US consumer confidence up on better hiring outlook

WASHINGTON (AP) — Americans’ confidence in the economy jumped this month, helped by a better outlook for the job market and expectations for higher pay.
Business Headlines

US consumer confidence up on better hiring outlook

States push to tie university funding to better performance

In California, Governor Jerry Brown is pushing a new plan to hold down tuition and raise graduation rates at the state’s public universities. A new proposal would give those universities more state funding if they meet certain targets.

Typically, funding is awarded based on enrollment. The more students universities enroll, the more money they get.

“It’s simply been too easy to enroll students and then not focus enough on how do we get them through?” says Robert Shireman with the education policy group California Competes.

About 60 percent of University of California undergrads finish in four years. At Cal State, where many students attend part-time, just 16 percent graduate in four years.

Governor Brown’s plan would increase funding for those universities over the next four years — if they keep tuition flat, accept more transfer students from community colleges, and graduate more students more quickly.

About a dozen states already link funding to performance, says Julie Bell, who tracks education finance at the National Conference of State Legislatures. Several more are moving in that direction.

“Intuitively, it sounds reasonable,” Bell says, “but we don’t have hard evidence yet that says, in fact, this will work.”

Legislators will have to sign off on the California plan first. State officials present it to the Assembly later today.

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States push to tie university funding to better performance

100 Years Old And Still Killing Us: America Was Much Better Off Before The Income Tax

Did you know that the greatest period of economic growth in American history was during a time when there was absolutely no federal income tax?  Between the end of the Civil War and 1913, there was an explosion of economic activity in the United States unlike anything ever seen before or since.  Unfortunately, a federal income tax was instituted in 1913, and this year it turned 100 years old.  But there was no fanfare, was there?  There was no celebration because the federal income tax is universally hated.  Sadly, most Americans just assume that there is no other option to an income tax.  Most Americans just assume that it has always been with us and that it will always be with us.  This year, the American people will shell out approximately $ 4.22 trillion in state and federal income taxes.  That amount is equivalent to approximately 29.4 percent of all income that Americans will bring in this year, and that does not even take into account the dozens of other taxes that Americans pay each year.  At this point, the U.S. tax code is about 13 miles long, and those that are honest and pay their taxes every year are being absolutely shredded by this system.  But wouldn’t the federal government go broke if we didn’t have a federal income tax?  No, actually the truth is that the federal government did just fine before there was an income tax.  In fact, the U.S. national debt has gotten more than 5000 times larger since the federal income tax and the Federal Reserve were created by Congress back in 1913.  As I have written about previously, the Federal Reserve system was actually designed to trap the United States in a debt spiral from which it could never possibly escape, and the federal income tax was needed to greatly expand the size of the federal government and to soak the American people of the funds necessary to service that debt.  But it doesn’t have to be this way.  America was once much better off before the income tax and the Federal Reserve were created, and we could easily go to such a system again.

What we desperately need to do is to teach the American people a little history lesson.  The truth is that the greatest period of economic growth in U.S. history was between the Civil War and 1913 when there was no federal income tax at all.  The following is from Wikipedia…

The Gilded Age saw the greatest period of economic growth in American history. After the short-lived panic of 1873, the economy recovered with the advent of hard money policies and industrialization. From 1869 to 1879, the US economy grew at a rate of 6.8% for real GDP and 4.5% for real GDP per capita, despite the panic of 1873.  The economy repeated this period of growth in the 1880s, in which the wealth of the nation grew at an annual rate of 3.8%, while the GDP was also doubled.

Sadly, most Americans cannot even conceive of an economy like that.  Most Americans cannot even imagine having a nation without a massively bloated federal government and without an unelected central bank centrally planning our financial system.

But you know what?

It worked.  In fact, it worked fantastically well.

The period between the Civil War and 1913 propelled the United States to greatness.  Just check out all of the good things that Wikipedia says happened for the U.S. economy during those years…

The rapid economic development following the Civil War laid the groundwork for the modern U.S. industrial economy. By 1890, the USA leaped ahead of Britain for first place in manufacturing output.

