44 facts about the death of middle class that every American should know

What is America going to look like when the middle class is dead? Once upon a time, the United States has the largest and most vibrant middle class in the history of the world. When I was growing up, it seemed like almost everyone was "middle class" and it was very rare to hear of someone that was out of work. Of course life wasn't perfect, but most families owned a home, most families had more than one vehicle, and most families could afford nice vacations and save for retirement at the same time. Sadly, things have dramatically changed in America since that time. There just aren't as many "middle class jobs" as there used to be. In fact, just six years ago there were about six million more full-time jobs in our economy than there are right now. Those jobs are being replaced by part-time jobs and temp jobs. The number one employer in America today is Wal-Mart and the number two employer in America today is a temp agency (Kelly Services). But you can't support a family on those kinds of jobs. We live at a time when incomes are going down but the cost of living just keeps going up. As a result, the middle class in America is being absolutely shredded and the ranks of the poor are steadily growing. The following are 44 facts about the death of the middle class that every American should know: 

1. According to one recent survey, "four out of five U.S. adults struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives". 

2. The growth rate of real disposable personal income is the lowest that it has been in decades. 

3. Median household income (adjusted for inflation) has fallen by 7.8 percent since the year 2000. 

4. According to the U.S. Census Bureau, the middle class is taking home a smaller share of the overall income pie than has ever been recorded before. 

5. The home ownership rate in the United States is the lowest that it has been in 18 years. 

6. It is more expensive to rent a home in America than ever before. In fact, median asking rent for vacant rental units just hit a brand new all-time record high. 

7. According to one recent survey, 76 percent of all Americans are living paycheck to paycheck. 

8. The U.S. economy actually lost 240,000 full-time jobs last month, and the number of full-time workers in the United States is now about 6 million below the old record that was set back in 2007. 

9. The largest employer in the United States right now is Wal-Mart. The second largest employer in the United States right now is a temp agency(Kelly Services). 

10. One out of every ten jobs in the United States is now filled through a temp agency. 

11. According to the Social Security Administration, 40 percent of all workers in the United States make less than $20,000 a year. 

12. The ratio of wages and salaries to GDP is near an all-time record low. 

13. The U.S. economy continues to trade good paying jobs for low paying jobs. 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs. 

14. Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs. 

15. At this point, one out of every four American workers has a job that pays $10 an hour or less. 

16. According to one study, between 1969 and 2009 the median wages earned by American men between the ages of 30 and 50 declined by 27 percent after you account for inflation. 

17. In the year 2000, about 17 million Americans were employed in manufacturing. Today, only about 12 million Americans are employed in manufacturing. 

18. The United States has lost more than 56,000 manufacturing facilities since 2001. 

19. The average number of hours worked per employed person per year has fallen by about 100 since the year 2000. 

20. Back in the year 2000, more than 64 percent of all working age Americans had a job. Today, only 58.7 percent of all working age Americans have a job. 

21. When you total up all working age Americans that do not have a job, it comes to more than 100 million. 

22. The average duration of unemployment in the United States isnearly three times as long as it was back in the year 2000. 

23. The percentage of Americans that are self-employed has steadily declined over the past decade and is now at an all-time low. 

24. Right now there are 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001. 

25. In 1989, the debt to income ratio of the average American family was about 58 percent. Today it is up to 154 percent. 

26. Total U.S. household debt grew from just 1.4 trillion dollars in 1980 to a whopping 13.7 trillion dollars in 2007. This played a huge role in the financial crisis of 2008, and the problem still has not been solved. 

27. The total amount of student loan debt in the United States recently surpassed the one trillion dollar mark. 

28. Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago. 

29. Back in the year 2000, the mortgage delinquency rate was about 2 percent. Today, it is nearly 10 percent. 

30. Consumer debt in the United States has risen by a whopping 1700% since 1971, and 46% of all Americans carry a credit card balance from month to month. 

