The financial crisis is undeniable in the United States, and other countries around the world have faced their own as well. But who are the people who have contributed to these fiscal problems? The team from the Credit Score Site helps us find out.

As if the current job market and economy didn’t make it hard enough for low income households in America to make ends meet, it turns out that living below the poverty line is actually more costly in many respects as well. It not only takes money to make money, it also takes quite a bit of money to live in poverty. Our friends at Online Sociology Degree put together this graphic to illustrate how expensive it is to be a poor American.

[Source: Onlinesociologydegree.net]

The state of the United States today is extremely fragile. Lawmakers are at war with one another over how to reduce our deficit while increasing our quality of living, and there is no end to the debate in sight. At the very core of this struggle over our future is a basic human necessity: health care. Many other developed nations have worked out sustainable models for health care, but in the US, costs are higher and quality of care is worse. The recent passage of health care reform is aimed at fixing our broken system, but many of us want to know: why is our health care so expensive in the first place? Medical Billing and Coding present part one of a two-part series detailing why our health care system is lagging behind those of other wealthy nations, both in affordability and in effectiveness.

Click for Full-Size Image

[Source: medicalbillingandcoding.org]

Economic bubbles have been around since the birth of currency. Created by a wide range of factors, from excessive monetary liquidity to plain old human greed, exuberance and stupidity, they can be described as a trade in products or assets valued far higher than they should be – which is inevitably followed by a crash in prices.

Seek to uncover the causes behind some of history’s most famous bubbles and you’ll find that many arose out of a pretty bizarre set of circumstances. It seems that these economic events can strike the most unusual of markets at the most unlikely of times. Below we take a look at 10 such examples.

10. Tulip Mania

In 1593, tulips were brought from Turkey to Holland and the Dutch instantly fell in love with this most beguiling of flowers. By the latter months of 1636, certain varieties of tulip were worth more than an Amsterdam house! While demand grew exponentially, supply was initially low, compounded by bulb buyers filling their inventories and the four to seven years it takes tulips to reach flowering size.

The Dutch started trading their homes for tulip bulbs, which increased 20 times in value in a month. But these over-inflated prices could not last long, and within weeks prices fell to one hundredth of this value.

9. South Sea Bubble

The term “bubble” itself originates from the inflated stock prices of the South Sea Company, a British joint stock company granted exclusive rights to trade with South America in 1720, in return for financing the British government’s war debt.

This was a time of lavishness and opulence in Britain, with many wealthy speculators desperate to invest in a company that wildly promised astronomical returns, trading wool and fleece for piles of jewels and gold. Shares in the company quickly reached 10 times their value. But when the bubble burst, many of the country’s elite were left destitute.

8. Rhodium Bubble

Every bit as mysterious as it sounds, the Rhodium Bubble of 2008 saw prices of the rare chemical element increase from $500 per ounce in late 2006 to $9,500 per ounce in July 2008, before falling even more rapidly back to $1,000/oz in January 2009. Nobody’s quite sure what sparked the buying frenzy, but it seems to have been a combination of demand in the American car industry, a bullish market in rare metals and at least one rogue speculator on Wall Street leading on the herd of investors.

7. Railway Mania

Railway Mania, another British phenomenon, grew throughout the early 1840s, peaking in 1846 when a staggering 9,500 miles of new railway lines were authorized, around a third of which were never actually built. As the price of railway shares increased, more money poured in, largely from the new, affluent middle classes that had arisen from the smoke of the industrial revolution.

As few had predicted, it ultimately became clear that building railway lines was not as lucrative and easy as investors had been told by wily entrepreneurs. The collapse was unavoidable, and many middle-class families lost their life savings as a result.

6. Romanian Property Bubble

Romania is said to be the country with the highest house price to income ratio in the world. Spectacularly, the price of an old communist-era apartment rose by 1,000% between 2002 and 2007, leaving apartment prices in Romania’s capital city, Bucharest, rivaling those in Paris or London.

Factors thought to have contributed to the boom include growth in the Romanian banking system, high salaries being earned abroad, a poor supply of properties – and money laundering requirements restricting the activities of corrupt businessmen.

5. Mississippi Bubble

In 1716, John Law established the Banque Générale Privée and a year later the Compagnie d’Occident (or The Mississippi Company), which ended up with a complete monopoly on France’s colonial trade, not to mention responsibilities for collecting French taxes and minting money. The company’s share prices sky-rocketed from 500 to 18,000 livres a share.

