....despite what Mr. Larry Summers, a major economic advisor to the President, and Mr. Ben Bernanke, Chairman of the Fed, say.
The Administration has talked about the high rate of unemployment, which is at 9.7% currently. And while it is true that employment lags behind other economic indicators, there's more to the economy than the assertion that "we lost fewer jobs last month".
And, actually, the unemployment rate is higher than this. The official government statistics only include those who have actively looked for work in the last 4 weeks. By the U-6 indicator (apparently because it is the sixth definition of unemployment--it is also the most comprehensive, adding those who would like to work but aren't currently looking for a job, and those who are working part-time but would like to work full-time) the unemployment rate is 16.8%. This rose 0.3 % last month, from 16.5%.
Home foreclosures have leveled off, but business experts say that because many adjustable-rate mortgages will be due for increased rates soon http://www.nytimes.com/2009/09/20/realestate/20mort.html, and also because the program to help homeowners reduce their mortgage payments isn't working very well http://www.google.com/hostednews/ap/article/ALeqM5iIR1Kx1yLRRkEydxgSBNqM-YxN3QD9AQEIEG0 , that home foreclosures are expected to drastically rise soon.
The total number of bank closures this year has reached 94, the highest number since 1992, when 181 banks failed. The FDIC's fund for insuring failed banks has dropped from $45 billion to 10.4 billion dollars. (PS, If your bank has failed, I'd be inclined to get my money out sooner than later.)
And, Americans, as a whole, are now 2 trillion dollars better off than the beginning of the year. However, this a bit misleading. Most of the recovery of wealth is in the stock market, because it has risen since January. The small group of people that own lots of stocks have seen their value rise. Which is good for them, but really doesn't mean much to Americans as a whole.
Also, that the stock markets have risen isn't necessarily good news. Stockholder shares have lost value as companies have had to issue lots more stock shares--and taken money from the federal government--to keep afloat.
http://www.businessweek.com/investor/content/sep2009/pi20090917_056660.htm?chan=rss_topStories_ssi_5
The Fed is touting the rise in home sales and consumer spending, but you need to watch this carefully. Many experts contend that this rise is due to the articial situation the the government has placed on the retail market with the Cash-For-Clunkers program to get people to buy cars,and the first-time home buyer's tax credit to encourage the buying of homes.
Banks are still closing, at an average rate of 10 per month. Construction is up (a little bit), but not in single-home housing.
On top of this, Government debt has soared. Both federal and state governments are increasing their debt to record numbers.
Here's one person's summary of the problems that still exist:
I don't do too well on economics, so please, chime in and help us understand all this! I would just say that I don't trust the federal government claims that all is rosy in the economy.
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