Bob Unruh joined WND in 2006 after nearly three decades with the Associated Press, as well as several Upper Midwest newspapers, where he covered everything from legislative battles and sports to tornadoes and homicidal survivalists. He is also a photographer whose scenic work has been used commercially.More ↓Less ↑
The Dow Jones Industrial Averages today closed above 14,000 for the first time since 2007, within hailing distance of the highest stock market level ever and marking the recovery of some $8 trillion of wealth that was lost during the recession, so is America back on track to prosperity and influence now?
Not quite, says a bond guru who runs a $285 billion bond fund.
In fact, Bill Gross, of the Pimco Total Return Fund, said in an interview with MoneyNews.com, that heavy reliance on credit has put the U.S. economy on a trajectory toward extinction.
“Our current monetary system seems to require perpetual expansion to maintain its existence,” he said in an outlook commentary on the Pimco website. “The advancing entropy in the physical universe may in fact portend a similar decline of ‘energy’ and ‘heat’ within the credit markets.”
But just look at that 14,000 level, many write. As Robert Frank of CNBC wrote, “The stock market has gone from wealth destroyer to the nation’s largest manufacturer of new millionaires and billionaires. The market moves are creating a new virtuous cycle of confidence for the wealthy.”
So which is it?
Let some of the other numbers about the economy give a clue.
CNBC reported that even though the economy reportedly added 157,000 jobs in January, the unemployment rate was up to 7.9 percent – nearly the 8 percent level that plagued the nation throughout Obama’s first term.
But the tragedies hidden behind the White House economic façade are that some 8.5 million Americans have dropped completely out of the work force since Obama took office – about 6,000 for every day of the Obama administration.
In just January, CNS reports, 169,000 dropped off the rolls. The report says that brought the national total for those in the situation of being retired, taken early retirement or just having given up looking for work to 89 million.
Wrote Noel Sheppard at Newsbusters, “Forget all the other numbers. This continued explosion of people not in the labor force should be tremendously concerning as it represents an obstacle for the government to ever balance the budget without drastically raising taxes on those still working.”
Talking about raising taxes, according to data from the Congressional Budget Office, the U.S. is on track to raise its spending to nearly $4.5 trillion a year within five years. That’s up from a revenue stream of about $2.5 trillion a year now, with a spending rate of more than $3.6 trillion.
At the same time, there were reports that gasoline has surged past $4 a gallon, again, hitting families who are maintaining jobs and kids in school especially hard.
MoneyNews said Gross likened the U.S. financial system to a supernova, with its fuel the $85 billion a month the Federal Reserve is printing and pumping into the stock market.
Eventually, the fuel runs out, and there’s a collapse.
He reported corporate, U.S. government, household and personal debt now totals $56 trillion and described it as a monster that needs ever increasing amounts of fuel.
Meanwhile, Obama has closed down his Council on Jobs and Competitiveness, bringing a shocked reaction from members of the GOP.
“This is the wrong time for President Obama to scrap his jobs council and delay his budget,” said House Speaker John Boehner in a prepared statement.
“Month after month we see the same thing: high unemployment and even more debt. More than 12 million Americans are still unemployed, and it’s been that way for far too long. If government spending were what causes economic growth, as the president believes, then the economy today should be booming, and the unemployment rate in American should be plummeting.”
Recent reports also confirmed that the Gross Domestic Product in the U.S. shrank by 0.1 percent during the fourth quarter of 2012, and at the White House today, press secretary Jay Carney blamed it on Republicans who wouldn’t spend money on defense projects as fast as the White House wanted.
“Every time the president meets with his economic advisers to discuss policy proposals and refinements to existing policies, the focus is on job creation and economic growth, and that includes when we have discussions about deficit reduction. As I’ve said many times, and as the president has made clear, deficit reduction is not a goal unto itself; it is a means to, if done right, the desired goal, which is greater growth and greater job creation as part of an overall economic policy,” Carney said.