Former Treasury Official: U.S. Becoming Third World Country
By Jeff West
The following article appeared in the December 3, 2014 issue of The Times Examiner
Dr. Paul Craig Roberts received his B.S. degree from the Georgia Institute of Technology and a Ph.D. from the University of Virginia. He also attended the University of California at Berkeley and Oxford. He was the Assistant Treasury Secretary appointed by President Reagan, and subsequently worked as a consultant to the Departments of Defense and Commerce. He is a prolific writer and scholar, writing for The Wall Street Journal, Business Week and Creator's Syndicate. His many other accomplishments are too numerous to mention. He predicted the collapse of the Soviet Union in 1971, twenty years before it happened.
Recently Dr. Roberts was interviewed by Eric King of King World News. Given his vast accomplishments and the accuracy of his previous observations, we should consider his following comments in which he paints a chilling picture of America's present and future:
Eric: "What do you see happening around the world in terms of the economy, there is so much propaganda, misinformation, and we know Europe is rolling over, Dr. Roberts. We know the United States is still struggling. The unemployment's incredibly high. The labor participation rate really tells the story there. What about what's really happening in the global economy?"
Dr. Roberts: "Well, I don't think there's any recovery. What has happened, Eric, is that capitalism lost the elements that kept it balanced, so that it served everyone, and it's become so unbalanced, with deregulation, with the, the concentration, the size of firms, particularly in the financial arena, and with the jobs off-shoring, that you're left with a system that serves the mega-rich. And so, once you get down that track, it's pretty difficult to reverse it. And what we're seeing really, is the transformation of the United States into a Third World country. Now ten years ago, at a nationally-televised conference in Washington, I predicted that the United States would be a Third World country in twenty years. Now we're certainly on track. I'm not worried about my forecast.
"The latest poverty report, which came out, I think about two weeks ago, it shows that Americans' real family median income has declined to the level of twenty years ago and the jobs that are being created, now if you believe the numbers, these are only lowly-paid part-time domestic service jobs, such as Walmart. Now these jobs cannot support the formation of households! You can't live an independent existence on one of these jobs, you can't get married, you can't qualify for a mortgage, you can't buy a house. To use that figure, they're a substantial part of the market for homes, and yet the employment that's available, it doesn't give them the ability to form a household. And if we look at the labor force participation rate, it has declined quite shockingly, and that is the real reason for the relatively low measured rate of unemployment because the way they measure unemployment officially, at least the measure that's widely reported, U3, it doesn't include discouraged workers who've given up and just simply quit looking for jobs because there are not any jobs for them to find. Now that's the explanation for the downturn in the labor force participation rate and that is, of course, very worrisome.
"But instead of facing that problem, what the government says, and the financial press, they tell us 'Look, this is nothing to worry about, the labor force participation rate has gone down simply because the baby boomers are retiring. Baby boomers, are a large segment of the work force, and they've reached retirement age, and they're retiring, and that's why this labor force participation rate is coming down.'
"Well, I have right here in front of me, Table A9, from the Bureau of Labor Statistics, Selected Employment Indicators and what it shows is exactly the opposite of what the government and financial press tell us. It's not the participation rate of the elderly that's declined. In fact, of last month's claimed 248,000 new jobs, people 55 years old and older accounted for 230,000 of them. In other words, ninety-three percent of the jobs went to the baby boomers! Whereas, those in the critical working years of say, 25 to 54, they lost 10,000 jobs from August. Why is it that it's the retiree age fifty-five and older whose labor force participation rate is rising? In other words, if the baby boomers' rate was falling too, then the reported fall in the rate would be much larger than it is. Well, the reason for the rising labor participation rate of the retired people is they can't live on their Social Security and all their cutback pensions, and so they take the part-time jobs to supplement their retirement incomes. And that's what the government's own figures show. So we have a very curious situation of the economy creates new jobs and they go to the retirees. And the people in the prime working age have no jobs. So this is a very, very dicey situation."
Eric: "Dr. Roberts let me ask you this in closing. How soon 'til things start to come unglued once again, and we are in the next round of this rolling global financial crisis?"
Roberts: "Well, they never took corrective action, they just covered it up by printing money and supporting the balance sheets of the banks. At least in the United States, that's, that's what's happened. The Fed's created roughly $4 trillion to buy instruments from the banks to support the balance sheets, so the crisis is not, it's not gone away. And in Europe, they've had the ability of the private creditors to force the State to make a few big banks whole at the expense of the economies. So, the economic policy of the United States since the 2008 downturn, economic policy has been focused entirely on saving four or five big banks. And there's really been nothing done for the economy and so, there's really no jobs, there's just part-time work for people who want to supplement their retirement income.