An explosion of new discoveries and inventions took place, a process called the “Second Industrial Revolution.” Railroads greatly expanded the mileage and built stronger tracks and bridges that handled heavier cars and locomotives, carrying far more goods and people at lower rates. Refrigeration railroad cars came into use. The telephone, phonograph, typewriter and electric light were invented. By the dawn of the 20th century, cars had begun to replace horse-drawn carriages.

Parallel to these achievements was the development of the nation’s industrial infrastructure. Coal was found in abundance in the Appalachian Mountains from Pennsylvania south to Kentucky. Oil was discovered in western Pennsylvania; it was mainly used for lubricants and for kerosene for lamps. Large iron ore mines opened in the Lake Superior region of the upper Midwest. Steel mills thrived in places where these coal and iron ore could be brought together to produce steel. Large copper and silver mines opened, followed by lead mines and cement factories.

In 1913 Henry Ford introduced the assembly line, a step in the process that became known as mass-production.

But if we didn’t have an income tax, how did we fund the government?  Well, we mostly did it with tariffs and excise taxes.  The following is from a recent article by Thomas R. Eddlem…

Prior to ratification of the 16th (income tax) Amendment in February 1913, the federal government managed its few constitutional responsibilities without an income tax, except during the Civil War period. During peacetime, it did so largely — or even entirely — on import taxes called “tariffs.” Congress could afford to run the federal government on tariffs alone because federal responsibilities did not include welfare programs, agricultural subsidies, or social insurance programs like Social Security or Medicare. After the Civil War, tariff revenues sometimes suffered under a protectionist policy ushered in by the Republican Party that supplemented federal income via excises on alcohol, tobacco, and inheritances. But before the war, the need for tariff revenue to finance the federal government generally kept the tariff at reasonable levels. During wartime throughout early American history, the Founding Fathers were able to raise additional revenue employing a different method of direct taxation authorized by the U.S. Constitution prior to the 16th Amendment. These alternative taxing methods gave the young American nation embarrassing peacetime budget surpluses that several times came close to paying off the national debt.

So why didn’t we stick with that system?

Well, early in the 20th century the “progressives” and the social planners started to take control in Washington.

And one of the things that “progressives” and social planners love is an income tax.  In fact, the second plank of the Communist Manifesto is a “heavy progressive or graduated income tax”.

Of course they promised us that income tax rates would always remain low.  And at first they were quite low.  The following is from an article by Adam Young…

The presidential election of 1912 was contested between three advocates of an income tax. The winner, Woodrow Wilson, after the ratification of the Sixteenth Amendment, called a special session of Congress in April 1913, which proceeded to pass an income tax of 1% on incomes above $ 3,000 and applied surcharges between 2% and 7% on income from $ 20,000 to $ 500,000.

But once the “progressives” and the social planners get their feet in the door, they always want more.

And we have seen how things have worked out.  Today, the American people are being taxed into oblivion.

In a previous article entitled “Show This To Anyone That Believes That Taxes Are Too Low“, I listed dozens of other taxes that the American people pay each year in addition to federal and state income taxes…

#1 Building Permit Taxes

#2 Capital Gains Taxes

#3 Cigarette Taxes

#4 Court Fines (indirect taxes)

#5 Dog License Taxes

#6 Drivers License Fees (another form of taxation)

#7 Federal Unemployment Taxes

#8 Fishing License Taxes

#9 Food License Taxes

#10 Gasoline Taxes

#11 Gift Taxes

#12 Hunting License Taxes

#13 Inheritance Taxes

#14 Inventory Taxes

#15 IRS Interest Charges (tax on top of tax)

#16 IRS Penalties (tax on top of tax)

#17 Liquor Taxes

#18 Luxury Taxes

#19 Marriage License Taxes

#20 Medicare Taxes

#21 Medicare Tax Surcharge On High Earning Americans Under Obamacare

#22 Obamacare Individual Mandate Excise Tax (if you don’t buy “qualifying” health insurance under Obamacare you will have to pay an additional tax)

#23 Obamacare Surtax On Investment Income (a new 3.8% surtax on investment income that goes into effect next year)

