Archive for the ‘Economy’ Category
My goal with this piece is to be as objective as possible in ranking the actual economic performances of the six most recent Presidents, without letting my own political biases slip in.
In determining performance, more than just the raw numbers matter. For example, what was the situation inherited by each President? And did they leave the country heading in the right direction at the end of their Presidency?
Among the six most recent Presidents, clearly the best two in terms of economic performance
The two worst were Jimmy Carter and George W. Bush.
George H.W. Bush and Barack Obama are in the middle.
My ranking of the six most recent President from best to worst in terms of economic performance are as follows:
1) Ronald Reagan
2) Bill Clinton
3) George H.W. Bush
4) Barack Obama
5) George W. Bush
6) Jimmy Carter
Ranking Purely by the Numbers
If you looked purely at GDP growth under these respective administrations, the ranking would be as follows:
1) Bill Clinton: 3.6% annual GDP growth on average
2) Ronald Reagan: 3.4%
3) Jimmy Carter: 2.65%
4) George H.W. Bush 2.17%
5) George W. Bush 1.98%
6) Barack Obama 1.1%
If we calculate Presidential rankings by saying the first year’s GDP growth of the next Administration really belongs to the previous Administration, the rankings look like this:
1) Ronald Reagan: 3.54%
2) Bill Clinton 3.53%
3) Barack Obama: 2.3%
4) Jimmy Carter: 2.02%
5) George H.W. Bush: 2.0
6) George W. Bush 1.4%
The Case for Ranking Ronald Reagan Ahead of Bill Clinton
Objectively, you would have to say Ronald Reagan and Bill Clinton are tied in terms of the performance of the economy under their watch.
So why do I rank Reagan ahead of Clinton?
The reason is the economy Reagan inherited from Jimmy Carter and the Democrat-controlled Congress.
The U.S. economy shrank in the final year of the Carter Administration. Inflation also reached a high of 14.8% in March of 1980 under Carter, while the prime interest rate hit a peak of 18% that year.
“Stagflation” and “Misery Index” became part of the national lexicon.
The economy grew just .4% during Reagan’s first two years in office before his economic program of tax cuts and deregulation kicked in. Although Reagan’s tax cut program passed in 1981, Reagan’s tax cuts did not begin kicking in until the following year and were phased in over three years.
Reagan’s 1981 tax cut bill cut the top income tax rate from 70 percent to 50 percent.
Reagan then enacted a second round of tax cuts in 1986 that cut the top rate from 50% to 28%. If we omit the first two years of the Reagan Presidency from the GDP growth calculus, average annual GDP growth under Reagan becomes 4.3%
Remember also that Reagan had a Cold War to fight.
He engaged in an enormous defense build-up and bankrupted the Soviet Union. The price for that was to run up large budget deficits.
Bill Clinton had the luxury of no Cold War to fight. He had the benefit of the so-called “Peace Dividend.”
Not only was he free to scale back America’s military. But peace always helps the economy.
You also have to give a lot of the credit to the Republican-controlled Congress, which started in 1994. For six years of his Presidency, Clinton was boxed in by Republicans controlling both the House and the Senate.
Newt Gingrich and the Republicans simply would not allow President Clinton to spend as much money as he would have if it were up to him. Clinton even signed Newt Gingrich’s welfare reform into law, declaring that the “era of big government is over.”
Clinton is a pragmatist. So you have to give him credit for going along with Gingrich and the Republicans. But you can’t really call the good economy of the late 1990s Clinton’s economy either.
The economy certainly performed well under Bill Clinton. But you would be hard-pressed to point to any Clinton policy that caused the economy to perform so well. His primary legislative initiative — HillaryCare — was defeated.
Mostly, Clinton did nothing, or went along with what Newt Gingrich and the Republican-controlled Congress wanted.
Often doing nothing is great policy. The rule of good governance is: “First, do no harm.”
