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Thread: Well so much for a " Recovery"

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    Banned Eric Stoner's Avatar
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    Default Well so much for a " Recovery"

    As estimates continue to predict a later and shallower recovery ( the consensus is it will START well into 2010 and unemployment will stay above 7 % ) rising oil prices make a real recovery less likely by the day. In fact, it is predicted that oil will hit $85 a barrel by the end of this year and that increased energy costs will dull the effects of all that stimulus money.

    Oil hit $70 a barrel today and is settling around $69 a barrel.

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    Default Re: Well so much for a " Recovery"

    yes but didn't you hear that, by official measure, """ unemployment is down this month """ ?

    If you check out the fine print, you'll find that the amount of new unemployment claims filed this week was lower than experts expected. The facts remain that

    A. unemployment is now at a 23 year record high ... 9 percent by 'official' measure

    B. total unemployment, which includes discouraged workers, underemployed workers, part time workers wishing that they were full time etc. , is approaching 16%



    The rise in the US dollar denominated oil price is actually exceptional, since oil demand traditionally drops immediately after Memorial Day driving season begins. Again if one checks the 'fine print', the price of oil is NOT significantly higher in terms of Euros, Yen etc. Thus in reality it's not a case of oil becoming more 'expensive', it's a case of the US dollar losing purchasing power. This is arguably the direct result of Obama / Geithner 'quantitative easing' policy i.e. printing up brand new US dollars to indirectly purchase freshly printed Treasury bonds which must be sold to provide the necessary cash to finance Obama's stimulus package ( new US treasury bonds which traditional european / japanese / chinese bond buyers are now shying away from ).

    The same loss of US dollar 'purchasing power' is arguably causing US dollar denominated futures price increases for all sorts of global commodities ... from wheat to copper to steel. These commodities are 'inputs' to all sorts of food products, consumer products and durable goods. Thus the crystal ball gazers point out that, with the futures time lag, America is very likely to face not only higher fuel oil / gasoline / energy prices in the near future, but also higher prices for foods and consumer products of all kinds by the end of the year.

    The 'bright' side of a US dollar losing purchasing power is that it makes US exporters more competitive in terms of sales to international customers. The 'dim' side of the US dollar losing purchasing power is that it makes global commodity based domestic products and all imported products more expensive for US customers.

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    Default Re: Well so much for a " Recovery"

    Quote Originally Posted by Melonie View Post
    yes but didn't you hear that, by official measure, """ unemployment is down this month """ ?

    If you check out the fine print, you'll find that the amount of new unemployment claims filed this week was lower than experts expected. The facts remain that

    A. unemployment is now at a 23 year record high ... 9 percent by 'official' measure

    B. total unemployment, which includes discouraged workers, underemployed workers, part time workers wishing that they were full time etc. , is approaching 16%

    http://apnews.myway.com/article/20090605/D98KFDRO0.html

    The rise in the US dollar denominated oil price is actually exceptional, since oil demand traditionally drops immediately after Memorial Day driving season begins. Again if one checks the 'fine print', the price of oil is NOT significantly higher in terms of Euros, Yen etc. Thus in reality it's not a case of oil becoming more 'expensive', it's a case of the US dollar losing purchasing power. This is arguably the direct result of Obama / Geithner 'quantitative easing' policy i.e. printing up brand new US dollars to indirectly purchase freshly printed Treasury bonds which must be sold to provide the necessary cash to finance Obama's stimulus package ( new US treasury bonds which traditional european / japanese / chinese bond buyers are now shying away from ).

    The same loss of US dollar 'purchasing power' is arguably causing US dollar denominated futures price increases for all sorts of global commodities ... from wheat to copper to steel. These commodities are 'inputs' to all sorts of food products, consumer products and durable goods. Thus the crystal ball gazers point out that, with the futures time lag, America is very likely to face not only higher fuel oil / gasoline / energy prices in the near future, but also higher prices for foods and consumer products of all kinds by the end of the year.

    The 'bright' side of a US dollar losing purchasing power is that it makes US exporters more competitive in terms of sales to international customers. The 'dim' side of the US dollar losing purchasing power is that it makes global commodity based domestic products and all imported products more expensive for US customers.
    PRECISELY ! All that monetizing of U.S. debt does have it's downside; doesn't it ?