#24 Property Taxes

#25 Recreational Vehicle Taxes

#26 Toll Booth Taxes

#27 Sales Taxes

#28 Self-Employment Taxes

#29 School Taxes

#30 Septic Permit Taxes

#31 Service Charge Taxes

#32 Social Security Taxes

#33 State Unemployment Taxes (SUTA)

#34 Tanning Tax (a new Obamacare tax on tanning services)

#35 Telephone Federal Excise Taxes

#36 Telephone Federal Universal Service Fee Taxes

#37 Telephone Minimum Usage Surcharge Taxes

#38 Telephone State And Local Taxes

#39 Tire Taxes

#40 Tolls (another form of taxation)

#41 Traffic Fines (indirect taxation)

#42 Utility Taxes

#43 Vehicle Registration Taxes

#44 Workers Compensation Taxes

Yet even with all of these taxes, our local governments, our state governments and our federal government are all absolutely drowning in debt.

In another previous article entitled “24 Outrageous Facts About Taxes In The United States That Will Blow Your Mind“, I listed a number of reasons why our federal income tax system has become a complete and utter abomination that can never be fixed…

1 – The U.S. tax code is now 3.8 million words long.  If you took all of William Shakespeare’s works and collected them together, the entire collection would only be about 900,000 words long.

2 – According to the National Taxpayers Union, U.S. taxpayers spend more than 7.6 billion hours complying with federal tax requirements.  Imagine what our society would look like if all that time was spent on more economically profitable activities.

3 – 75 years ago, the instructions for Form 1040 were two pages long.  Today, they are 189 pages long.

4 – There have been 4,428 changes to the tax code over the last decade.  It is incredibly costly to change tax software, tax manuals and tax instruction booklets for all of those changes.

5 – According to the National Taxpayers Union, the IRS currently has 1,999 different publications, forms, and instruction sheets that you can download from the IRS website.

6 – Our tax system has become so complicated that it is almost impossible to file your taxes correctly.  For example, back in 1998 Money Magazine had 46 different tax professionals complete a tax return for a hypothetical household.  All 46 of them came up with a different result.

7 – In 2009, PC World had five of the most popular tax preparation software websites prepare a tax return for a hypothetical household.  All five of them came up with a different result.

8 – The IRS spends $ 2.45 for every $ 100 that it collects in taxes.

9 – According to The Tax Foundation, the average American has to work until April 17th just to pay federal, state, and local taxes.  Back in 1900, “Tax Freedom Day” came on January 22nd.

10 – When the U.S. government first implemented a personal income tax back in 1913, the vast majority of the population paid a rate of just 1 percent, and the highest marginal tax rate was just 7 percent.

11 – Residents of New Jersey pay $ 1.64 in taxes for every $ 1.00 of federal spending that they get back.

12 – The United States is the only nation on the planet that tries to tax citizens on what they earn in foreign countries.

13 – According to Forbes, the 400 highest earning Americans pay an average federal income tax rate of just 18 percent.

14 – Warren Buffett had an effective tax rate of just 17.4 percent for 2010.

15 – The top 20 percent of all income earners in the United States pay approximately 86 percent of all federal income taxes.

16 – Sadly, as Bill Whittle has shown, you could take every single penny that every American earns above $ 250,000 and it would only fund about 38 percent of the federal budget.

17 – The United States has the highest corporate tax rate in the world (35 percent).  In Ireland, the corporate tax rate is only 12.5 percent.  This is causing thousands of corporations to move operations out of the United States and into other countries.

18 – Some tax havens are doing a booming business in setting up sham headquarters for U.S. corporations.  For example, the city of Zug, Switzerland only has a population of 26,000 people but it is the headquarters for 30,000 companies.

19 – In 1950, corporate taxes accounted for about 30 percent of all federal revenue.  In 2012, corporate taxes will account for less than 7 percent of all federal revenue.

The wealthy have become absolute masters at avoiding taxes, and the poor are not able to pay much.

So who always gets squeezed?

The middle class does.

No matter what our politicians promise us, the hammer is always brought down on the middle class.