The U.S. economy was also rebounding in George H.W. Bush’s final year as President, growing at 3.4% in 1992 after shrinking .2% in 1991. So Bill Clinton inherited an economy that was gathering speed after a brief slowdown.
Bill Clinton had the good fortune of inheriting the Reagan economic boom and then a Republican Congress that protected Clinton from himself by not letting him change course.
Keep in mind also that Reagan’s economic growth numbers are dragged down by Jimmy Carter’s economy not just during Reagan’s first year, but really for the first two years of the Reagan Administration.
It’s fair, I believe, to call the first two years of the Reagan Presidency Jimmy Carter’s economy.
The economic boom America experienced in the final six years of his Presidency was clearly triggered by the Reagan tax cuts and massive deregulation.
Reagan turned the country around — transformed the Carter disaster into the longest period of continued economic growth(without a recession) in America’s history. Bill Clinton was more of a caretaker President. A Republican-controlled Congress forced Clinton to keep Reagan’s economic policies mostly in tact.
So the good economy kept rolling.
The Case for Putting Jimmy Carter and George W. Bush at the Bottom
Similarly, you would have to say that at least the first year of the Obama Presidency belongs to George W. Bush – when the U.S. economy shrank by 3.5%.
I’m certainly no fan of Barack Obama’s policies. I think his economic policies are wrong, are hurting the economy. But the 3.5% shrinkage of the U.S. economy in 2009 objectively belongs to Bush, not Obama.
So, objectively speaking, at this point we would have to rank Barack Obama’s economy ahead of both Jimmy Carter’s and George W. Bush’s. You could also make the case that George W. Bush left America in even worse shape than Jimmy Carter.
Here’s why I think Carter is the worst of the last six Presidents in terms of economic performance.
Jimmy Carter inherited a healthy economy.
Economic growth during the first two years of his Presidency was 4.6% in 1977 and 5.6% in 1978.
Economic growth during his final two years was 0.7% in 1979 and minus 0.3 percent in 1980. Inflation spiked up to 14.8%, the prime interest rate zoomed up to 18% so people could not buy homes or start new businesses.
So Jimmy Carter took a good economy and quickly turned it into the worst economy since the Great Depression.
George W. Bush also did this, inheriting a strong economy from Bill Clinton along with a balanced budget and turning that into an economy that shrank by 3.5% in 2009 and trillion-dollar annual budget deficits. It would be tough to get much worse than Bush. You can certainly make a strong case for putting Bush at the bottom, behind Carter.
At least Jimmy Carter did not get America into a trillion-dollar war by mistake.
The multi-trillion-dollar Iraq War certainly hurt the American economy and cost thousands of American lives. We would be far better off today with Saddam Hussein in power in Iraq than what we see going on there now. Saddam was a counter to the even worse Iran and a bullwark against al Qaeda-Isis-style terrorism.
Reagan sided with Saddam in the Iran-Iraq War — for good reason.
I’m starting to persuade myself that W. Bush might have been even worse than Carter.
But I remember the Carter economy. The 14% inflation rate, the 18 percent prime interest rate, people waiting in line to buy gasoline, and the unemployment rate at 7.5 percent and heading toward 10% as he was leaving office felt a lot worse than the W Bush recession.
Why I Rank George H.W. Bush Ahead of Obama
You can reasonably make a case for putting Barack Obama ahead of George H.W. Bush in the economic performance rankings.
George H.W. Bush turned a booming Reagan economy into a mediocre 2% growth economy – about what the economy is growing now under Barack Obama. He did this, in part, by increasing taxes, reregulating the economy, and undoing parts of the Reagan economic program.
He also launched an expensive war in Iraq that put a further drag on the U.S. economy.
Both HW Bush and Obama presided over an economy that’s growing at a rate of about 2% annually on average. The difference is Obama inherited a terrible economy from W, while Bush senior inherited a booming economy from Reagan and turned that into a mediocre 2% economy.
So that would seem to be “Case Closed” for ranking Obama over HW Bush.