    Bernanke has admitted that he is aware of the problem ( privately at least ). He reportedly wants to cut back on increasing M 2 and purchases of U.S. Treasuries but he also wants Obama to reappoint him as Chairman of the Fed.

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    Default Re: Well so much for a " Recovery"

    It also reminds me of one of the worst failures of Bush and his nitwit Treasury Secretaries, their dismal failure to defend the Dollar. Geithner is apparently following suit.

    The deep, dark, dirty secret is that Obama WANTS high oil prices. He has admitted it publicly.
    He is oblivious to the bursting of the "Green Bubble".

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    Default Re: Well so much for a " Recovery"

    ^^^ I hear you on the bursting of the 'green bubble'. In fact, I'd love to see an accounting of just how many US / California taxpayer dollars wound up swirling down the porcelain fixture as a result of the recent Pacific Ethanol bankruptcy. But this is beside the point ...

    In terms of a 'Recovery', certain 'positive' changes would need to happen ...

    - unemployment must stop rising ( not merely rising at a slower rate )

    - US consumers must have more after-tax discretionary income available to spend ( which is doubly guaranteed not to happen, between tax increases of all kinds plus zero wage increases, and rising prices for 'necessities' including gasoline, utility bills, food etc.)

    - capital must be available for new business investment ( which is not going to happen if potential future secured corporate bondholders are seeing existing secured corporate bondholders being handed disproportionate losses by gov't bankruptcy intervention)

    - credit must again become available at affordable interest rates for consumers ( which the recently introduced credit card bill of rights essentially guarantees will NOT be the case)

    The tin foil hat crowd will probably tell you that none of the above are likely to happen on their own ... thus there is little chance of any REAL recovery ... until November of 2010 !!!

    However, what isn't really known are the potential positive effects of Obama's stimulus spending. While federal moneys are now starting to flow to states for stimulus projects, it remains to be seen how much of this stimulus money actually winds up increasing the discretionary incomes of American workers.

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    Default Re: Well so much for a " Recovery"

    here's something refreshing ... an economic projection by an ex-politician who knows that his career is over !!!

    'Green Shoots, Red Ink, Black Hole'

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    Default Re: Well so much for a " Recovery"

    We sure have been kicking the can down the road for a while now. I think we are coming up at the road's end.

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    Default Re: Well so much for a " Recovery"

    Thinking for a very short second on the bright side.... At least the American public, if your predictions come true, will be using less credit. Which is a good part of what got us into this mess. And if foreign-made good costs rise, maybe American industry will again start making goods for the US. Which is another part of this mess. We've been buying way too much crap anyhow, IMO.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Default Re: Well so much for a " Recovery"

    And if foreign-made good costs rise, maybe American industry will again start making goods for the US.
    No chance on that possibility ! Between US corporate tax rates, US regulatory compliance costs on businesses, US unionized labor and mandatory benefit costs, and most of all the recent precedent that the US gov't can 'screw' secured capital investors in troubled businesses in order to make a more 'socially acceptable' distribution of a troubled company's remaining assets, no international capital investor with 1/2 a brain would think about investing huge amounts of their 'private' capital in a new US based 'production oriented' business !!!

    The tin foil hat crowd would tell you that if there is any major capital investment to be made in US 'production oriented' industries in the future, it will not come from private sources. Instead, directly or indirectly, it will either come from the US taxpayer, or from the Chinese / Russian gov'ts. Obviously all three gov'ts have separate reasons. The US will do it in order to 'buy votes' from union workers. The Chinese will do it directly because they are sitting on a monstrous pile of US trade surplus dollars that they simply cannot 'cash in' anywhere except within the USA without 'shooting themselves in the foot' re decling US dollar exchange rate impact on the value of their monstrous pile of US dollars. The Russians will do it indirectly, for strategic reasons.

    From past threads I know that you have mentioned an automotive plant in Syracuse NY that was formerly a part of Chrysler but now owned by one Magna Corp. If you do a little digging you'll quickly discover that the financing behind Magna is Russian !!!

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    Default Re: Well so much for a " Recovery"

    The union voted it out of existence and it will close soon. The Magna Corp is Canadian, but I havent followed the money yet.

    We'll have to see how new production businesses fan out. I do know that low capitalized production businesses are still of interest. But businesses that are "too big" are disturbed. Moreso now that gasoline prices are being pushed up again by SPECULATORS.