And now, according to The Huffington Post, the IRS says that it can even read our old emails without a warrant to make sure that we are paying all of the taxes that we should be…

The IRS apparently interprets that authority very broadly, the documents show: as long as you’ve stored your email in a cloud service like Google Mail, and as long as those emails haven’t been deleted after a few months, the agency thinks it doesn’t need a warrant to read them.

The idea of IRS agents poking through your email account might sound at the very least creepy, and maybe unconstitutional. But the IRS does have a legal leg to stand on: the Electronic Communications Privacy Act of 1986 allows government agencies to in many cases obtain emails older than 180 days without a warrant.

That’s why an internal 2009 IRS document claimed that “the government may obtain the contents of electronic communication that has been in storage for more than 180 days” without a warrant.

It should be noted that the IRS is claiming that it does not use emails “to target” specific taxpayers, but notice that they are not promising not to use old emails against taxpayers once they are officially being audited or investigated…

“Contrary to some suggestions, the IRS does not use emails to target taxpayers. Any suggestion to the contrary is wrong.”

In any event, the truth is that we have one of the most complicated and one of the most intrusive tax systems in the history of the world.

Don’t the American people deserve better?

What do you think?

Should America go back to a system where there is no income tax and no Federal Reserve?

Please feel free to share what you think by leaving a comment below…

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The Economic Collapse

100 Years Old And Still Killing Us: America Was Much Better Off Before The Income Tax

Retailers have ho-hum start to spring, see better April

A customer enters a Costco store in Shoreline, Washington in this file photo taken November 3, 2011.

Credit: Reuters/Anthony Bolante/Files

By Phil Wahba and Dhanya Skariachan

Thu Apr 11, 2013 8:17pm EDT

(Reuters) – Cold weather and lingering concerns about the job market dampened U.S. shoppers’ enthusiasm and hurt early spring selling at several retailers in March, but some executives and analysts said they expected business to improve slightly in April.

Several top retailers, including Costco Wholesale Corp (COST.O) and TJX Cos Inc (TJX.N), the parent of T.J. Maxx, reported weaker-than-expected March sales.

The labor market recovery showed signs of losing momentum in March as employers hired at the weakest pace in nine months, raising concerns that consumer spending will be hurt.

“Anyone who thinks the consumer will come swinging out of the gate is fooling themselves,” said Alison Jatlow Levy, retail strategist at consulting firm Kurt Salmon.

Many parts of the country also experienced the worst of winter in February and March, later than normal, causing shoppers to hold off on purchases of spring merchandise.

Costco’s sales at stores open at least a year were up 4 percent, less than the 5.2 percent jump analysts had expected for the warehouse club discount retailer.

TJX, the owner of the low-price Marshalls chain as well as T.J. Maxx, reported a 2 percent decline in March same-store sales, deeper than the 1 percent drop analysts had projected. But the company said business improved as the weather warmed up, and Chief Executive Carol Meyrowitz said April “was off to a good start.”

Michael Niemira, chief economist for the International Council of Shopping Centers, and others also expect things to improve for retailers in April as shoppers release some pent-up demand and lower gasoline prices boost their discretionary spending power.

The ICSC forecasts a 2 to 3 percent increase in April same-store sales, and a 3 to 4 percent gain excluding drugstores.

The arrival of delayed tax refunds for some customers should also help boost April sales, said Ken Perkins, president of consulting firm Retail Metrics.

The Standard & Poor’s 500 Retail Index .SPXRT, which fell earlier on Thursday, rose as much as 1.8 percent to touch a more than one-year high, outpacing the broad S&P 500′s .SPX 0.6 percent gain. The retail index finished the day up 1.22 percent.

POCKETS OF STRENGTH

The top 13 top U.S. retailers, including TJX Cos and Gap Inc (GPS.N), reported a combined 1.5 percent rise in same-store sales for March, just missing the 1.8 percent increase expected by analysts polled by Thomson Reuters. In March 2012 those retailers reported a same-store sales gain of 2.9 percent.

Excluding drugstore chains Walgreen Co (WAG.N) and Rite Aid Corp (RAD.N), whose results are heavily skewed by prescriptions sales, same-store sales were up 1.9 percent in March. That gain was smaller than the 2.2 percent rise expected by Wall Street and the 7.1 percent jump reported a year earlier.

