Unemployment timebomb

A bomb of time would surely be found in the Dr Who universe, but in the UK Telegraph (via D&S), Ambrose Evans-Pritchard, lays out how we are about to enter Phase II of the GFC where the situation begins to emulate the Depression. Highlights:

The Centre for Labour Market Studies (CLMS) in Boston says US unemployment is now 18.2pc, counting the old-fashioned way. The reason why this does not “feel” like the 1930s is that we tend to compress the chronology of the Depression. It takes time for people to deplete their savings and sink into destitution. Perhaps our greater cushion of wealth today will prevent another Grapes of Wrath, but 20m US homeowners are already in negative equity (zillow.com data). Evictions are running at a terrifying pace. […]
This is the deadly lag effect. What is so disturbing is that governments have not even begun the spending squeeze that must come to stop their countries spiralling into a debt compound trap.
French president Nicolas Sarkozy, with a good nose for popular moods, says: “We must overhaul everything. We cannot have a system of rentiers and social dumping under globalisation. Either we have justice or we will have violence. It is a chimera to think that this crisis is just a footnote and that we can carry on as before.”