31. In 1999, 64.1 percent of all Americans were covered by employment-based health insurance. Today, only 55.1 percent are covered by employment-based health insurance. 

32. One study discovered that approximately 41 percent of all working age Americans either have medical bill problems or are currently paying off medical debt, and according to a report published in The American Journal of Medicine medical bills are a major factor in more than 60 percent of all personal bankruptcies in the United States. 

33. Each year, the average American must work 107 days just to make enough money to pay local, state and federal taxes. 

34. Today, approximately 46.2 million Americans are living in poverty. 

35. The number of Americans living in poverty has increased by more than 15 million since the year 2000. 

36. Families that have a head of household under the age of 30 have a poverty rate of 37 percent. 

37. At this point, approximately 25 million American adults are living with their parents. 

38. In the year 2000, there were only 17 million Americans on food stamps. Today, there are more than 47 million Americans on food stamps. 

39. Back in the 1970s, about one out of every 50 Americans was on food stamps. Today, about one out of every 6.5 Americans is on food stamps. 

40. Right now, the number of Americans on food stamps exceeds the entire population of the nation of Spain. 

41. According to one calculation, the number of Americans on food stamps now exceeds the combined populations of "Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming." 

42. At this point, more than a million public school students in the United States are homeless. This is the first time that has ever happened in our history. That number has risen by 57 percent since the 2006-2007 school year. 

43. According to U.S. Census data, 57 percent of all American children live in a home that is either considered to be "poor" or "low income". 

44. In the year 2000, the ratio of social welfare benefits to salaries and wages was approximately 21 percent. Today, the ratio of social welfare benefits to salaries and wages is approximately 35 percent. 

And not only is the middle class being systematically destroyed right now, we are also destroying the bright economic future that our children and our grandchildren were supposed to have by accumulating gigantic mountains of debt in their names. The following is from a recent articleby Bill Bonner:

Today, the U.S. lumbers into the future with total debt equal to about 350% of GDP. In Britain and Japan, the total is over 500%. Debt, remember, is the homage that the future pays to the past. It has to be carried, serviced... and paid. It has to be reckoned with... one way or another.

And the cost of carrying debt is going up! Over the last few weeks, interest rates have moved up by about 15% - an astounding increase for the sluggish debt market. How long will it be before long-term borrowing rates are back to "normal"?

At 5% interest, a debt that measures 3.5 times your revenue will cost about one-sixth of your income. Before taxes. After tax, you will have to work about one day a week to keep up with it (to say nothing of paying it off!).

That's a heavy burden. It is especially disagreeable when someone else ran up the debt. Then you are a debt slave. That is the situation of young people today. They must face their parents' debt. Even serfs in the Dark Ages had it better. They had to work only one day out of 10 for their lords and masters.

We were handed the keys to the greatest economic machine in the history of the planet and we wrecked it. 

As young people realize that their futures have been destroyed, many of them are going to totally lose hope and give in to despair. 

And desperate people do desperate things. As our economy continues to crumble, we are going to see crime greatly increase as people do what they feel they need to do in order to survive. In fact, we are already starting to see this happen. Just this week, CNBC reported on the raging epidemic of copper theft that we are seeing all over the nation right now:

Copper is such a hot commodity that thieves are going after the metal anywhere they can find it: an electrical power station in Wichita, Kan., or half a dozen middle-class homes in Morris Township, N.J.Even on a Utah highway construction site, crooks managed to abscond with six miles of copper wire.

Those are just a handful of recent targets across the U.S. in the $1 billion business of copper theft.

"There's no question the theft has gotten much, much worse," said Mike Adelizzi, president of theAmerican Supply Association, a nonprofit group representing distributors and suppliers in the plumbing, heating, cooling and industrial pipe industries.

The United States once had the greatest middle class in the history of the world, but now it is dying. 

This is causing a tremendous amount of anger and frustration to build in this nation, and when the next major wave of the economic collapse strikes, a lot of that anger and frustration will likely be unleashed. 