There were some bright spots in the month, despite the slow job market and cold weather.

Victoria’s Secret parent L Brands Inc (LTD.N) reported higher-than-expected sales at all of its chains. Companywide, same-store sales rose 3 percent, while Wall Street expected them to be flat according to Thomson Reuters data. The retailer’s shares rose more than 5 percent.

Low-priced retailer Ross Stores Inc (ROST.O), which has less exposure to the colder regions of North American than larger rival TJX, posted an unexpected gain in same-store sales. It said it now expected its quarterly profit to come in slightly above its earlier forecast of $ 1.00 to $ 1.04 per share. Its stock rose 7.5 percent.

Zumiez Inc (ZUMZ.O) and Buckle Inc (BKE.N), whose target market of younger shoppers is particularly exposed to economic vagaries, both reported stronger-than-expected numbers. American Apparel Inc (APP.A) said its March same-store sales were up 8 percent.

In the case of Gap, the news was not as bad than expected. March same-store sales were down 1 percent, less than the 2.1 percent drop analysts expected.

PAIN OF COLD WEATHER

Many retailers were hampered by the cold start to March, prompting many shoppers to put off buying warmer-weather clothing.

Also, Easter fell on March 31 this year, compared with April 8 last year. With the wintry weather leading up to the holiday, shoppers may have held off on buying clothes for spring.

Low-priced specialty clothing chain Cato Corp (CATO.N), regional department store operator Stein Mart Inc (SMRT.O) and discount general merchandise retailer Fred’s Inc (FRED.O) all blamed weather and Easter’s timing for steeper-than-expected drops in March same-store sales.

Last week, Rite Aid said its same-store sales fell 2 percent, but sales of general merchandise, a closer proxy to consumer discretionary spending, rose 3.8 percent.

Larger rival Walgreen reported a modest 0.7 percent same-store sales gain, with a better showing for general merchandise, which beat expectations.

(Additional reporting by Jessica Wohl in Chicago and Lisa Baertlein in Los Angeles; Editing by Jeffrey Benkoe, Lisa Von Ahn, Leslie Adler and Richard Chang)

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Reuters: Economic News

Retailers have ho-hum start to spring, see better April

Retailers have ho-hum start to spring, see better April

A customer enters a Costco store in Shoreline, Washington in this file photo taken November 3, 2011.

Credit: Reuters/Anthony Bolante/Files

By Phil Wahba and Dhanya Skariachan

Thu Apr 11, 2013 8:17pm EDT

(Reuters) – Cold weather and lingering concerns about the job market dampened U.S. shoppers’ enthusiasm and hurt early spring selling at several retailers in March, but some executives and analysts said they expected business to improve slightly in April.

Several top retailers, including Costco Wholesale Corp (COST.O) and TJX Cos Inc (TJX.N), the parent of T.J. Maxx, reported weaker-than-expected March sales.

The labor market recovery showed signs of losing momentum in March as employers hired at the weakest pace in nine months, raising concerns that consumer spending will be hurt.

“Anyone who thinks the consumer will come swinging out of the gate is fooling themselves,” said Alison Jatlow Levy, retail strategist at consulting firm Kurt Salmon.

Many parts of the country also experienced the worst of winter in February and March, later than normal, causing shoppers to hold off on purchases of spring merchandise.

Costco’s sales at stores open at least a year were up 4 percent, less than the 5.2 percent jump analysts had expected for the warehouse club discount retailer.

TJX, the owner of the low-price Marshalls chain as well as T.J. Maxx, reported a 2 percent decline in March same-store sales, deeper than the 1 percent drop analysts had projected. But the company said business improved as the weather warmed up, and Chief Executive Carol Meyrowitz said April “was off to a good start.”

Michael Niemira, chief economist for the International Council of Shopping Centers, and others also expect things to improve for retailers in April as shoppers release some pent-up demand and lower gasoline prices boost their discretionary spending power.

The ICSC forecasts a 2 to 3 percent increase in April same-store sales, and a 3 to 4 percent gain excluding drugstores.