    You know how reluctant I am to buy any Chinese made goods, but also how difficult it is to find US corp-branded products that are not made by the Chinese near-slave labor.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Default Re: Well so much for a " Recovery"

    Quote Originally Posted by threlayer View Post

    You know how reluctant I am to buy any Chinese made goods, but also how difficult it is to find US corp-branded products that are not made by the Chinese near-slave labor.
    It'll be getting a lot badder before it gets better.

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    Default Re: Well so much for a " Recovery"

    ^^^ the 'tin foil hat' crowd will tell you that the only US made products that you're likely to see in the not too distant future are those which are protected by gov't imposed tariffs / quotas on competing imports, and/or those which are financed / subsidized by the US gov't / taxpayer, and/or those which are offshoots of military / gov't contract production where the gov't contract sale price is able to absorb much of the 'overhead' costs.

    There's also another category of exceptions ... i.e. products which face a commodity / currency price risk during the 3-4-5 week interval between foreign production and US delivery/sale, 'commodity' products where the international shipping cost constitutes a noticeable percentage increase versus the basic 'commodity' price etc.

    The conspiracy theorists are also speculating that the proposed 'carbon tax' may in fact serve as a 'legal' method of imposing de-facto tariffs on all sorts of imported products, which could serve to give US manufacturers some price 'protection' from lower cost foreign competitors. Of course, a necessary consequence is that the prices of ALL products, both domestic and imported, will wind up being significantly higher than is currently the case.

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    Default Re: Well so much for a " Recovery"

    Sorry, I don't follow conspiracy theorists and speculators or soothsayers. I'll need evidence. My own experience shows me that more and more goods sold in the US are being produced by Chinese factories. With its perverted brand of Communism, it'll be interesting to see how monoplies, corruption, worker safety/pay, and pollution are handled or not.
    Last edited by threlayer; 06-15-2009 at 09:15 AM.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Default Re: Well so much for a " Recovery"

    if you want evidence, do some research into US ethanol quotas/tariffs, which allow US ethanol producers to sell product at $3 a gallon while keeping out foreign made product which could be profitably sold at half that price. Also do some research into electrical power system components ( like copper / aluminum wire ), where 20%+ volatility in the price of the basic commodity during the shipping time may wipe out all of the product's potential profit margin. For automobiles, you'll have to wait a couple of years to see how the importation of Chinese made components for US assembly shakes out for a now gov't 'owned' GM.

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    Default Re: Well so much for a " Recovery"

    amazing how main street knowledge (at least viewed as so by europeans, asians and foreiners in general) is called conspiracy theories here in the US. Only in America!

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    Default Re: Well so much for a " Recovery"

    ^^^ that's because foreign media regularly reports on actual US financial matters ... while mainstream US financial media picks and chooses which topics to cover or not to cover, applies gov't sanctioned spin etc.

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    Default Re: Well so much for a " Recovery"

    Generally speaking the US media has gotten lazy and selective and subservient to their big business ownership. Look at all they could have exposed on the Iraq war. In contrast look at how they hounded Clinton about his little affair; it was just pandering to sell readership.

    I use Google news and often read foreign sources about US and world news.
    Last edited by threlayer; 06-16-2009 at 01:45 PM.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Default Re: Well so much for a " Recovery"

    The Spitzer article in Slate, particularly in the tables and the latter paragraphs, is interesting...

    "...We have had a fundamentally misguided industrial policy over the past decade. Yes, industrial policy is a dirty phrase to many, some of whom would argue that we haven't had one, and indeed shouldn't. But the truth is we did have one: to leverage up and guarantee the bets of a financial services sector that has now collapsed and left nothing of value in its wake.

    What would be a better approach? A policy to support those sectors that actually create goods and value. Investment in transformational technology and infrastructure are core national needs...."

    Yes, rather than a number of governmental (tax) policies that promote producton of goods sold by American-owned, but foreign-based companies, to Americans, thus transferring dollars witrh multiplying effects to foreign countries. Or even foreign-owned, but American-based, companies sending profits back overseas. Or contries that do not subscribe to the amount of free trade thaey are enable to have in the US (eg Japan).
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Default Re: Well so much for a " Recovery"

    Great. I am going to pitch a tent off of 95 I guess. How did unemployment go from 9% to over 10% (National Average) in two weeks time???
    XoXo Gia
    Danielle Fishell (the Dish): "If the Super-Star thing doesn't work out, Gia makes a great stripper name"

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    Default Re: Well so much for a " Recovery"

    ^^^ ah the magic of official statistic adjustment factors ... such as the 'birth / death model' , seasonal adjustments, etc. Actually, if you count in discouraged workers plus those receiving unemployment benefits plus those working part time ( but wish they could find full time work) the total percentage exceeds 16% !