The popularity of company shares was so great that they prompted the need for more paper bank notes, which The Mississippi Company was only too happy to print. And when shares generated profits, investors were paid in those very same notes. The bubble finally burst when it became clear that the number of notes being issued was far in excess of the metal coinage the company held. As you might expect, John Law fled France soon afterward, disguised as a woman!

4. Florida Land Boom

In the early 1920s, daring entrepreneurs like Carl G. Fisher went to great lengths to promote Miami as a tropical haven, at one stage erecting an enormous billboard in New York’s Times Square reading, “It’s June in Miami.” Before you could say “Everglades,” developers were pouring into the area, ordering vast amounts of building supplies in the process.

These supplies clogged the rail system, and rail companies soon banned the use of their routes for this purpose. Then in January 1926, a schooner sank blocking Miami harbor, starving the area of building supplies altogether. The 1926 Miami Hurricane was the final nail in the coffin, rendering many local developers bankrupt.

3. Poseidon Bubble

In the 1960s, nickel was in high demand and prices were greater than ever thanks to the Vietnam War, but industrial action against the world’s major supplier, Inco, had led to a supply shortfall. When Australian mining company Poseidon NL discovered a potentially lucrative nickel mining site at Windarra, Western Australia, its share price grew dramatically along with investments in other mining companies and mining in general.

Numerous new and dodgy companies were listed, some of which didn’t even have mining leases. Many investors lost money on them, negative press ensued, and share prices in mining plummeted. By the time Poseidon started producing nickel, nickel prices had dropped too and insufficient profits ensured the company was not able to stay afloat.

2. Dot-com Bubble

The dot-com is one of the most well known bubbles in living memory but also one of the strangest. The bubble grew to bursting point between 1995 and 2001 with investment pouring into thousands of new internet firms, many practicing risky policies of growth over profit (brand building and networking in particular), believing that if they built up their customer bases rapidly enough then profits would surely follow.

Novelty and a difficulty in valuing these companies led to some rather enthusiastic investments. But the growth in the tech sector proved deceptive. Poor business practices led to high profile court cases, and the stock market began to tumble, along with hundreds of dot-coms. The bubble finally burst on March 10, 2000, resulting in a mild but long-felt recession.

1. Uranium Bubble

Of all commodities, what could be stranger than uranium? In the 1970s, uranium hit spot prices of around $110 a pound, but dropped down to below $20 pound in the 1990s, and this is were it stayed… until 2005. A perception of future nuclear energy demand from emerging economies, reactor lifetime extensions in the West and low inventories of uranium led to a swift increase in prices from 2005 to 2007, causing a huge spike in stock prices for uranium mining and exploration companies.

Alas, these prices could not be sustained. A sharp fall post-2007 caused many mining and exploration companies to go bust. But the bubble did leave a lasting legacy: known and inferred uranium reserves increased by 15% in that two year period alone.

The American economy is in flux, to put it mildly. Especially if you compile individual conditions, like high unemployment and food-stamp usage, into a bigger picture. That’s just what we attempt to do with the 10 graphs in this post.

We’re All Unemployed

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Chart source: Calculated Risk.

If you need any more proof that we’re in a big, fat recession, the unemployment numbers above should do the trick. 43.9% of unemployed people counted as long-term unemployed as of February 2011, meaning they’d been without work, but looking, for 27 weeks or more, according to the BLS. That translates to 6 million people. 8.3 million people are working part-time jobs because that’s all the work they can get.

One million people count as “discouraged workers,” people who have looked for jobs but, due to lack of opportunities, have given up their search. Note that the government doesn’t apply these people to the unemployment rate, because people who aren’t looking for jobs, no matter the reason, don’t count. Our true employment rate is probably closer to 11% of the population than the official 9%. These “missing workers” mean that the labor force participation rate is around 64%.

Here’s a BLS chart on the labor force participation rate:

A Record Number of People are on Food Stamps

Chart source: Zero Hedge, 44.1 million people were receiving an average of $134/month in food stamps in December 2010.

The government initially created the food stamp program in 1939 as a way to help unemployed people eat. Now, most of a century and one full circle later, everybody’s unemployed again–and food stamps are hot.

“Food stamps” are more of a food card now: If your income is below the federal poverty line, or hovering at it, you can get a debit card with a $100+/month, government-paid food allowance. In 2009, 20,000 new people a day were getting them, a record not seen since the Great Depression.