The arrival of delayed tax refunds for some customers should also help boost April sales, said Ken Perkins, president of consulting firm Retail Metrics.

The Standard & Poor’s 500 Retail Index .SPXRT, which fell earlier on Thursday, rose as much as 1.8 percent to touch a more than one-year high, outpacing the broad S&P 500′s .SPX 0.6 percent gain. The retail index finished the day up 1.22 percent.

POCKETS OF STRENGTH

The top 13 top U.S. retailers, including TJX Cos and Gap Inc (GPS.N), reported a combined 1.5 percent rise in same-store sales for March, just missing the 1.8 percent increase expected by analysts polled by Thomson Reuters. In March 2012 those retailers reported a same-store sales gain of 2.9 percent.

Excluding drugstore chains Walgreen Co (WAG.N) and Rite Aid Corp (RAD.N), whose results are heavily skewed by prescriptions sales, same-store sales were up 1.9 percent in March. That gain was smaller than the 2.2 percent rise expected by Wall Street and the 7.1 percent jump reported a year earlier.

There were some bright spots in the month, despite the slow job market and cold weather.

Victoria’s Secret parent L Brands Inc (LTD.N) reported higher-than-expected sales at all of its chains. Companywide, same-store sales rose 3 percent, while Wall Street expected them to be flat according to Thomson Reuters data. The retailer’s shares rose more than 5 percent.

Low-priced retailer Ross Stores Inc (ROST.O), which has less exposure to the colder regions of North American than larger rival TJX, posted an unexpected gain in same-store sales. It said it now expected its quarterly profit to come in slightly above its earlier forecast of $ 1.00 to $ 1.04 per share. Its stock rose 7.5 percent.

Zumiez Inc (ZUMZ.O) and Buckle Inc (BKE.N), whose target market of younger shoppers is particularly exposed to economic vagaries, both reported stronger-than-expected numbers. American Apparel Inc (APP.A) said its March same-store sales were up 8 percent.

In the case of Gap, the news was not as bad than expected. March same-store sales were down 1 percent, less than the 2.1 percent drop analysts expected.

PAIN OF COLD WEATHER

Many retailers were hampered by the cold start to March, prompting many shoppers to put off buying warmer-weather clothing.

Also, Easter fell on March 31 this year, compared with April 8 last year. With the wintry weather leading up to the holiday, shoppers may have held off on buying clothes for spring.

Low-priced specialty clothing chain Cato Corp (CATO.N), regional department store operator Stein Mart Inc (SMRT.O) and discount general merchandise retailer Fred’s Inc (FRED.O) all blamed weather and Easter’s timing for steeper-than-expected drops in March same-store sales.

Last week, Rite Aid said its same-store sales fell 2 percent, but sales of general merchandise, a closer proxy to consumer discretionary spending, rose 3.8 percent.

Larger rival Walgreen reported a modest 0.7 percent same-store sales gain, with a better showing for general merchandise, which beat expectations.

(Additional reporting by Jessica Wohl in Chicago and Lisa Baertlein in Los Angeles; Editing by Jeffrey Benkoe, Lisa Von Ahn, Leslie Adler and Richard Chang)

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Reuters: Economic News

Retailers have ho-hum start to spring, see better April

These Charts Better Not Represent The True State Of The US Economy

Lately, when it comes to obtaining an accurate sense of the true state of the US economy, it is as difficult if not more than analyzing the openly-manipulated Chinese data. On one hand, the Fed-juiced market, which has lost its discounting powers, no longer reflects the current or future economic (or corporate) fundamentals, on the other, massive seasonal aberrations, whether purposeful or accidental, have made a mockery of any data series, be it jobs, manufacturing, retail sales, or housing. On the other, the administration – still stuck in the worst economic “recovery” since the Great Depression – is desperate to telegraph an improving economy, most evident in the months leading up to the presidential election, which makes taking any data at face value problematic and naive at best. Yet even the openly-contradicting Chinese data manipulation has its Achilles heel in the form of monthly electricity consumption (and to a lesser extent, production) updates.

