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December 28, 2007 (LPAC)--The impact of the global financial crash on the American economy, its remaining physical production, is becoming more and more severe because of the lack of any Congressional acknowledgment of that crash, or action to create "firewalls" to protect the real economy from it.

At least 16 U.S. states have suddenly found themselves in budget crises due to drops in tax revenues, and in two of them, California and Kentucky, the governors have announced they will call "fiscal emergencies." The reasons are spiking unemployment, Medicaid costs, as well as the rapid vaporization of housing-related taxes and fees due to the mortgage meltdown.

As 2007 ended Ford and Chrysler had placed 26,000 production employees on "temporary layoffs" in December, set to last at least through January, and potentially to become permanent. General Motors, which in 2007 "bought out" 46,000 GM and Delphi workers from the industry, announced it's getting rid of 5,000 more by the buyout route. All three automakers have cut their production for the first quarter of 2008 by another 10% or so as sales fall. Employment in the auto industry fell by 75,000 during 2007. New unemployment claims have been running at 345,000 per week in December, 15% higher than earlier in 2007.

Today's announcement of November new home sales by the Census Bureau was disastrous; sales fell to a 647,000 annual rate, when only on September 18, the Homebuilders Association warned gloomily that they might fall to 800,000 by the end of the year! So many "pending sales" have been falling through, that previous months' figures have been revised down, to where the sales were already well below the 800,000 rate even in September, when the Homebuilders were making their "forecast." The November sales figure is the lowest for any month in 12 years.

And durable goods orders for the U.S. economy, also announced today by the Commerce Department, are at $207 billion for November, a full 10% lower than November 2006. This drop is not adjusted for inflation, or for the falling dollar. It's purely and simply the falling economy. The only way to rebuild it, is blocking the crash with the Homeowners and Bank Protection Act and nation-to-nation New Bretton Woods agreements, building new infrastructure as per LaRouche's Economic Recovery Act.