The American people don't understand that these problems have taken decades to develop. They just want someone to fix things. They just want things to go back to the way that they used to be. 

Unfortunately, the great economic storm that is coming is not going to be averted. 

Get ready while you still can. Time is running out.

http://www.sott.net/article/264559-44-facts-about-the-death-of-middle-class-that-every-American-should-know

The Most Important Number In The Entire U.S. Economy

Submitted by Michael Snyder of The Economic Collapse blog [18],

There is one vitally important number that everyone needs to be watching right now, and it doesn't have anything to do with unemployment, inflation or housing.  If this number gets too high, it will collapse the entire U.S. financial system.  The number that I am talking about is the yield on 10 year U.S. Treasuries.

When that number goes up, long-term interest rates all across the financial system start increasing.  When long-term interest rates rise, it becomes more expensive for the federal government to borrow money, it becomes more expensive for state and local governments to borrow money, existing bonds lose value and bond investors lose a lot of money, mortgage rates go up and monthly payments on new mortgages rise, and interest rates throughout the entire economy go up and this causes economic activity to slow down. 

On top of everything else, there are more than 440 trillion dollars worth of interest rate derivatives sitting out there, and rapidly rising interest rates could cause that gigantic time bomb to go off and implode our entire financial system.  We are living in the midst of the greatest debt bubble in the history of the world [19], and the only way that the game can continue is for interest rates to stay super low.  Unfortunately, the yield on 10 year U.S. Treasuries has started to rise, and many experts are projecting that it is going to continue to rise.

On August 2nd of last year, the yield on 10 year U.S. Treasuries was just 1.48%, and our entire debt-based economy was basking in the glow of ultra-low interest rates.  But now things are rapidly changing.  On Wednesday, the yield on 10 year U.S. Treasuries hit 2.70% before falling back to 2.58% on "good news" from the Federal Reserve.

Historically speaking, rates are still super low, but what is alarming is that it looks like we hit a "bottom" last year and that interest rates are only going to go up from here.  In fact, according to CNBC [20] many experts believe that we will soon be pushing up toward the 3 percent mark...

Round numbers like 1,700 on the S&P 500 are well and good, but savvy traders have their minds on another integer: 2.75 percent

That was the high for the 10-year yield this year, and traders say yields are bound to go back to that level. The one overhanging question is how stocks will react when they see that number.

"If we start to push up to new highs on the 10-year yield so that's the 2.75 level—I think you'd probably see a bit of anxiety creep back into the marketplace," Bank of America Merrill Lynch's head of global technical strategy, MacNeil Curry, told "Futures Now" on Tuesday.

And Curry sees yields getting back to that level in the short term, and then some. "In the next couple of weeks to two months or so I think we've got a push coming up to the 2.85, 2.95 zone," he said.

This rise in interest rates has been expected for a very long time - it is just that nobody knew exactly when it would happen.  Now that it has begun, nobody is quite sure how high interest rates will eventually go.  For some very interesting technical analysis, I encourage everyone to check out an article by Peter Brandt that you can find right here [21].

And all of this is very bad news for stocks.  The chart below was created by Chartist Friend from Pittsburgh [22], and it shows that stock prices have generally risen as the yield on 10 year U.S. Treasuries has steadily declined over the past 30 years...

 [23]

When interest rates go down, that spurs economic activity, and that is good for stock prices.

So when interest rates start going up rapidly, that is not a good thing for the stock market at all.

The Federal Reserve [24] has tried to keep long-term interest rates down by wildly printing money and buying bonds, and even the suggestion that the Fed may eventually "taper" quantitative easing caused the yield on 10 year U.S. Treasuries to absolutely soar a few weeks ago.

So the Fed has backed off on the "taper" talk for now, but what happens if the yield on 10 year U.S. Treasuries continues to rise even with the wild money printing that the Fed has been doing?