So what is the US equivalent of Chinese electricity consumption data? We believe it may be the little-tracked, and thus not nearly as “adjusted” weekly updates from the Energy Information Administration, whose data on barrels of US product supplied of both total petroleum products and just gasoline are as indicative of the true state of the energy-hungry beating heart of the US economy as any other data set, and is likely a far more accurate representation of what is really going on between the lines.

Sadly, if that is indeed the case, then the disconnect between propaganda myth and reality is about as big as can be, since on a blended 52-week average basis, the total product supplied of motor gasoline is back to 2003 levels (black line on chart below). However, where it gets really scary is looking at the total product supplied category, which includes gasoline and all other product such as heating oil, propane, and kerosene. As the chart below shows, the US economy, whose GDP we are led to believe has never been higher, now has the same total consumption of all petroleum products (red line) as it did… back in 1997!

Source: Weekly US Product of Finished Motor Gasoline (EIA), and Total Petroleum Product (EIA).

The same disturbing story is revealed when looking at various other EIA charts of sales, and thus demand, such as this one showing that 52 week average sales and deliveries of gasoline by prime supplier in the US has also tumbled to levels last seen in the late 90′s.

Source: Total Gasoline All Sales/Deliveries by Prime Supplier (EIA)

But maybe it is just the usage of more efficient modes of transportation, and a higher MPG as more Americans shift to electric cars and some such. Sure, maybe. Of course, that would not explain why the total miles driven has hardly budged for the last decade, and is far off the all time high recorded when the economy was indeed humming on all fours, if moments before it imploded in 2007…

Source: Moving 12-Month Total Vehicle Miles Traveled (St. Louis Fed FRED)

… but the biggest question we have is just how did the biggest boost in energy and engine efficiency occurred at two key junctions: Just after the Lehman Failure, and just after the US downgrade and the first debt ceiling crisis, when the total sales of gasoline by US retailers literally went off the charts, and which data series is now languishing at levels not seen since the 1970s (unfortunately we can only estimate: not even the EIA’s data set goes back that far).

Source: US Total Gasoline Retail Sales by Refiners (EIA)

Perhaps, just perhaps, Occam’s razor applies in this situation as well, and the collapse in energy demand in the US has little to do with MPG efficiency, higher productivity, and throughput mysteriously achieved just when the entire economy was imploding in the months after the Lehman failure, and despite the re-emerging proliferation of cheap Fed debt funded SUVs and small trucks (discussed here), and everything to do with the US consumer being slowly but surely tapped out?

Of course, if that is the case, than the US economy is far, far weaker than even we could have surmised, although it certainly would explain the desperation with which the Fed is doing everything in its power to preserve the levitation of the S&P, i.e., the confidence that all is well despite all signs to the contrary. Because should the market finally be allowed to reflect the underlying economy – not the administration represented economy, but the real one – then everything that has transpired in the past five years will be child’s play compared to what’s coming.

Zero Hedge

These Charts Better Not Represent The True State Of The US Economy

Santelli Stunned: It"s Better To Be On Disability Than Work Minimum Wage

The sad truth in the USA, as we explained in great detail here, incentives to ‘work’ are increasingly non-existent. Thanks to a never-ending stream of benefits from the great and powerful Oz, as CNBC’s Rick Santelli notes, Disability payments (of which there are 14 million people covered in the US – none of which count towards the unemployment rate) pay around $ 13,000 per year (versus $ 15,000 for minimum wage work). However, Santelli exclaims, the people on disability get healthcare; and this program costs the US $ 300 billion per year. Is it any wonder that only 1% of those who were on disability in Q1 2011 have left? Santelli comments, “I’m not saying there aren’t people that are on disability that shouldn’t be, but much of it is illnesses like back pain… it’s a judgment call,” adding that, “without incentives, large issues go …totally unfixed.”

Asmussen says euro zone in better shape than 12 months ago

European Central Bank (ECB) Executive Board member Joerg Asmussen smiles during an interview with Reuters in Berlin June 19, 2012.

Credit: Reuters/Pawel Kopczynski

Reuters: Business News

Asmussen says euro zone in better shape than 12 months ago