.

Total costs for food aid programs have grown to $ 80 billion compared to 38 billion in 2007 and 20 billion in 2000. 65% of American children live in families that receive some form of assistance from the government. More than a million students in public schools in the US are homeless and the total number of waifs has reached a historical mark of 2.5 million. More than 51% of the children, who attend public schools, live in low-income families and have the right to free and discounted meals. Also in Mississippi 71% of the children belong to the category of persons entitled to benefits. Even in wealthy households, the situation is far from prosperity. 76% of Americans live paycheck to paycheck, not having even $ 1,000 for unforeseen expenses. Retirement savings for 46% of Americans do not exceed $ 10 000, and 29% have less than $ 1,000.

Obama proudly announced that 10 million of Americans got health insurance, but kept silent about the fact that in the United States each year die 45 thousand people who were unable to pay for medical expenses. Nearly 35 million people still lack for insurance. The system of Medicare, with which are insured the elderly and disabled, does not cover the cost of dental services, and the very existence of insurance that many clinics do not accept guarantees only a minimum of services. As a result, for many Americans is much cheaper to put dentures than to cure teeth. The cost of medical services is very high aswell. For example, the cost of delivery of the heir of the British Crown costed 15 thousand dollars, and uncomplicated birth in the US costs at least 30 thousand. Even the US Department of Health considers unacceptable the level of medicine in public hospitals, and the country, with the highest expenditure on medicine, occupies the 37th place in the world for quality of care. Not being able to be treated, Americans buy  more than 80% of painkillers in the world.

Promising to increase the number of the jobs for Americans, paid parental leave, the expansion of trade union rights, etc., the president did not say anything to his people about the kind of resources that will increase their welfare. Meanwhile, according to the forecast of Princeton University professor E.Blinder, in the next 20 years America will lose another 40 million jobs. According to Gallup Institute researcher J. Clifton (4), for the first time in 35 years, the number of firms closing exceeded the number of those that open. At the same time, today in the US there are 26 million companies, but 20 million of them exist only on paper, with no employees, no customers, no sales, no profit. Of the remaining 6 million, 3.8 million companies have an average of four or less employees.

Oil price reduction triggered by the US policy toward Russia, drove America’s oil industry into a crisis. The 25 largest shale companies in the US already cut their expenses for 2015 by a total of $ 12 billion, i.e. 20%. The stock of a whole unit of energy companies in the last 3 months of 2014 fell in price by an average of 40%. In November, the number of permits issued for drilling decreased by almost 40% compared to October.

Inspite of the optimistic forecasts of Obama, the business is runnig away from US. After China’s entry into WTO, the United States began to lose an average of 50 thousand workplaces a month. According to the Economic Policy Institute, 500 thousand workplaces are transferred anually from America to China. As pointed out by a financial analyst D.Willie in the US default has already occurred, and China will soon become a major employer of United States, having a controlling stake in the US Federal Reserve and being the owner of the headquarters of JP Morgan, which includes the largest private gold storage in the world, and the owner of 7 industrial parks. In October 2014, China’s GDP came to first place at purchasing power parity in the world, the United States on this indicator relegated to second place.

Instead of telling Americans about the deplorable state of the American economy and social sphere, of describing truthfully the inevitability of belt-tightening and offering a way out, the US president chose to build the castles in the sky in America.

Enough saying that there is a suggestion to make liquid fuel from solar power. However, taking account of crisis of the oil companies, the solar and wind energy could be a solution. Maybe they can also make an interplanetary chess tournament via Instagram installed, as Obama promises, on Mars for the Americans which will fly there on the new space shuttles made in America.

It seems that the view of a President of The United States so isolated from reality never have reached such enormous amounts.

This article has 1 Comment

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