With even supposedly high-falutin’ Orange County and Forsyth County residents clamoring for stamps, government-subsidized grocery shopping has gone mainstream. Roughly 50% of Americans receive food stamps at some point before they hit the age of 20, according to Washington University research cited in this New York Times article. More than one-fifth of the people living in Washington, D.C. and Mississippi use food stamps, according to Democracy Now.

Our Child Poverty Rates Are High

Chart source: Child Poverty League

Poor kids are more likely to be unhealthy. Thanks to the ‘paradox of hunger and obesity,’ they’re also more likely to be poor. With expensive medical care, that poor health only feeds poverty and debt, creating a vicious circle.

Here are some more jarring child poverty statistics, from the National Center for Children in Poverty:

* Children comprise 25% of the US population, but 36% of impoverished people.
* 41% of all children (25.4 million) live in low-income families.
* 46% of toddlers (5.9 million) live in low-income families.

America is in Serious Debt

The Wikimedia Commons chart above shows countries’ foreign reserves minus their external debt. The charts below show how sharply our debt has increased during recent years.

Can you imagine the interest that comes with that debt? To cover it, we either need to print more money (a la QE1, 2 and 3) and/or increase taxes. In a sense, inflation is an “invisible tax,” too. When everything gets more expensive because of said interest payment management systems, we foresake spending money on other things. In a consumer spending-driven economy like ours, this makes me wonder how we’re going to pull off economic improvement at all.

We Heart Consumer Debt

Chart source: Zero Hedge

We, the indebted citizens of this indebted country, are taking on reams of individual debt to support the consumer spending that props up our indebted nation. Cashing out on refinances and home equity lines of credit fueled this problem in the noughties. More recently, consumers have been closing credit card accounts and saving money, mostly to fortify themselves in the face of steady unemployment and inflation, and also because it’s harder to get a loan from the bank or a HELOC. You might think this would hurt consumer spending, but the truth is that in an economy with as uneven a distribution of wealth as ours, the people on top who hold most of the money can actually bolster consumer spending more than the shrinking pool of middle-class savers.

We Don’t Perceive Inequality

Chart source uncertain, but it was featured in both Mother Jones and the Washington Post.

Americans have always been an optimistic bunch. But does the deluded belief that a thin crust of people at the apex of the wealth pyramid don’t actually hold most of the country’s wealth, that it’s more evenly distributed than that, count as optimism? Or is it more of a foam pad to keep us from realizing that our country is actually a plutocracy?

If you’ve ever wondered why everyone around you seems to be downwardly mobile, but Wall Street keeps going up, the chart below might explain it.

(Chart source: Business Insider)

I want to like trains. I like riding them, both here and abroad. You can get work done while sitting on the train; you don’t have to worry about traffic jams or bad driver behavior, let alone parking. They’re good for the environment and make life easier on everyone, right?

Not so much. With Obama’s exaltation of the transport, I decided to research the costs and benefits of high-speed rail in more detail. As it turns out, they’re not that green, not that efficient, and, in many ways, not that great. Here’s a breakdown of what I found.

High-Speed Rail Looks Good on Paper

More jobs, fewer cars, and economic stimulus around train stations. Those are the selling points of a high-speed or commuter rail system. Here’s the lowdown on rail’s pleasant benefits:

• Building and maintaining railways will create thousands of jobs. This government job stimulus program could provide much-needed employment across the country.

• Rail infrastructure ideally stimulates both walkability and economic growth in a city. The logic goes that businesses and restaurants will burgeon in areas frequented by rail riders. In my own neighborhood, there’s a light rail project underway that would enliven the whole area. We expect development to follow the installation of the rail, especially given the number of commuters and students that would probably use it, avoiding traffic in the process. The rail infrastructure, in other words, would add value to our neighborhood.

• As urbanization increases, trains will make more sense. One counter-argument to trains is that the population in America simply isn’t dense enough to make them viable. But more and more people are moving to cities. From this USA Today article:

“Right now, there are about 6 million households that live within half a mile of stations,” says Shelley Poticha, president of Reconnecting America. “The demand for housing near transit is going to grow to over 16 million. That’s a big number.”