At that point, the Fed would begin to totally lose control over the situation.  And if that happens, Bill Fleckenstein told King World News [25] the other day that he believes that we could see the stock market suddenly plunge by 25 percent...

Let’s say Ben (Bernanke) comes out tomorrow and says, ‘We are not going to taper.’ But let’s just say the bond market trades down anyway, and the next thing you know we go through the recent highs and a month from now the 10-Year is at 3%. And people start to realize they are not even tapering and the bond market is backed up...

They will say, ‘Why is this happening?’ Then they may realize the bond market is discounting the inflation we already have.

At some point the bond markets are going to say, ‘We are not comfortable with these policies.’ Obviously you can’t print money forever or no emerging country would ever have gone broke. So the bond market starts to back up and the economy gets worse than it is now because rates are rising. So the Fed says, ‘We can’t have this,’ and they decide to print more (money) and the bond market backs up (even more).

All of the sudden it becomes clear that money printing not only isn’t the solution, but it’s the problem. Well, with rates going from where they are to 3%+ on the 10-Year, one of these days the S&P futures are going to get destroyed. And if the computers ever get loose on the downside the market could break 25% in three days.

And as I have written about previously [26], we have seen a huge spike in margin debt in recent months, and this could make it even easier for a stock market collapse to happen.  A recent note from Deutsche Bank explained precisely why margin debt is so dangerous [27]...

Margin debt can be described as a tool used by stock speculators to borrow money from brokerages to buy more stock than they could otherwise afford on their own. These loans are collateralized by stock holdings, so when the market goes south, investors are either required to inject more cash/assets or become forced to sell immediately to pay off their loans – sometimes leading to mass pullouts or crashes.

But of much greater concern than a stock market crash is the 441 trillion dollar interest rate derivatives bubble [28] that could implode if interest rates continue to rise rapidly.

Deutsche Bank is the largest bank in Europe, and at this point they have 55.6 trillion euros [29] of total exposure to derivatives.

But the GDP of the entire nation of Germany is only about 2.7 trillion euros for a whole year.

We are facing a similar situation in the United States.  Our GDP for 2013 will be somewhere between 15 and 16 trillion dollars, but many of our big banks have exposure to derivatives that absolutely dwarfs our GDP.  The following numbers come from one of my previous articles entitled "The Coming Derivatives Panic That Will Destroy Global Financial Markets[30]"...

JPMorgan Chase
Total Assets: $1,812,837,000,000 (just over 1.8 trillion dollars)
Total Exposure To Derivatives: $69,238,349,000,000 (more than 69 trillion dollars)

Citibank
Total Assets: $1,347,841,000,000 (a bit more than 1.3 trillion dollars)
Total Exposure To Derivatives: $52,150,970,000,000 (more than 52 trillion dollars)

Bank Of America
Total Assets: $1,445,093,000,000 (a bit more than 1.4 trillion dollars)
Total Exposure To Derivatives: $44,405,372,000,000 (more than 44 trillion dollars)

Goldman Sachs
Total Assets: $114,693,000,000 (a bit more than 114 billion dollars - yes, you read that correctly)
Total Exposure To Derivatives: $41,580,395,000,000 (more than 41 trillion dollars)

That means that the total exposure that Goldman Sachs has to derivatives contracts is more than 362 times greater than their total assets.

And remember, the biggest chunk of those derivatives contracts is made up of interest rate derivatives.

Just imagine what would happen if a life insurance company wrote millions upon millions of life insurance contracts and then everyone suddenly died.

What would happen to that life insurance company?

It would go completely broke of course.

Well, that is what our major banks are facing today.

They have written trillions upon trillions of dollars worth of interest rate derivatives contracts, and they are betting that interest rates will not go up rapidly.

But what if they do?

And the truth is that interest rates have a whole lot of room to go up.  The chart below shows how the yield on 10 year U.S. Treasuries has moved over the past couple of decades...

 [31]

As you can see, the yield on 10 year U.S. Treasuries was hovering around the 6 percent mark back in the year 2000.

