National Emergency: America’s Economic Collapse

Despite what you hear from the government and the mainstream media, America’s in a state of economic collapse—and it’s been getting worse since the 1970s.

How do I know this? Because I spent my time learning the hard data, as opposed to memorizing (useless) economic theories.

Not convinced? You will be.

Here are the facts:

1. GDP Per Capita Growth’s Slowing

Although Gross Domestic Product, or GDP growth has been slowing since the 1970s, it doesn’t look that bad—until you factor in population changes.

America’s population is growing fast (because of immigration, not natural births), and this dilutes our GDP growth per capita.

For example, if the population grew by 2%, then the economy would have to grow by 2% to keep pace (otherwise we’ll have smaller shares). More wealth per person means a higher standard of living, and vice versa.

GDP growth per person has been 0.147% since 2012—it was 0.34% during the Great Depression. That’s twice as bad.

2. Income Inequality Is Rising

America’s growing more and more unequal: most societies do before their inevitable collapse. Just look at the decadence and poverty in France before their revolution.

The Gini Coefficient measures inequality (in this case, regarding income). The higher it is, the more inequality exists. The lower, the more equal.

America’s GC has been growing since 1973, and is now roughly where it was during the 1920s (right before the Great Depression). That’s high. Really high.

It puts us on the level of places like Russia and Brazil—not exactly model countries.

3. The Middle Class Is Shrinking

Spending on “needs” (food, clothing, shelter) shrunk, while spending on “wants” increased as a proportion of the American household’s income between 1934 and 1985. This meant real economic growth took place.

In the late 1970s, incomes began to diverge (the income gains went to the 10%). How do we know this?

Just look at the separation between the mean and the median averages. While the mean remained stable (boosted by income gains at the top), the median has declined (since this number is not distorted by the super-rich).

Therefore, most Americans have actually seen a decrease in relative prosperity over the last 40 years—yes their incomes have risen, but this rise has been largely mitigated by dramatic increases in fixed costs (like rent).

4. The Rich Get Richer

The divergence from the above chart is plotted in the graph below.

This shows how the working and middle class has been let down by the political elites.

5. Our Purchasing Power’s Declining

The impact of this income disparity can measured in tangible goods, in this case, McDonald’s Hamburgers, bottles of Pepsi, and Hershey’s chocolate bars.

In 1985, a year’s worth of work at the median wage bought you way more than in 2014—if that’s not the face of economic collapse, I don’t know what is.



6. Real Wages Haven’t Grown Since 1973

Most American’s haven’t seen their incomes rise in 4 decades.

Real earnings (income accounting for inflation) peaked in 1973, and it’s been downhill ever since. This graph shows the real (inflation-adjusted) vs nominal (the number on the bill) wages for wage-earning Americans.

Why? Offshoring. Read more about that here.

7. Americans Are Working More For Less

Even though most Americans aren’t making more money, they’re working harder.

This graph shows how although American worker’s productivity is increasing (they’re doing more work per hour, because of better technology etc.), they’re not being paid for it. Again, this is largely due to offshoring.

The gap began to appear in the 1980s—before that wages rose in tandem with productivity.

8. America’s Lost 7 Million Manufacturing Jobs

One of the reasons incomes have been decreasing is because America’s shed many of its middle class jobs, leaving just those at the top (the CEOs and designers) and those at the bottom (waiters, burger-flippers) in America—we lost our manufacturing jobs to China and Mexico.

Since 1979, we’ve lost over 7 million, good-paying, manufacturing jobs.

The same pattern of industrial decline happened before Great Britain’s economic decline and collapse in the late 19th century.

9. The Real Unemployment Rate Is 13.3%

This chart shows how America’s population is broken down—most of the country doesn’t work.

In fact, only 148 million Americans, out of over 320 million actually have jobs.

True, not all of them want jobs, but 23 million of them do—the government lied when it said unemployment was low.

America’s Economy Is Collapsing: What Now?

We have big problems.

Thankfully, so did other countries before us—and they solved them.

As is so often the case, history can provide us with a great deal of guidance, if only we’re willing to listen.

Here’s what you need to do right now

Learn how economic growth really happens, you’d be surprised. Learn America’s economic history—they don’t want you to know it for a damn good reason.

Select Sources:

Bureau of Labor Statistics. “Civilian labor force participation rate by age, gender, race, and ethnicity.” Accessed June 5, 2016. https://www.bls.gov/emp/ep_table_303.htm

Chao, Elaine L. 100 Years of US Consumer Spending, Data for the Nation. New York: US Department of Labor, 2006.

Federal Reserve Bank of St. Louis, “All Employees, Manufacturing.” Accessed Nov 20, 2016. https://fred.stlouisfed.org/series/MANEMP

Hipple, Steven F. “People Who Are Not in the Labor Force: Why Aren’t they Working?” Bureau of Labor Statistics: Beyond the Numbers (4), 2015.

Maddison, Angus. The World Economy: Historical Statistics. Paris, OECD Publishing, 2003.

Olver, Lynne. “The Food Timeline.” Accessed July 15, 2016. https://www.foodtimeline.org/foodfaq5.html#

Townhall.com “The Major Trends in US Income Inequality Since 1947.” Accessed June 10, 2016. https://finance.townhall.com/columnists/politicalcalculations/2013/12/05/the-major-trends-in-us-income-inequality-since-1947-n1757626/page/full