• A high-speed train can improve peoples’ quality of life. A bullet train from, say, San Francisco to San Diego would mean wonders for commuters, college students, families, and anyone else who doesn’t want to deal with the airport while still making it to their destination quickly (San Francisco to LA would take an estimated 2.5 hours on a high-speed train).

• As long as the rail systems are priced right, people will have less incentive to drag their cars onto the road. The number of drivers will go down, ideally mitigating traffic jams. ($5/gallon gas could also boost rail ridership.)

Green? Think Again.

As nice as they sound, “…passenger trains in the US today (including rail transit) are not much more energy efficient than the auto,” writes David S. Lawyer in this report. This is in part because of government policy. “From the late 1930′s through the 1960′s diesel passenger trains were significantly more energy efficient than the auto,” writes Lawyer. “During World War II they were 2 to 3 times as energy efficient. Then in the 1970′s, federal mandates greatly improved the energy efficiency of the auto. There were no federal mandates to improve rail energy-efficiency.”

Efficiency can be improved. The US freight train system proves as much. We have the best freight train system in the world, according to Coyote Blog’s Warren Meyer. The system is “green” and efficient. But you can’t easily share freight rails with commuter rails, he says, compounding the work it takes to prop up a commuter train.

Countries in Europe are also making big strides in passenger rail efficiency. California’s high-speed rail system is proposed to be carbon neutral.

But if we’re going to put years of blood and sweat into making commuter trains more efficient, we have to pay for it. And that’s not factoring in the estimated cost of $132 million a mile (on the high end) of building and running the inefficient ones. It brings us back to the question that everyone in America is asking almost every day: “Where’s the money going to come from?”

More Problems With High-Speed Trains

A high-speed train looks good on paper, but is much more expensive and complicated in execution. Jumbled zoning ordinances, for example, would make a San Francisco-LA rail line incredibly complicated to construct, according to a MasterPlanning article.

Where there is red tape, there is pork, and the government’s $900 billion California high-speed rail plan is one piece of proof. Warren Meyer again:

Rather than focusing either on LA or SF, Congress apparently appropriated the money for a mostly rural district that just coincidentally had a Democratic Congressman embroiled in a difficult election. So now Congress has dedicated a billion dollars of your money for (a) high speed rail line…from Borden to Corcoran. (There is also) the practice of building even one useless section as a way to commit the public to building the whole thing.

And to pad corporate pockets (GE, anyone?), and those of unions, and anyone else who happens to be lobbying the cause. If rail’s execution were smooth and practical, the painful costs associated with http://economix.blogs.nytimes.com/2009/08/04/running-the-numbers-on-high-speed-trains/ might seem more palatable. But real life doesn’t reflect that.

How About a Smart Transportation Grid?

In some places, high-speed rail makes a lot of economic and environmental sense. The city is walkable, or riders can transfer to a light rail and not worry about parking fees or transportation to their final destinations. In other places, it doesn’t make much sense at all. Other forms of transportation, like buses, which are much more energy- and cost-efficient than trains, might make more sense there.

There’s a lot of talk about the smart energy grid. What about smart transportation? Instead of pursuing blanket assumptions about the benefits of high-speed rail across America, the Obama administration would do well to figure out where such systems make sense and where they don’t. It would also help to make building and maintaining them more efficient, and less red-tape intensive. But perhaps those suggestions are as idealistic as the idea that high-speed rail is always a good idea.

Oil prices are levitating; as a result, everyone is freaking out about food. Food prices, that is, which threaten to increase more (and cause riots, and shortages, and all those other fun aftereffects) as oil climbs the stairway to heaven.

I recently wrote a couple of articles for a Minyanville feature package on food prices. Here’s a sum-up of their findings on food prices:

Corn, sugar: Pray for good weather and a loss of government interest in ethanol* so that corn prices don’t skyrocket. Sugar is in a similar situation.
Meat: Due to rising prices and production constraints, chicken is set replace beef as America’s meat of choice over the next decade.
Wheat, dairy: Wheat prices look like they might actually go down. So do dairy prices. Both, however, are strongly linked to corn prices.
Fruit, veggies, vegetable oils (and products containing them), and even beer stand to increase.
Coffee, ironically, is in the scariest situation, if you happen to be an addict. Hoarding coffee might be a very good idea.

Minor food price increases, at the very least, seem to be in the cards for most foods no matter what the global (weather, political, and economic) climate. Spikes, as is generally the case with commodities, may or may not materialize, though coffee price hikes are pretty much guaranteed. One company, Japanese food ingredients giant Ajinomoto has had revamped its operations recently to tackle rising prices.

