Unemployment Rate Hits 22%

The Second Great Depression?

Jack Nicholson in the movie ‘A Few Good Men’ psychotically believes no one can understand the explosive situation that exists at the military base he commands. Critical information is withheld from public scrutiny because of the delusions held by Nicholson’s movie character. The decision to withhold information leads to tragic consequences, similar to the tragic consequences we are facing in our country because of the ongoing manipulation of Federal government statistics. Without accurate and timely information, intelligent decisions by American citizens concerning economic and financial matters are impossible.

The ‘Headline’ national unemployment number (U-3) is 9.5%. This figure is compiled by the Department of Labor, Bureau of Labor Statistics. Even though all financial media use this unemployment number, this figure is essentially worthless because it excludes millions of job seekers. The fraud begins with the methodology used to compile this number. U-3 does not include short-term discouraged workers and other marginally-attached workers as well as part-time workers who cannot find full-time employment. These categories of unemployed or under-employed workers are included in the broadest Bureau of Labor Statistics unemployment category, U-6. Unfortunately, the U-6 unemployment statistic is not the figure discussed by government representatives and analyzed in the financial media. U-6 is currently 16.5%.

But even using U-6 does not end the fraud. The Bureau of Labor Statistics includes short-term unemployed in U-6, but in 1994 defined out of official existence long-term discouraged workers. Currently there are estimated 6.8 million Americans in this long-term discouraged worker category. These millions of job seekers have statistically vanished from the government totals. Six million, eight-hundred-thousand long-term discouraged workers are not included in any of the BLS unemployment figures. To the Federal government, for unemployment rate computations, over 10% of the national workforce does not exist.

There can be no valid historical comparison between our current economic crisis and previous recessions unless the comparisons use the same (or similar) baseline information. By using U-3 as the “Headline” unemployment number, thereby removing marginally employed, part-time and nearly seven million long-term unemployed from the government unemployment statics, federal officials are perpetrating a fraud on the American public.

There are private sources that still attempt to compile the true unemployment rate using the historical methodology. One is John Williams of Shadow Government Statistics, who generates numerous statistics using the original methodologies (unemployment, GDP, inflation rate, money supply and others). Currently, starting with the Bureau of Labor Statistics U-6 figures, and adding the categories that were inexplicitly removed in 1994, Shadow Government Statistics has estimated that the actual national unemployment rate is nearly 22%.

During the Great Depression, the highest unemployment rate was 25% during 1933. Currently, using the same formula as used before 1994, the unemployment rate stands at nearly 22%. This is what your government believes you can’t handle.

The American public was told in 2009 that the $850,000,000,000.00 Economic Stimulus Package was critical to keep the unemployment rate under 8%. Using any metrics, the Economic Stimulus Package was a massive waste of taxpayer money.

Recently, the American public has been treated to pronouncements from the Council of Economic Advisors that 3 million jobs have been ‘saved or created’. This statement is pure fantasy. There is no way to measure a job ‘saved’. No legitimate economist would make such a claim because there is no way to collect the data necessary to support such a claim. This unproveable employment figure will continue to be used by government officials as long as its use continues to be unchallenged by the mainstream financial media.

I am horrified at what our elected representatives are doing to our country and incredulous that we are being denied the truth by the very government whose sole responsibility is to protect its citizenry. By being denied the truth we are being stripped of one more liberty, and that is the ability to take control of our own lives and our own destinies. We are adults, and yes, we can handle the truth.

Bill Willkomm
8/02/2010

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