Back in 1990, the yield on 10 year U.S. Treasuries hovered between 8 and 9 percent.

If we return to "normal" levels, our financial system will implode.  There is no way that our debt-addicted system would be able to handle it.

So watch the yield on 10 year U.S. Treasuries very carefully.  It is the most important number in the entire U.S. economy.

If that number gets too high, the game is over.

http://www.zerohedge.com/print/477117

NSA Spying Directly Harms Internet Companies, Silicon Valley, California … And the Entire U.S. Economy

Mass surveillance by the NSA may directly harm the bottom of line of Internet companies, Silicon Valley, California … and the entire national economy.

Money News points out:

The company whose shares you own may be lying to you — while Uncle Sam looks the other way.

Let’s step through this. I think you will see the problem.

Fact 1: U.S. financial markets are the envy of the world because we have fair disclosure requirements, accounting standards and impartial courts. This is the foundation of shareholder value. The company may lose money, but they at least told you the truth.

Fact 2: We now know multiple public companies, including Microsoft (MSFT), Google (GOOG), Facebook (FB) and other, gave their user information to NSA. Forget the privacy implications for a minute. Assume for the sake of argument that everything complies with U.S. law. Even if true, the businesses may still be at risk.

Fact 3: All these companies operate globally. They get revenue from China, Japan, Russia, Germany, France and everywhere else. Did those governments consent to have their citizens monitored by the NSA? I think we can safely say no.

Politicians in Europe are especially outraged. Citizens are angry with the United States and losing faith in American brand names. Foreign companies are already using their non-American status as a competitive advantage. Some plan to redesign networks specifically to bypass U.S. companies.

By yielding to the NSA, U.S. companies likely broke laws elsewhere. They could face penalties and lose significant revenue. Right or wrong, their decisions could well have damaged the business.

Securities lawyers call this “materially adverse information” and companies are required to disclose it. But they are not. Only chief executives and a handful of technical people know when companies cooperate with the NSA. If the CEO can’t even tell his own board members he has placed the company at risk, you can bet it won’t be in the annual report.

The government also gives some executives immunity documents, according to Bloomberg. Immunity is unnecessary unless someone thinks they are breaking the law. So apparently, the regulators who ostensibly protect the public are actively helping the violators.

This is a new and different investment landscape. Public companies are hiding important facts that place their investors at risk. If you somehow find out, you will have no recourse because regulators gave the offender a “get out of jail free” card. The regulatory structure that theoretically protects you knowingly facilitates deception that may hurt you, and then silences any

witnesses.

This strikes to the very heart of the U.S. financial system. Our markets have lost any legitimate claim to “full and fair disclosure.” Every prospectus, quarterly report and news release now includes an unwritten NSA asterisk. Whenever a CEO speaks, we must assume his fingers are crossed.

***

Every individual investor or money manager now has a new risk factor to consider. Every disclosure by every company is in doubt. The rule of law that gave us the most-trusted markets in the world may be just an illusion.

In a subsequent article, Money News wrote:

Executives at publicly traded companies are lying to shareholders and probably their own boards of directors. They are exposing your investments to real, material, hard-dollar losses and not telling you.

The government that allegedly protects you, Mr. Small Investor, knows all this and actually encourages more of it.

Who lies? Ah, there’s the problem. We don’t know. Some people high in the government know. The CEOs themselves and a few of their tech people know. You and I don’t get to know. We just provide the money.

Since we don’t know which CEOs are government-approved liars, the prudent course is to assume all CEOs are government-approved liars. We can no longer give anyone the benefit of the doubt.

If you are a money manager with a fiduciary responsibility to your investors, you are hereby on notice. A CEO may sign those Securities and Exchange Commission filings where you get corporate information with his fingers crossed. Your clients pay you to know the facts and make good decisions. You’re losing that ability.

