December was the worst month yet for unemployment. But you wouldn’t know that from looking at headlines or at Wall Street. It is as if investors can’t read the writing on the wall.

On January 8, the U.S. Bureau of Labor Statistics reported seemingly fantastic news. The unemployment rate held steady at 10 percent for the month. People cheered: The bottom is in. But beneath the headlines, the numbers tell a very different story. Americans would do well to listen.

What most media pundits missed was the fact that even though the unemployment percentage stayed steady, America still lost tens of thousands of jobs—85,000 to be exact.

How is it possible to lose so many jobs and have an unemployment rate that holds steady?

The answer is that—in the world of government statistical make-believe—America supposedly has fewer people looking for work. Why does America have fewer people looking for work? Not because they found jobs, or won the lottery—but because they failed to search for work in the four weeks preceding the survey. Thus the government doesn’t include them as unemployed.

There were 661,000 of these discouraged worker-hopefuls without jobs in December.

To get a complete sense of how bad the unemployment situation is, you also need to account for those workers who have been forced to work part-time because they cannot find full-time employment.

When these people are also included in the unemployment rate, a whole new vision of America appears. And it isn’t a pretty picture. The ranks of the unemployed and underemployed now make up 17.3 percent of the total workforce. In reality land—the land where the bills need to be paid and the children fed—this is the number that matters.

America is headed for another fall.

On Christmas Eve (a date selected for maximum stealth) the government unveiled plans for perhaps the grandest taxpayer fleecing yet: the unlimited bailout of Fannie Mae and Freddie Mac.

Government officials said they wanted to “leave no uncertainty about the Treasury’s commitment to support these firms as they continue to play a vital role in the housing market during this current crisis.”

What is really disturbing about the above statement is the fact that Congress had already given the two subprime mortgage garbage dumps an astounding $400 billion line of credit. And, lest you think $400 billion isn’t very much: It’s equal to America’s total military budget for 2003.

So just how bad are Fannie’s and Freddie’s books? What do government insiders know about the future of America’s housing market that they are not telling the rest of us?

Perhaps they realize that foreclosures lag job losses and that massive waves of people will lose their homes over the next year. Perhaps they know that even people with prime mortgages are defaulting at record rates. Perhaps they know that as millions of homes hit the market over the next couple of years, prices are going to fall and the collateral backing the mortgages is going to evaporate. Perhaps they know that the majority of homeowners owe more on their mortgages than their homes are worth.

One thing they do know is that over a third of all the mortgages they have modified to try to keep homeowners in their homes have gone delinquent again less than six months later.

Chapter two of America’s great economic crisis is about to unfold.

The subplots are unfolding rapidly. On December 30, the government said it needed to bail out gmac again. gmac is best known as the lender that provides financing to those who purchase General Motors and Chrysler vehicles. What is not as commonly known is that it was also a big subprime mortgage lender. What is even less well known is that the government allowed it to become a bank so that it could borrow money cheaply from the Federal Reserve.

Three bailouts and $16 billion later, taxpayers are now the proud majority owners of a failing automotive lender.

The list of failing companies the government has used taxpayer money to buy is extensive. Taxpayers now own the two largest failed mortgage companies in the world (Fannie and Freddie), the largest failed vehicle lender in the world (gmac), chunks of two of the largest failed vehicle manufacturers in the world (General Motors and Chrysler), and the largest failed insurance company (aig).

What a portfolio of winners.

And if the economy continues to deteriorate, the losses that taxpayers could be exposed to could bankrupt the government.

But if chapters one and two aren’t bad enough, chapters three and beyond have many more surprises in store.

If the economy really was improving, we would expect to see an increase in commercial real-estate loans. The opposite is occurring. More than a year into the recession, commercial real-estate loans by banks are continuing to fall off the cliff.

The Baltic Dry index is plummeting again too. This index tracks how much it costs to lease a ship to transport goods across the ocean. Rates fall when ships are empty and few people are conducting business. It is a good indicator of the future direction of the economy—and the index is saying that global trade is shrinking again.

And now, with the onset of 2010, Social Security will for the first time go into the red. What this means is that the government will have to pay out more money to retirees than it takes in from current workers. For years, politicians have been looting the trust fund. It is now empty and taxpayers will be forced to pick up the bills again. And since America’s population is rapidly aging, the situation will only get worse.

The moral of the story is that the economy is not set to recover—at least not in any meaningful, lasting way. That is what the statistics say. More importantly, that is what God’s Word says.

God has said in His Bible that He will take away every one of America’s national blessings and replace them with curses—because of disobedience to Him (Leviticus 26). As Herbert W. Armstrong wrote in The United States and Britain in Prophecy, “We have to learn that material goods are not the source of happiness. … Our peoples have basic lessons yet to learn. The true values are spiritual.”

And just as the Bible prophesies of America’s fall from economic power, it reveals that Europe will emerge the big winner. Watch for the global economic balance of power to continue to move in Europe’s favor as America’s economic recovery proves to be a fantasy.