Are food prices worth the worry? A better question might be “how pessimistic are you?” Or perhaps “do you have a disposable cash stash, just in case?”

Taken in concert with the rate at which Americans are now using food stamps, unemployment, and the general national situation, food-price prognoses currently have me in Camp Worry.

*when pigs fly.

How does the US measure up in terms of immigrants? Pretty well, according to MIPEX:

* The US received a “slightly favorable” overall score.

* It’s easier for immigrants here to naturalize than in most EU countries (this includes having a baby in the US).

* We have more policies to ensure equal treatment of immigrants than most EU countries.

* The survey shows that the US and most of Europe gives decent worker rights to immigrant workers (I assume they’re talking about legal immigrants).

* Long-term residence permits are much harder to get than in Canada and some of the EU.

* It is hard for immigrants to participate politically in the US–but it’s even harder in Canada.

* Education opportunities for immigrants in the US are not that good, especially compared to Scandinavia and Canada.

The relatively positive results remind me of this Reason infographic (click image for larger version). Apparently, if you can make it through the red-tape hamster wheel below, your situation is okay:

Libya exploded last night. Protesters, tired of not seeing their country’s wealth trickle down, burned and looted in Tripilo, the country’s capital. At least 200 people are reported dead, and Dictator Moammar Gaddafi’s son warned of anarchy if his father is overthrown (looks like it’s already arrived). Libya is the world’s twelfth-biggest oil producer, and oil is at a 2.5-year high today. Zero Hedge sums it up:

…output at one of the country’s oil fields reported to have been stopped by a workers’ strike, BP has said it will soon begin evacuating some of its personnel from the 9th largest producer of oil. And just to complete the total chaos, Iran warships are now going to pass the Suez on Tuesday instead of today, to the full glory of a fully open US stock market. The result: gold over $1,400; silver over $33.50; Crude front month over $93; Brent (crude) over $105; etc. Luckily, the US stock market is closed, meaning all this will be “priced in” by tomorrow

Brent crude oil is highly desirable as a diesel fuel and petrol source, according to the BBC. Commodities traders also like it for this reason. So even if Libya doesn’t produce the most oil in the world, its oil is very good and comparatively powerful on markets.

Europe is Libya’s biggest customer. From the BBC:

Brent crude jumped 1.75% in early Monday trading to $104.25 a barrel, its highest level since before the 2008 financial crisis. European energy companies are evacuating some staff from the country, which is a major oil and gas producer for the European market….Italy buys about one-third of Libya’s oil and gas exports, making it the country’s biggest customer by far.

Commodities markets are worried about more than just Libya, with the threat of unrest escalating in Iran – the second biggest oil producer in the Organisation of Petroleum Exporting Countries (Opec). There is nervousness that even Opec’s biggest producer, Saudi Arabia, may yet succumb to instability, although the autocratic regime there has yet to witness any protests. Libya is responsible for only 2% of all oil production worldwide, although its share of the European market is estimated at 10%.

The Guardian has more on the Libyan government’s international economic exposure, which, thanks to close ties to Italian demagogue Silvio Berlusconi, is heavy on Italy:

Libya’s vast oil reserves have enabled it to invest more than $70bn (£43bn) around the world – making it a major shareholder in companies such as the Financial Times, Fiat and Juventus football club. The Libyan Investment Authority (LIA), the crisis-stricken country’s main financial vehicle, spent £224m on a 3% stake in Pearson, the education group behind the Financial Times, last June.

(Italian investments) include a stake of about 2% in Fiat, 7.5% of Juventus football club, a 2% stake in – and joint venture with – Italian aerospace and defence group Finmeccanica and 7.5% in UniCredit, the bank.

Italian stocks are leading current losses on European markets. Crude futures for March were up to $89.30 a barrel in European markets today. “‘Compared to Tunisia (a minor crude exporter) or Egypt (not an exporter but a transit country), instability in Libya is a major concern to the oil industry,’ said analysts at JBC Energy in Vienna,” according to the Canadian Press.

If increased oil prices are good news for anyone, it’s the Gulf States, which are already recording multibillion dollar budget surpluses as a result of recent price increases. But with regional instability the way it is, nobody’s going to be able to accurately gauge the full economic fallout until everything has settled down again, a process that may take months, or even years.