U.S. Economic/Financial News

Detroit Unemployment Estimated at 50%

Dec. 16 (EIRNS)—The Detroit News reported today that, "despite an official unemployment rate of 27 percent, the real jobs problem in Detroit may be affecting half of the working-age population, thousands of whom either can't find a job or are working fewer hours than they want." The News said that "Using a broader definition of unemployment, as much as 45 percent of the labor force has been affected by the downturn. And that doesn't include those who gave up the job search more than a year ago, a number that could exceed 100,000 potential workers alone. Mayor Dave Bing recently raised eyebrows when he said what many already suspected: that the city's official unemployment rate was as believable as Santa Claus. In Washington for a jobs forum earlier this month, he estimated it was 'closer to 50 percent.'"

The paper reported that, although the state of Michigan's official unemployment rate was 12.6% for the fiscal year that ended in September, calculations using the broadest definition place it at 20.9%—66% higher than the official rate. Using the same method, Detroit's official 27% is re-calculated to an estimated 44.8% unemployment rate.

New York City Announces Savage Cuts in Mass Transit

Dec. 17 (EIRNS)—The New York Times and other local media reported in Dec. 17, that the city's Metropolitan Transportation Authority unanimously approved a slate of service cuts on Dec. 16, including eliminating two subway lines from the southern tip of Manhattan to northern and central Queens, reducing service on dozens of bus routes, and phasing out free fares for students—to cope with a $400 million shortfall in state financing that emerged in the past two weeks. Fox News noted that the policy of free or discounted student rides has been in place since 1948, and that ending it could cost half a million students nearly $1,000 per year in transportation fees. "Official numbers show that 417,243 students receive free Metrocards and another 167,912 get half-fare cards.... The new budget would have students start paying half fares in Sept. 2010 and full fares in Sept. 2011." The MTA board will hold public hearings and vote again, hoping that, in the meantime, the city or the state will come to the rescue.

U.S. Looks into Building Smaller Nuclear Reactors

Dec. 16 (EIRNS)—Pre-fabricated modular nuclear reactors of not more than 300 MW power generation capacity have drawn the attention of U.S. lawmakers. Warren Miller, assistant secretary for nuclear energy in the Department of Energy, said small reactors could do better from the standpoint of economics and security than existing large-scale types, and those proposed reactors in South Texas and Maryland. Smaller projects would carry lower investment risks and be more affordable to smaller utilities, which could install one initially, and then link others when power needs increase, Miller said.

The U.S. Senate Energy and Natural Resources Committee is examining two bills that would spur the creation and licensing of the small, modular reactors. One measure would authorize the government to spend $250 million over five years to support the technology. Another bill would create a demonstration program at the Energy Department to test out modular reactor designs. Meanwhile, the Nuclear Regulatory Commission said it is expecting applications for licensing of small, modular reactors as early as next year.

Peterson Commission: We Must Cut Millions of Throats

Dec. 14 (EIRNS)—A private group, representing the speculative global bankers who have destroyed the world economy, called for murderous cuts in medical care and social security, and deep reduction in the income of the population through consumption taxes, as the way to overcome the national debt blowout.

The Peterson-Pew Commission on Budget Reform released a report ("Red Ink Rising") at a Washington event, calling for the cuts to be imposed under guidelines not subject to interference by elected government representatives—a fascist coup d'état.

A leading spokesman for the Commission, former Federal Reserve vice chairman Alice Rivlin, told EIR that swindles such as derivatives by which incomprehensibly vast sums become owed to speculators, must be honored (i.e., paid off, bailed out), cannot be touched—"they are contracts"; while any and all national commitments to the survival of the American population ("entitlements") are "on the table" for elimination.

The Commission was created by billionaire financier Peter G. Peterson, who rose in the London-Wall Street power axis after he wrote the justification for the Nixon Administration to end Franklin Roosevelt's Bretton Woods system, to swamp the world with speculation and destroy our manufacturing. Members of the Commission include many former heads of the Congressional and White House Budget Offices, who presided as "experts" over the transformation of the economy into a globalist casino.

Legislation proposed by the Peterson Commission is now under Congressional consideration, and President Obama has parroted Peterson's lie that Social Security and Medicare overspending are the cause of the dollar/debt crisis.

At the press conference, when Rivlin was asked if ending the present Asian wars might save money, she replied that military spending is trivial compared to the government spending on the elderly, which she said takes money away from the younger generation. Other panelists said the states are spending too much on education, that governors who do not drastically cut services would soon be "out of office."

The spokesmen repeatedly predicted that some catastrophic "triggering event" would come along to scare the population into submitting to the dictated destruction of living standards.