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    Default Re: Well so much for a " Recovery"

    Quote Originally Posted by Gia2608 View Post
    Great. I am going to pitch a tent off of 95 I guess. How did unemployment go from 9% to over 10% (National Average) in two weeks time???
    In my opinion, I think it has been that high, if not higher, for quite a while now, but it was presented as lower so as not to panic people. Which mainly everyone has a clear idea anyway..


    MANY MEN WANTED TO LAY ME DOWN, BUT FEW WANTED TO LIFT ME UP

    -Eartha Kitt

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    Default Re: Well so much for a " Recovery"

    The tools that are being used to measure economic health are not sufficient or accurate. This is a wholly new economy that is emerging, and economists track historical trends to make future predictions. A few things that are happening that are currently unaccounted for by the tools available:

    1. Women in the work force. Even looking back into the late 70's early 80's, the percentage of women who were in the work force was considerably smaller than today. The younger women just now entering adulthood rarely consider the option of just staying at home. In 1974 about 24% of the workforce was women as compared to 59.5% today. Therefore, the actual unemployment rate of the population as compared to 1974 is actually lower today when you take all adults into consideration.

    2. Americans are done buying stuff and are ready to buy experiences. If you look at what aspects of the economy are still growing, you'll see it is in areas that involve doing something versus having something.


    • The foodie movement
    • Gardens are bigger than ever, or at least since the invention of the supermarket, and the fact that we have access to more food than ever before a prices that are priced historically low, this points to the desire of Americans to get back in touch with the experience of growing their own foods.
    • Pets and pet shops (who'd of thought the job of "dog trainer" would have been so prolific?)
    • Massage therapy has become a "must have" for many Americans
    • Online/ at home gaming
    • Social networking
    • Body pampering soaps, bath salts, lotions and perfumes are exploding as a business

    I could go on with things like Yoga classes, couples retreats, foreign language clubs, garden tours, and on and on. Live music is back, theater is popular, gambling is a huge draw for many people.

    Yes, stores are going out of business, companies are going bankrupt and there is a glut of consumer products on the shelves and gathering dust at the ports of our nation. This is due to a paradigm shift in the American psyche that found buying, buying and more buying was not at all emotionally satisfying. We are finally figuring out that life is about living and not all about possessing.

    We are seeing the end to the mega consumer society and the beginning of the experiences movement. Bye-bye big box stores, hello more specialized theme-park like experiences. Don't get me wrong, Americans still like things big and expensive. That is how they are still going to live their lives, but instead of bringing home huge quantities of "stuff" they are going to post huge quantities of photos and video of their very fulfilling experiences.


    Promote yourself and earn more money! This is a business that is owned by strippers for strippers. Let's make that money!


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    Default Re: Well so much for a " Recovery"

    While I'm not having a whole lot of luck in locating the link at this 'late' date, after the fact analysis of the past week's unemployment data told a different story.

    In point of fact, the single overwhelming reason why the overall May unemployment claims were not occurring at a rate equal to previous weeks was because Americans in the 55 and over age group returned to work in fairly significant numbers. This of course implies that a fair number of Americans who tried to make 'early retirement' work when their jobs were eliminated / outsourced last year have been unable to make the dollars / numbers work ... thus have decided to take seasonal jobs or return to working at full time jobs with far lower pay rates. This of course is very bad news for college students / new college graduates, who now find themselves competing against mature professionals with 30 years of experience for $40k-$50k per year 'entry' level positions or seasonal positions. In fact, the timing of this sudden shift in 55+ employment levels cannot be interpreted in any other way besides a recognition by the 55+ recent 'early retirees' that they must submit resume's or accept job offers before this year's college graduates did.

    As to the foodie movement, one needs to sort out the actual details. Yes Americans have access to more foods at historically lower prices. But the reason this is so is that perishable and processed foods are both being imported into the USA from lower cost foreign countries in historically high volumes. The flip side is that, for example, American large scale vegetable farms that formerly employed large numbers of minimum wage workers have ceased production of vegetables ( and ceased employing minimum wage farm workers) because today's mandated labor + benefits costs, today's environmental + regulatory compliance costs etc. render American vegetable farms non-competitive versus similar farms in Mexico / Asia.