But there’s also the natural business cycle that needs to factor in.
I would make the case that there is always a natural cooling of an economic boom, and that HW Bush had the misfortune of being in office on the downside of the business cycle.
Conversely, economies tend to rebound sharply after a recession, as should have happened after the Great Recession of 2008, but didn’t because of ObamaCare and massive regulation of the U.S. economy by Obama and his bureaucracy.
The so-called “recovery” under Barack Obama has been just 2.3% per year from 2010 on forward, since coming out of the recession. Typically, the U.S. economy grows 5%+ in the year following a recession.
Under Reagan, the economy grew 7.2% in 1984, following the Jimmy Carter recession.
That’s what should happen in a recovery.
That’s why I rank Barack Obama behind George H.W. Bush.
Bush did not do nearly as much as Obama to actively harm the economy.
Barack Obama is taking a sledge-hammer to the economy in the form of ObamaCare and massive regulation.
So far the U.S. economy is showing some resilience. At least it’s mustering some growth.
But recent signs are that even this meager 2% growth we’ve been experiencing might be coming to an end.
The economy in the first quarter of this year shrank a stunning 2.9%. This will make it very difficult to reach even a 2% growth level for 2014. If we have another consecutive quarter of shrinking GDP, America will be back in a recession.
This would put Obama down in Jimmy Carter and George W. Bush territory in terms of being among the worst Presidents in America’s history for the economy.
Also, the ObamaCare drag on the U.S. economy, I believe, is just beginning. The 2.9% Q1 2014 shrinkage of the U.S. economy occurred exactly in the same quarter that ObamaCare started taking effect.
I don’t think that’s a coincidence.
It’s also important to note that if we were measuring inflation the same way we measured inflation in 1980, the annual inflation rate is not 2%, but closer to 10%.
The true 10% annual inflation rate we are now experiencing is in Jimmy Carter Land.
The government keeps changing the way we measure inflation, unemployment, and GDP growth to make the government look like it’s not doing quite as miserable a job as it really is.
The reason I rank Obama behind George H.W. Bush is also my view that he’s moving America in the wrong direction. HW Bush was moving America in no direction. But no direction is better than the wrong direction.
I’m confident we would have had a much stronger economic recovery if it were not for all the uncertainties introduced by ObamaCare and the massive regulation of the economy, much of it by the EPA. We could be doing much better if the Obama Administration would allow more oil exploration on federal lands and would approve the Keystone Pipeline.
Also, much of the growth in GDP under Obama has been brought about through massive deficit spending.
So the meager GDP growth we’ve seen is phony — more like a sugar high, soon to be followed by a crash. I can live better and buy more if I run up massive credit card debt. But that’s temporary. Eventually, the piper must be paid.
So I would take HW Bush’s 2% GDP growth over Obama’s 2% GDP growth – because at least HW Bush was not generating this growth with massive deficit spending, at least nowhere near on the level of Obama’s deficit spending.
HW Bush ran up $1.03 trillion in debt during his four hears in office — not good.
HW Bush ran up the same amount of debt in four years in office that Reagan ran up in eight years.
But Obama makes HW Bush look like a piker on deficit spending. Obama has added $7 trillion to the federal debt so far — in just five years. The $7 trillion in borrowed money Obama has pumped into the U.S. economy is making Obama’s economy look better than it really is. Not that Obama’s 2% GDP growth is anything to boast about even if this were not an artificially high number inflated by massive deficit spending.
A big factor for me in ranking the Presidents is the direction the country is heading when they finish their term in office. Jimmy Carter and George W. Bush are at the bottom because the U.S. economy was clearly dramatically worse off at the end of their Presidencies, due in large part to their policies.
We still don’t know what America will look like after another 2 1/2 years of Obama.
Given ObamaCare, the mountain of new regulations he’s piling onto business and entrepreneurship, the unprecedented deficit spending, the steady devaluation of the dollar by the Fed’s printing press, plus a foreign policy in shambles on every front — the prognosis for Obama’s economy can’t be good.