For example, consider a certain U.S. telecommunications giant with worldwide operations. It connects American businesses with customers everywhere. Fast-growing emerging markets like Brazil are very important to its future growth.

Thanks to data-sharing agreements with various phone providers in Brazil, this company has deep access to local phone calls. One day someone from NSA calls up the CEO and asks to tap into that stream. He says OK, tells his engineers to do it and moves on.

A few years later, Edward Snowden informs Brazilian media that U.S. intelligence is capturing these data. They tell the Brazilian public. It is not happy. Nor are its politicians, who are already on edge for entirely unrelated reasons.

What would you say are this company’s prospects for future business in Brazil? Your choices are “slim” and “none.” They won’t be the only ones hurt. If the U.S. government won’t identify which American company cheated its Brazilian partners, Brazil will just blame all of them. The company can kiss those growth plans good-bye.

This isn’t a fantasy. It is happening right now. The legality of cooperating with the NSA within the United States is irrelevant. Immunity letters in the United States do not protect the company from liability elsewhere.

***

Shouldn’t shareholders get to know when their company’s CEO takes these risks? Shouldn’t the directors who hire the CEO have a say in the matter? Yes, they should. We now know that they don’t.

The trust that forms the bedrock under U.S. financial markets is crumbling. [A theme we frequently explore. ] If we cannot believe CEOs when they swear to tell the truth, if companies can hide material risks, if boards cannot know what the executives they hire are actually doing, any pretense of “fair markets” is gone.

When nothing is private, people and businesses soon cease to trust each other. Without trust, modern financial markets cannot function properly.

If U.S. disclosure standards are no better than those in the third world, then every domestic stock is overvalued. Our “rule of law” premium is gone.

This means a change for stock valuations — and it won’t be bullish.

CNN reports:

Officials throughout Europe, most notably French President Francois Hollande, said that NSA spying threatens trade talks.

***

For the Internet companies named in reports on NSA surveillance, their bottom line is at risk because European markets are crucial for them. It is too early assess the impact on them, but the stakes are clearly huge. For example, Facebook has about 261 million active monthly European users, compared with about 195 million in the U.S. and Canada, and 22% of Apple’s net income came from Europe in the first quarter of 2013.

***

In June 2011, Microsoft admitted that the United States could bypass EU privacy regulations to get vast amounts of cloud data from their European customers. Six months later, BAE Systems, based in the United Kingdom, stopped using the company’s cloud services because of this issue.

***

The NSA scandal has brought tensions over spying to a boil. German prosecutors may open a criminal investigation into NSA spying. On July 3, Germany’s interior minister said that people should stop using companies like Google and Facebook if they fear the U.S. is intercepting their data. On July 4, the European Parliament condemned spying on Europeans and ordered an investigation into mass surveillance. The same day, Neelie Kroes, the EU’s chief telecom and Internet official, warned of “multi-billion euro consequences for American companies” because of U.S. spying in the cloud.

***

Transparency is an important first step. Its absence only exacerbates a trust deficit that companies already had in Europe. And trust is crucial. Google’s chief legal officer recognized this on June 19 when he said, “Our business depends on the trust of our users,” during a Web chat about the NSA scandal. Some companies have been aggressive in trying to disclose more, and others have not. But unless the U.S. government loosens strictures and allows greater disclosure, all U.S. companies are likely to suffer the backlash.

***

The Obama administration needs to recognize and mitigate the serious economic risks of spying while trying to rebuild its credibility on Internet freedom. The July 9 hearing of the Privacy and Civil Liberties Oversight Board is a start, but much more is needed. More disclosure about the surveillance programs, more oversight, better laws, and a process to work with allied governments to increase privacy protections would be a start.

The European customers of Internet companies are not all al Qaeda or criminals, but that is essentially how U.S. surveillance efforts treat them. If this isn’t fixed, this may be the beginning of a very costly battle pitting U.S. surveillance against European business, trade, and human rights.

