July 23, 2010

Good Morning:

U.S. Debt/GDP - Must Read, U.S. Unemployment Benefits

U.S. Debt/GDP - Must Read

I consider an article this morning titled 'The article centers on a chart showing total U.S. debt as a % of U.S. GDP over the period from 1870 (yes, 1870, not 1970) to 2009 when according to the Chart it almost has reached a 4 parts Debt to 1 part GDP relationship.I commented on that article as follows:Until I read the article I had failed to recognize that U.S. unemployment benefits extend for 99 weeks.I commented on the article, which to me does not reach any concrete conclusions, as follows:

I see this this article by Mr. Snyder as an important one that, based on the number of comments so far and the reaction to those comments, Seeking Alpha contributors and visitors seem to be reading.

Yesterday in response to another Seeking Alpha article, I commented on what I see as 'U.S. Centric' thinking on the part of many of the authors and commentators on Seeking Alpha and other Internet blogs and websites - and said that in my view the sooner Americans look beyond the U.S. borders and think with a 'world view' the better off America will be and the better will be its future economic prospects. I purposefully used the words 'many of the authors ...' because I recognized that some Americans who write economic related commentary do look at the U.S. economy from a world perspective. Mr. Snyder is clearly one of these and 'good on him' for it.

I recommend that anyone reading Mr. Snyder's commentary today think very hard about what he says. I see his commentary as objective and 'right on the money'. What he says mirrors much of what I say (along with a lot of other things largely related to resources) every day in e-mails I send to Subscribers to a Resource Investment Research website I have been developing for the past 3 years,

I think what the American Federal, State and Local Government needs are meaningful strategies to create long-term jobs through the private sector. I further think that to pay unemployment benefits for 99 weeks is ridiculous in an of itself, let alone extending them - and that all of this simply highlights the sea of underlying unemployment and general economic problems the U.S. currently finds itself adrift in. I simply do not believe the U.S. Federal Government should extend hand-outs that get America deeper into the 'economic quicksand' while promoting ever increasing dependence by the increasingly disillusioned and psychologically harmed unemployed on their Governments.

That said, I believe any Government strategy that caused one or more Governments to be the 'employer of the unemployed' would end up being a complete disaster. However, in an attempt to be constructive and as only one idea, I don't think it would be stupid for the U.S. Federal Government to create and fund incentives for private contractors to hire and train the unemployed to work in permanent low paying jobs on maintaining and improving infrastructure. Obviously people who previously held office jobs might not like picking up a shovel and doing manual labor or other tasks 'they may think beneath them' and 'don't pay them as much as they are worth' - but by any measure for many that should beat sitting at home feeling sorry for oneself.

As I see it, the end-game here is becoming ever increasingly clear. The American 'dream' is rapidly becoming for both the country and many of its residents just that, a dream. Extending unemployment benefits to me is nothing more than a further 'postponement band-aid' - and one that won't stay on the wound because the adhesive on the back of the band-aid won't work.

It will not surprise me if my comment elicits a lot of 'thumbs downs'.

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