Part III - why I have no confidence in the recovery.

The Senate in all of its wisdom, is too afraid to pass a unemployment compensation extension, despite profligate unemployment throughout the US. Now granted, the unemployment rates are extremely uneven from one state to the next, with Michigan holding the highest rate in April at 14%, while North Dakota holds the lowest rate at 3.8% in April. However, there are fully 15 states with double-digit unemployment, including 7 of the 10 most populous states.

Imagine what happens when unemployment is no longer funded. Within months, all of those people receiving unemployment will no longer have income. With no income, every one of them will drop BELOW THE POVERTY LINE.

Here's my question: If all of the unemployed people no longer have income and drop below the poverty line, what makes people so sure that the economy will recover, let alone stop the deficit spending? Medicaid spending will dramatically rise, food stamp programs will be bursting at the seams, and homeless shelters will be overwhelmed as people lose their homes.

Our recovery was tenuous to start with, as the resets of Alt-A loans were looming over us in the second half of 2010 through 2011. What do these people think will happen when people no longer have unemployment compensation? Jobs will suddenly appear out of nowhere? The economy will grow?

Will unicorns sprout from forests with leprechauns carrying pots of gold?

And hence, I have no confidence that the current economic recovery will hold. Actually, by the end of Summer, if we see California, Florida, Nevada, Michigan and Ohio unemployment rates once again creep upwards, we will know that we're headed for a double-dip, and a potentially devastating world-wide Depression.

Now, I understand the fears of a growing debt. However, what are investors doing? They are certainly NOT FLEEING the US Dollar, and they are most certainly buying US Bonds. Further, people continuously refer to Portugal, Spain, Iceland and Greece (among several) that have debt-to-GDP ratios above 100. Now, I've already explained why this is a stupid reference, owning to a lack of understanding that these countries have held extremely high debt ratios for a very long time. Default fears are high because not even a modest recovery can save these nations from their long-term spending problems.

To the contrary, the US' problems are short-term brought on by military spending of two wars, a massive drop in employment, and attempts to prevent the onset of a Depression.

FOLKS, THE US DEBT IS MANAGEABLE, LONG TERM!

Sigh...we're doomed.