USA: Put LaRouche’s 2007 Homeowners Protection Bill On The Table Again
How can a rise in employment match a rise in household debt? Two options: either the new jobs offer no income, or employment figures are fake. A closer look at the statistics published by the Labor Department on Aug. 6 shows that the latter hypothesis is true.
According to official figures, U.S. employment in July rose by 943,000, with a big drop in the unemployment rate to 5.4%. While these nearly 1 million new jobs were parading by, however, one might notice that they were entirely an artifact of “seasonal adjustments.” The unadjusted figures gathered in the Department’s Establishment Survey actually showed total non-farm employment dropping by 133,000, roughly what has usually happened from June to July over the last decade (summer jobs for teens are a thing of the past). Looking closer, we see that total employment remains a full 6.5 million below its peak in November 2019; goodsproducing employment is still 650,000 less than its recent peak, which was in August 2019. We also observe that the American labor force has shrunk by 2.1 million participants in two years, and the employment/population rate has dropped by a full 2.4% in those two years. Not surprisingly, if we turn our gaze to the back of the parade, we see that the number of Americans out of the U.S. labor force has risen sharply by 4.37 million since July 2019.
This explains why household debt has risen by $313 billion in the second quarter of this year, the largest increase since 2007. Total household debt hit $15 trillion; it has risen by 6% in the six quarters since the end of 2019, but by 2.1% just in the second quarter 2021, according to the New York Federal Reserve Bank.
Dominating the jump was a $282 billion, or 3% jump in mortgage debt in the second quarter. American households’ mortgage debt, which had stagnated since 2008 and never gone above $9.5 trillion, has now reached $10.44 trillion in a sudden rise driven by exploding prices of new, and lately also existing homes.
A wave of evictions and/or foreclosures is inevitable. To avoid that, the Homeowners and Bank Protection Act proposed by Lyndon LaRouche in August 2007 amidst the national foreclosure wave of that year, is the only model to follow. Combining the Glass-Steagall principle with a nationwide foreclosure moratorium and “affordable monthly payments,” it was proposed at the time as the only means “for stopping millions of home foreclosures and evictions … and for launching a larger process of bankruptcy restructuring of the U.S. and global dollar-based financial system.”