Why U.S. economy stinks – in two graphs

Despite all the media blow-harding about the “recovering” and “recovered” economy, it really doesn’t take an Einstein-level genius to read the two graphs below and realize that the U.S. economy is sick. Nor will it get better soon.
Click graphs to enlarge.

Graph No. 1: Capitalism is dying in America

Business closings vs. startups
The people who create wealth are vanishing.
Jim Clifton, the chairman of Gallup, reports that, for the first time ever, there are more US businesses closing than starting up:

“There continues to be a direct link between market cap (which measures the total value of all outstanding shares) and performance. The US now ranks not first, not second, not third, but 12th among developed nations in terms of business startup activity. Countries such as Hungary, Denmark, Finland, New Zealand, Sweden, Israel and Italy all have higher startup rates than America does.
We are behind in starting new firms per capita, and this is our single most serious economic problem. Yet it seems like a secret. You never see it mentioned in the media, nor hear from a politician that, for the first time in 35 years, American business deaths now outnumber business births. 
The US Census Bureau reports that the total number of new business startups and business closures per year – the birth and death rates of American companies – has crossed for the first time since the measurement began.
I am referring to employer businesses, those with one or more employees, the real engines of economic growth. 400,000 new businesses are being born annually nationwide, while 470,000 per year are dying.

Graph No. 2: The Ever-Expanding Welfare State

Welfare State chart
At the same time as business startups are becoming an endangered species, the number of Americans dependent on the government are ever increasing.
The chart above, from American Enterprise Institute’s Nicholas Eberstadt, shows the alarming increase in just 19 years (1983-2012), in the number of Americans receiving:

  1. Earned (presumably) benefits: Social Security; Medicare.
  2. Outright welfare: Social Security Supplemental Security Income (SSI); Food Stamps; Women, Infants & Children; Medicaid.

In just 19 years, the number of people receiving:

  • Social Security increased by 19.8 million (or 2.6%)
  • Medicare increased by 21.5 million (or 3.7%)
  • SSI increased by 17.2 million (or 5.2%)
  • Food stamps increased by 32.1 million (or 8.2%)
  • Women, Infants & Children increased by 20.3 million (or 6.2%)
  • Medicaid increased by a whopping 65.6 million (or 19.1%)

Source: Zero Hedge

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5 years ago

When you look at the slice we give to the military, even in wartime, it is dwarfed by the entitlements budget. And all the new undocumented immigrants are fully aware of American give-aways.
Our taxes make it attractive to move business out of the US. And there is no protection for American workers. I am competing with people in India who can work for peanuts. They can barely get by on what they are paid. I cannot get by at all on anything like their wages.

5 years ago


5 years ago

One of the huge problems is the miserable growth-choking unConstitutional REGULATIONS. I could not have started my business now; too many additional regulations. That is the case with far too many businesses today, and affects all the new folks who WANT to start a business, have a great idea, have plans in hand — and then are stymied or regulatory-cost-ed out of even starting. Or folding when they should have thrived.

5 years ago

Everything written here, from post to comments, is correct, but it does not include the basic secular cause, deliberate destruction of America and our industry. We must restore well-thought tariffs, shred NAFTA, GATT, and all similar trade agreements just for a start. When workers are denied labor and wages with which families can be raised, the government will have to make up the difference to prevent famine and rioting. That may be proven in the near future, by the way. We are led by people so corrupted by power that they are absolutely corrupted. Read page 405, second paragraph, of… Read more »

5 years ago

Commies only want two classes:
The ruling class and the serfs.
There is no in between.

5 years ago

Dave, you are right, and you can use “Marxists” as well. Na,is fit that description. David Rockefeller lauded Chairman Mao and his communism, put Kissinger in the executive branch with Nixon, and started trade with China to create the NWO by destroying the USA. His wife, Peggy, used to visit Fidel Castro every year, and one time when Castro saw DR in our country, he greeted him like a long-lost friend. The Rockefellers have had their Chase Bank in Red Square from the early days of Communist Russia. Those seeking global power will use any scheme to achieve that goal.


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