The mainstream media and most financial analysts have been dismissing this one percent shrinkage of the U.S. economy as simply due to the colder-than-usual winter.
So I’ve been delving into the internal numbers of this GDP number a little deeper.
Turns out that if it had not been for all the consumer spending imposed by the Affordable Care Act kicking in (ObamaCare), the U.S. economy would have shrunk by a spectacularly disastrous Great Depression-style two percent.
So ObamaCare provided some artificial stimulus to the economy – by jacking up consumer spending, through force of law.
How did people pay for their ObamaCare premiums, which are on average 39 percent higher than premiums for their old insurance policies?
Probably by dipping into savings. In December of 2012, the personal savings rate stood at 8.7 percent and has been averaging a bit over 5 percent the last few years. The savings rate crashed to 3.4 percent in March of this year. Ouch!
No doubt Obama’s answer to the contracting economy is simply to require Americans to pay more out of their savings for their ObamaCare health insurance. Why not double everyone’s ObamaCare premiums?
That would have brought the economy back to zero growth.
The internal numbers on the economy get even worse the more you get into them.
We’re being told by the media that the future is rosy because consumer spending increase by 3.1 percent.
But almost all of this increase in consumer spending was on services, not on products. And almost all the increased consumer spending on services was on ObamaCare – that is, on paying ObamaCare mandated insurance premiums.
Another big component of the consumer spending number was increased spending on utility bills – heat – due to the cold weather. In other words, the cold winter helped boost consumer spending, thus also artificially inflated the consumer spending number.
By Obama’s logic then, the way to create better GDP growth numbers is to jack up everyone’s utility bills – which he’s doing by putting the coal industry out of business and shutting down America’s coal-fired electric plants.
The important consumer spending numbers were dreadful in Q1 – almost unimaginably bad.
American consumers actually reduced their spending on durable goods – such as autos and appliances – by 0.5%. This is consumer spending that matters for the economy because this kind of consumer spending leads to the building of more factories, leads to the creation of more jobs.
The numbers that matter for the economy are all disastrous – such as business investment and capital expenditures that are needed to generate economic growth in the future. For example . . .
- Investment in nonresidential structures decreased 7.5 percent.
- Real residential fixed investment decreased 5.0 percent.
- Real nonresidential fixed investment decreased 1.6 percent in the first quarter.
- Investment in equipment decreased 3.1 percent.
- Real exports of goods and services decreased 6.0 percent in the first quarter.
- Corporate profits after tax plunged at a 13.7 percent rate, the biggest drop since the fourth quarter of 2008.
In other words, it looks like the worst, slowest, and weakest economic recovery in American history is now over. So gird your loins.
37 Quickie Facts That Prove America Is Still In Recession . . . and Rapidly Becoming a Banana Republic
One of my favorite websites for learning the truth about the economy is Shadow Government Statistics by John Williams (http://www.shadowstats.com/). What Williams does is show what the economy is really doing based on ways we measured economic performance in 2000, 1990, 1980, etc.
By doing this, he shows us how the government keeps changing the way it measures economic performance in order to make the economy appear do be doing better than it really is.
Examples . . .
FACT #1: The Federal Reserve keeps telling us inflation is low. But if we measure the Consumer Inflation rate the way we measured it in 1980, according to Williams, inflation today is rising at a rate of about 9 percent per year, not the 1% or 2% the government is claiming.
FACT #2: We keep hearing that the U.S. economy (GDP) is growing at a rate of 1.5% per year — which is truly horrible when compared to the typical 4-6% annual growth rate we typically experience after recessions. But IN FACT, the situation is much worse than this. If we factor in the true inflation rate of 9% per year (see FACT #1 above), the U.S. economy has actually been shrinking every year since 2005.
But there’s more . . .