"So it's held together longer than I thought. It turned out easy for the Fed and the policymakers in Washington to rig the markets. You never would've thought you'd have zero or even negative interest rates with the Fed printing money hand over fist. Who would've thought that? You wouldn't have thought they would be able to get away for so long, dramatically under-reporting inflation. But they have. Certainly you wouldn't think they could get away with just episode after episode of dumping massive amounts of naked shorts on the gold market. You would've thought that just nobody would tolerate it. But you still have a situation with a lot of people denying it happening. So how long can it go on, Eric? I couldn't, I couldn't tell you. I'm surprised that it hasn't already fallen apart.
"But I think that the change is coming because you know we take great satisfaction, we Americans, in having the world's largest economy, but analysts are now saying that's probably not the case. We are the world's largest economy in nominal terms, but if you adjust the Chinese economy for purchasing power parity, in other words, a trillion dollars goes much further in China than here, the cost of living is so much lower, that already now for a year and a half to two years, China has had the world's largest economy. And if you look at diagrams of the rate of the growth of the U.S. economy, the growth of China, the Chinese is growing at a far more rapid rate and if you look at the share of world GDP, the United States has been consistently declining, and China has been consistently rising for now, let's see, thirty-four years. So every year the United States has lost as a share of the world economy, and every year China has gained. So this is a major transformation in people's minds that the world's largest economy is being displaced, if it hasn't already been displaced. And that will have its own kinds of consequences. You see, with the new Shanghai gold exchange, in China, they don't allow naked shorting, you can't put a futures contract in if you can't cover it with gold. All these kinds of developments are going to produce a situation where the United States is simply superseded."
So based upon Dr. Roberts' view, the future does not look good for America. After Obama's disastrous presidency, it should finally be apparent to Christians that our nation is being punished for our sins. But despite Obama's obvious intent to destroy America, Dr. Roberts documents that the decline started decades ago. So why has the situation gotten this bad? While Dr. Roberts' proof is secular data, there is also a spiritual aspect. Instead of being afraid of God and His wrath, we have long been afraid of doing the right thing. Psalm 111:10 says that "the fear of the LORD is the beginning of wisdom." We overtly lost the fear of God long ago, for example when prayer was taken out of the schools in 1964. So consequently, God has not provided us with wisdom and allowed us to wander far astray for decades, following our own suicidal path.
Furthermore, we are a nation in fear. Regarding his observation that the financial markets are blatantly rigged, which has destroyed America's economy, Dr. Roberts said "You would've thought that just nobody would tolerate it." So why have they? Maybe it is God's punishment. God outlined in Leviticus 26 the blessings and punishments Israel would receive whether or not they obeyed Him. The similarities to America are too numerous to discuss here, however, verses 36-37 describe part of Israel's punishment: "I will send a faintness into their hearts...and the sound of a shaken leaf shall chase them; and they shall flee, as fleeing from a sword; and they shall fall when none pursueth. And they shall fall one upon another, as it were before a sword, when none pursueth: and ye shall have no power to stand before your enemies."
Christians can't stop the financial destruction of our country because we are too afraid to do the right thing, so we just watch it happen. Just like the disobedient Israelites who were so scared by the noise of a quaking leaf that they scattered in fear, we are too afraid to stop America's destruction. Christians are fearfully scattering in every direction, like a hunter flushes a covey of quail and then shoots them individually as they desperately fly to escape. Dr. Roberts said our economy "cannot support the formation of households!" Young people in their prime reproductive years can't find a job, get married and have children. The Christian family unit, the foundation of America, is being destroyed while we fearfully fly away from the enemy as fast as possible.
The apostle Peter miraculously walked on water as long as he kept his eyes on Jesus, but as soon as he stopped and saw the raging sea, he became fearful. When he trusted in himself instead of Jesus, he then realized he would certainly drown. Peter was only saved from certain death when in desperation he called on Jesus to rescue him. America is in the exact same situation; we decided decades ago to trust in ourselves instead of God, and now we are sinking beneath the waves, headed towards our inevitable fate. Though secular economic statistics prove our hopeless situation, many still act like we don't need God or that He would never let us drown. Yet Jesus stood by and watched His own apostle sink until Peter cried out for His help. America is now gasping for air, and it is urgent that we turn back to God and fear Him before our certain destruction. The message of hope is that Jesus DID save Peter, but only through God's strength and mercy can America be saved.