Things to watch out for

We are not yet at the point of collapse. There is still a long way to go before the country hits bottom. The United States has a lot more pain to go through. Some things to watch out for will be a reduction in basic services. I wish I had blogged about a few weeks ago when I thought of it. Unfortunately I was beaten to the punch by the reality of the economic situation.   

One basic service that is in the process of being reduced is the United States Postal Service. The government is talking about removing a Saturday delivery. I am actually horrified by this prospect. The spin that is being placed on the cut in services is that it will save the postal service money. A possible reality is that the postal service could collapse.  

Another thing to watch out for is a reduction in garbage collection. When that stops in a city it is time to leave. I fear disease more than I fear criminals. 

Welcome to the New Depression

I am not much for reporting news. I stated this blog not so much to report on current events but to warn of impending disasters. Today we saw the announced layoffs of nearly 72000 people country wide. That was simply the ones that made it into the news. I wonder how many thousands of other people received a layoff notice today. 

It was one thing to predict and plan for a serious economic downturn. It is another thing to watch it unfold. When I started to realize what was happening in 2005 I honestly had no idea that things could ever get as bad as they are. The sad realization is that we are nowhere near bottom. This economic depression has years to play itself out. Nearly everybody on the planet will feel the terrible effects of the New Depression. 

Depression is perhaps not the right word for the situation that the world finds itself in. The very word conjures up the landscape of the 1930s. Today’s economic situation is very different from that of the 1930s. The world was not exactly coupled to our economic well being. The United States was a producer of oil not a consumer. When things got really bad people could go back to the family farm to make a living. Now days we live in steel hives and concrete labyrinths. There is no place for anybody to go except for the streets.

 The only people that are going to have any kind of hope will be those that can hold onto a dwelling. Those people that can ensure their own food security will have a chance. The people to fall into the New Depression first will have very little chance of making it through to the other side. The trick to surviving in today’s world is to outlast your neighbors. In a survival situation that is going to mean doing whatever it takes to make it out alive. 

Tremors in the Golden State

The economy is getting down right scary. It is one thing to predict future events. It is a very different thing to watch them unfold. The truth of the matter is that the economic situation facing the country is much worse than I predicted. The situation is becoming dire for a great many people. The world economy is spiraling out of control at a frightening rate.

Simply focusing on California as an example, I want to point out that the situation here is far worse than in other states. There is a severe drought that is affecting agriculture. Most of the fruits and vegetables that the entire country enjoys are grown in California’s central valley. The fact of the matter is that crop yields will probably be around half of their normal levels.

California’s state legislature has until February 1st to come up with a balanced budget. A balanced budget is a constitutional requirement for California. The state cannot legally function without it. If a budget isn’t passed by the legislature the state actually turns services off. The reason this is so severe is that the state’s welfare system is dependant on funding from the state. If a budget is not passed in February, hundreds of thousands of people will be without state provided income.

Unemployment is a tricky thing to measure. Official estimates for unemployment are hovering around 9%. The unofficial estimates are between 16% and 19%. The state is predicting the official estimate to reach into the double digits within the next few months. Unemployment benefits can carry a person for the better part of a year. Assuming serious layoffs hit the state sometime this year the later part of 2009 and into 2010 are going to be interesting indeed.

California can normally accommodate of about 7% before the state needs to seek federal funding. The feds are not exactly in a place to lend out to the states. It is safe to say that the unemployment system in California will suffer a break down of some sort in 2009. When that happens it is also safe to say that things could go to shit within weeks of funding drying up.

In 2001 the tech bubble nearly caused the end of our civilization. A lot of people cannot wrap their heads around what actually happened when there was an evaporation of wealth on that scale. For the most part people sailed past the down turn like very little had happened. The credit crisis has caused a far worse downturn than what happened in 2001.

State property tax revenue is down. Next year's state income tax revenue should be severly dimished as well. California is facing some of the worst economic conditions ever. 

The entire planet is facing some serious challenges in the years ahead. Several countries are in the midst of panic and even riots. That level of degradation has not reached the United States yet but there is the strong probability that it will. When we do start to slide into that terrible abyss California will be the first state to fall in.