The Atlantic notes:

Most communications flow over the Internet and a very large percentage of key Internet infrastructure is in the United States. Thus, foreigners’ communications are much more likely to pass through U.S. facilities even when no U.S. person is a party to a particular message. Think about a foreigner using Gmail, or Facebook, or Twitter — billions of these communications originate elsewhere in the world but pass through, and are stored on, servers located in the U.S.

***

Foreigners … comprise a growing majority of any global company’s customers.

***

From the perspective of many foreign individuals and governments, global Internet companies headquartered in the U.S. are a security and privacy risk. And that means foreign governments offended by U.S. snooping are already looking for ways to make sure their citizens’ data never reaches the U.S. without privacy concessions. We can see the beginnings of this effort in the statement by the vice president of the European Commission, Viviane Reding, who called in her June 20 op-ed in the New York Times for new EU data protection rules to “ensure that E.U. citizens’ data are transferred to non-European law enforcement authorities only in situations that are well defined, exceptional and subject to judicial review.” While we cheer these limits on government access, the spying scandal also puts the U.S. government and American companies at a disadvantage in ongoing discussions with the EU about upcoming changes to its law enforcement and consumer-privacy-focused data directives, negotiations critical to the Internet industry’s ongoing operations in Europe.

Even more troubling, some European activists are calling for data-storage rules to thwart the U.S. government’s surveillance advantage. The best way to keep the American government from snooping is to have foreigners’ data stored locally so that local governments – and not U.S. spy agencies — get to say when and how that data may be used. And that means nations will force U.S.-based Internet giants like Google, Facebook, and Twitter, to store their user data in-country, or will redirect users to domestic businesses that are not so easily bent to the American government’s wishes.

So the first unintended consequence of mass NSA surveillance may be to diminish the power and profitability of the U.S. Internet economy. America invented the Internet, and our Internet companies are dominant around the world. The U.S. government, in its rush to spy on everybody, may end up killing our most productive golden goose.

San Diego Union-Tribune writes:

California and its businesses have a problem. It’s called the National Security Agency.

***

The problem for California is not that the feds are collecting all of our communications. It is that the feds are (totally unapologetically) doing the same to foreigners, especially in communications with the U.S. California depends for its livelihood on people overseas — as customers, trade partners, as sources of talent. Our leading industries — shipping, tourism, technology, and entertainment — could not survive, much less prosper, without the trust and goodwill of foreigners. We are home to two of the world’s busiest container ports, and we are a leading exporter of engineering, architectural, design, financial, insurance, legal, and educational services. All of our signature companies — Apple, Google, Facebook, Oracle, Intel, Hewlett-Packard, Chevron, Disney — rely on sales and growth overseas. And our families and workplaces are full of foreigners; more than one in four of us were born abroad, and more than 50 countries have diaspora populations in California of more than 10,000.

***

News that our government is collecting our foreign friends’ phone records, emails, video chats, online conversations, photos, and even stored data, tarnishes the California and American brands.

***

Will tourists balk at visiting us because they fear U.S. monitoring? Will overseas business owners think twice about trading with us because they fear that their communications might be intercepted and used for commercial gain by American competitors? Most chilling of all: Will foreigners stop using the products and services of California technology and media companies — Facebook, Google, Skype, and Apple among them — that have been accomplices (they say unwillingly) to the federal surveillance?

The answer to that last question: Yes. It’s already happening. Asian governments and businesses are now moving their employees and systems off Google’s Gmail and other U.S.-based systems, according to Asian news reports. German prosecutors are investigating some of the American surveillance. The issue is becoming a stumbling block in negotiations with the European Union over a new trade agreement. Technology experts are warning of a big loss of foreign business.

John Dvorak, the PCMag.com columnist, wrote recently, “Our companies have billions and billions of dollars in overseas sales and none of the American companies can guarantee security from American spies. Does anyone but me think this is a problem for commerce?”