FACT #3: Median household yearly income in America has fallen five years in a row, now at $51,017, acccording to the Census Bureau — a drop of $4,600 since 2007. This is the lowest level since 1995 (adjusted for inflation). How can this be happening if we are in a recovery?
FACT #4: The drop in median family income is, of course, much worse than this if you use the true annual inflation rate of 9 percent (cited in FACT #1 above) — not the manipulated inflation rate.
FACT #5: The U.S. Census Bureau reports that one in six Americans today is living in poverty and 146,000,000 Americans are “either poor or low income.” The poverty rate in America today is 16 percent — higher than it was when the so-called “War on Poverty” was launched in the mid 1960s.
FACT #7: Americans receiving disability benefits have increased by 29 percent since President Obama’s inauguration in January of 2009 — from 6.3 million to 8.8 million.
FACT #8: Today, 47 million Americans are on Food Stamps, compared to 32 million on Barack Obama’s first day as President. That’s a 49% increase.
FACT #9: We now have more than 90,000,000 working-age Americans who have decided to leave the labor force — not because the economy is good, but because job prospects are so dismal. We now have the lowest work force participation rate in 35 years (since back in the days when most women did not work). The number of working-age Americans who are not working now totals more than 100,000,000.
FACT #10: About 500,000 more Americans are leaving the labor force every month.
FACT #11: Seven of eight jobs created during this so-called recovery have been part-time jobs. A big reason for this is ObamaCare. Employers don’t want to be saddled with the ObamaCare mandate that they provide employees with expensive health insurance.
FACT #12: 60% of the jobs lost during the recession were mid-wage jobs. But 58 percent of the jobs created since then have been low-wage jobs. So the Obama economy is trading good-paying jobs for low-paying jobs. In fact, one of every ten jobs in America is being filled by a temp agency.
FACT #13: The largest employer in America is Wal-Mart. The second largest is Kelly Services, a temp agency. Not that there is anything wrong with these companies. But this sure doesn’t look like the 27-year economic boom we saw from Reagan through Clinton.
FACT #14: The real unemployment rate is 11.1 percent if we use the size of the workforce as it stood in 2008, not the 7.3 manipulated rate the Obama Labor Department is reporting. And the more reliable U-6 measure (which includes those marginally connected to the labor force) shows the real unemployment rate still at around 14 percent.
FACT #15: Those being paid $10 per hour or less make up 25% of the American workforce.
FACT #16: To keep the U.S. economy marginally afloat, the Federal Reserve is printing about $1 TRILLION new dollars per year. The result is an astonishing decline in the value of the dollar. It’s why the prices of most commodities have increased by 50-100% or more since Obama’s first day in office. For example, gold has gone from $800 per ounce to $1,400 per ounce today (though down from its peak of $1,900 per ounce in 2011). The price of a regular gallon of gas for your car was $1.85 on Obama’s first day in office. The price of corn is up 100 percent under Obama. If you go down the list of raw materials traded on the Chicago Commodities Exchange (materials we all rely on to survive), we find an average annual inflation rate of near 20 percent during the Obama years. This tends to confirm the point in FACT #1 that the official inflation rate is a manipulated number that is complete fiction.
FACT #17: The number of people getting mortgages has dropped to the lowest level since October of 2008. This is not a good sign for the housing industry.
FACT #18: 60% of children in Detroit are now living in poverty. This despite the multi-billion-dollar government bailouts of GM and Chrysler. Something’s not right.
FACT #19: Contributing to Detroit’s woes comes news that 47% of Detroit’s adults are functionally illiterate — meaning they can’t read well enough to fill out a job application or perform basic adding, subtracting, and multiplying — can’t possibly fill out their income tax forms, for example. Even more alarming, half these illiterate Detroiters managed to secure their high school diplomas. In other words, the public schools are not working. Other large urban areas in America are heading down this road.
FACT #20: The U.S. Census Bureau reports that 57% of America’s children live in a “poor” or “low income” home.