    From the standpoint of 'commodity' foods, however, prices are up significantly from last year. This may not be obvious to US consumers yet, but the world's food processors are already adjusting both retail prices upward and package / portion sizes downward in response to their rising ingredient costs and falling profit margins. Check out virtually any 'commodity' food price at ! With the exception of chicken prices, virtually every other 'commodity' food price is WAY up over the past couple of months.

    Yes the US 'organic' food business is doing well ... but this is strictly due to the large price premiums 'organic' food products are able to command. As such, 'organic' foods comprise less than 5% of total US food consumption, and are a de-facto luxury enjoyed primarily by the upper middle class and the rich. Same is true of 'designer' soaps, lotions, bath products. Same is true of 'massage therapy', upscale pet care etc. Arguably, while the rich will always be able to afford such non-essential de-facto luxuries, as taxes increase, as the performance of investments decline, as home prices continue to decline, and as business profits decline there will be a large number of middle class consumers of such products and services who will choose ( or be forced ) to economize their household budgets ... with these de-facto 'luxuries' being one of the first items to be cut.

    West coast media has also published a few articles which profess the 'virtues' of the experiences movement you refer to. In the final analysis, all of these experiences are made possible because newly unemployed people have free time on their hands, have weekly unemployment checks funded by other taxpayers to cover their living expenses ( for 39-52 weeks ), have a fair amount of 'severance pay' to supplement those expenses etc. However, if the economy has not performed a massive turnaround within the next year ( and many speculate that this cannot and will not happen ) those now participating in the experiences movement are likely to be facing an 'experience' of an entirely different nature when their savings accounts are emptied and the unemployment checks stop arriving !!!

    !
    Last edited by Melonie; 06-21-2009 at 11:52 PM.

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    Default Re: Well so much for a " Recovery"

    A few points: first, unemployment checks have been paid for out of those former employees' salary+benefits accounts; it doesn't come from anywhere else. And it is not welfare, but insurance for which premiums have already been paid (until the reserves run out).

    Second, I haven't seen any (seasonally adjsted) food prices come down ("more foods at historically lower prices") in Years. Now that the growing season is coming along, there will be fewer imported vegetables. That happens every year and that's when prices do come down, seasonally adjusted. American producers need a constant supply of perishables; so they have been either importing or growing foods in other locations for decades. Though this business may be growing, along with the population, the essentials for this industry are well-established.

    There have always been been, even in times of high employment, workers who were unemployed, under-employed, unemployed beyond the counting time, and discouraged from seeking employment. So even when 'employment' is reported as below the magic 5%, it is actually considerably higher, probably approaching 10%. However, if you account for under-the-table 'employment', all those figures are considerably lower; there are a LOT of people out there making money and not reporting it, most of whom are not reporting unemployment and are otherwise accounted for.

    So all those numbers are only relative to other numbers that are commonly reported. That is NOT what is actually out there.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Default Re: Well so much for a " Recovery"

    Quote Originally Posted by threlayer View Post
    A few points: first, unemployment checks have been paid for out of those former employees' salary+benefits accounts; it doesn't come from anywhere else. And it is not welfare, but insurance for which premiums have already been paid (until the reserves run out).

    Second, I haven't seen any (seasonally adjsted) food prices come down ("more foods at historically lower prices") in Years. Now that the growing season is coming along, there will be fewer imported vegetables. That happens every year and that's when prices do come down, seasonally adjusted. American producers need a constant supply of perishables; so they have been either importing or growing foods in other locations for decades. Though this business may be growing, along with the population, the essentials for this industry are well-established.

    There have always been been, even in times of high employment, workers who were unemployed, under-employed, unemployed beyond the counting time, and discouraged from seeking employment. So even when 'employment' is reported as below the magic 5%, it is actually considerably higher, probably approaching 10%. However, if you account for under-the-table 'employment', all those figures are considerably lower; there are a LOT of people out there making money and not reporting it, most of whom are not reporting unemployment and are otherwise accounted for.

    So all those numbers are only relative to other numbers that are commonly reported. That is NOT what is actually out there.
    That is how Unemployment Insurance is SUPPOSED to work. In fact, many state funds are already bankrupt and are only able to continue paying benefits by borrowing from the Feds.

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