***

It doesn’t help when our own U.S. Sen. Dianne Feinstein is backing the surveillance without acknowledgment of the huge potential costs to her state.

It’s time for her and House Minority Leader Nancy Pelosi, who has been nearly as tone-deaf on this issue, to be forcefully reminded that protecting California industry, and the culture of openness and trust that is so vital to it, is at least as important as protecting massive government data-mining. Such reminders should take the force not merely of public statements but of law.

California has a robust history of going its own way — on vehicle standards, energy efficiency, immigration, marijuana. Now is the time for another departure — this one on the privacy of communications.

***

We need laws, perhaps even a state constitutional amendment, to make plain that California considers the personal data and communications of all people, be they American or foreign, to be private and worthy of protection.

And see this.

The bigger picture is that a country’s economic health is correlated with a strong rule of law more than any other factor.

Yet America has rapidly fallen into a state of lawlessness, where fundamental rights – such as protection against mass spying by the government – have been jettisoned.

The government is spying on just about everything we do.  Even the government’s attempted denials of this fact confirm it.

http://www.zerohedge.com/contributed/2013-07-31/nsa-spying-directly-harms-internet-companies-silicon-valley-california-%E2%80%A6-and-

The spying cheat sheet

Congress Is Holding Hearings on Government Spying … Here’s a Cheat Sheet

If you’ve been too busy to catch up on the details of the spying scandal, here’s an overview:

• The government is spying on just about everything we do.  Even the government’s attempted denials of this fact confirm it

• The government has adopted a secret interpretation of the Patriot Act which allows it to pretend that “everything” is relevant … so it spies on everyone

• The government’s mass spying doesn’t keep us safe

• NSA spying did not prevent a terror attack on Wall Street

• There is no real oversight by either Congress or the courts. And see this and this

• Even a Federal judge who was on the secret spying court for 3 years says that it’s a kangaroo court

• Experts say that the spying program is illegal, and is exactly the kind of thing which King George imposed on the American colonists … which led to the Revolutionary War

• A former U.S. president says that the spying program shows that we no longer have a functioning democracy

• We can keep everyone safe without violating the Constitution … more cheaply and efficiently than the current system

• The top counter-terrorism Czar under Clinton and Bush says that revealing NSA spying programs does not harm national security

• Whistleblowers on illegal spying have no “legal” way to get the information out

• A high-level intelligence source says “we hack everyone everywhere“

• Spying started before 9/11 … and may have stemmed from an emergency program only meant to be activated in the case of a nuclear war

• Governments and big corporations are doing everything they can to destroy anonymity

• Mass spying creates an easy mark for hackers

• Mass surveillance by the NSA directly harms internet companies, Silicon Valley, California … and theentire U.S. economy

• IT and security professionals are quite concerned about government spying

• Some people make a lot of money off of mass spying

• But the government isn’t using the spying program to stop the worst types of lawlessness

• Polls show that the public doesn’t believe the NSA

• While leaker Edward Snowden is treated as a traitor by the fatcats and elites, he is considered a heroby the American public

• While the Obama administration is spying on everyone in the country – it is at the same time themost secretive administration ever (background). That’s despite Obama saying he’s running the most transparent administration ever

• Top constitutional experts say that Obama and Bush are worse than Nixon … and the Stasi East Germans

• A Congressman noted that – even if a mass surveillance program is started for good purposes – it will inevitably turn into a witch hunt

• Surveillance can be used to frame you if someone in government happens to take a dislike to you

• Government spying has always focused on crushing dissent … not on keeping us safe

• An NSA whistleblower says that the NSA is spying on – and blackmailing – top government officials and military officers (and see this)

• High-level US government officials have warned for 40 years that mass surveillance would lead to tyranny in America

• A bill to stop NSA spying was narrowly defeated, momentum is building to rein in the programs, and Congressmen Holt and Grayson have introduced legislation to stop the mass surveillance

http://www.washingtonsblog.com/2013/07/cheat-sheet-on-spying-2.html