FACT #21: Barack Obama says one of his goals is to spread the money around and to create more income equality. But it hasn’t worked out that way. CNBC reports that the 400 wealthiest Americans now have more money than the poorest 50 percent of all Americans combined. We see much more income inequality today than during the Reagan era.
FACT #22: The U.S. Census Bureau reports that the Middle Class is taking home a smaller share of America’s overall income than at anytime since this number has been tracked.
FACT #23: I was thinking the reason for such high joblessness might be that more Americans are self-employed today, so aren’t being counted properly in the unemployment rate figures. That’s one theory I’ve heard floated. Nope. Turns out the percentage of Americans who are self-employed is now at an all-time low.
FACT #24: The “velocity of money” under Obama has plunged to the lowest level since World War Two. “Velocity of money” is considered one of the most important indicators of an economy’s health. What’s happening, basically, is people are too affraid to risk their money launching new businesses. Instead, people have become more inclined to hoard their money or buy unproductive assets such as gold and silver.
FACT #25: The Obama Administration boasts that the economy is improving, citing the fact that jobs were actually added to the economy last month. The problem is the government added 324,000 workers while the private sector lost 278,000 jobs. So what’s happening is we’re losing productive jobs in the private sector (where all wealth is created) and gaining mostly UNproductive government jobs — paper-shuffling bureaucrats
FACT #26: The Washington Post reports that home foreclosure rates are still at Great Depression levels.
FACT: #27: Home ownership in America (now at 65%) is at its lowest level in 18 years. So the American Dream is quickly dying.
FACT #28: As Americans increasingly become home renters rather than buyers, rental prices today are at an all-time high. So it’s getting tougher for low-low income Americans to live anywhere.
FACT #29: Since his first day in office, President Obama has added $50,521 to the share of national debt for every household in America. Are you at all wondering how you’ll manage to pay off your share?
FACT #30: More than 1,000,000 public school students are homeless today in America. This is an all-time high and a 57 percent increase since 2007.
FACT #31: Health insurance premiums have risen an average of 29% under Obama. With ObamaCare now kicking in, these costs will only continue to accelerate upward, thus putting more even pressure on the economy and on American families struggling to make ends meet.
FACT #32: 76% of Americans say they are living paycheck to paycheck. That’s if they’re lucky enough to be getting a paycheck (which 100,000,000 working-age American aren’tmanaging to get).
FACT #33: The mortgage delinquency rate in America is now 9.4% — compared to 2% in 2000.
FACT #34: Total student loan debt has now surpassed $1 TRILLION — which means America’s brightest young people today can look forward to a lifetime of slavery to debt.
FACT #35: According to the Bureau of Labor Statistics, of the 146,000,000 Americans who have a job of some kind, just 116,000,000 Americans are working full time at this point — in a population of 313,000,000.
FACT #36: 108,000,000 Americans are currently receiving some form of means-tested welfare payments and benefits. This doesn’t include seniors receiving Social Security and Medicare. The U.S. has a population now of 313,000,000 million. This means more than one-third of America is on the public dole.
FACT #37: The Congressional Budget Office’s computer model cannot conceive of the U.S. economy continuing to exist beyond 2037 at the current rate of annual deficit spending by the federal government. In 2037, the national debt is projected to be double total U.S. GDP. At this point, the U.S. economy implodes in upon itself and ceases to exist. The CBO doesn’t explain exactly what this means. Whatever it means, it can’t be good.
You heard President Obama’s hysterical press conference yesterday about “catastrophic” spending cuts imposed by the sequester.
Note that federal spending still goes up every year under the sequester, even while household incomes continue to decline.
January posted the sharpest decline in personal incomes for Americans in 20 years, and the worst decline in after-tax incomes since 1959. American households have lost nearly $5,000 in annual income under Obama. But the federal government continues to grow and spend more regardless.
The federal government is now borrowing 46 cents out of every dollar it spends. If Obama were really concerned about the “children,” as he always claims, he’d be concerned about the mountain of debt he’s piling onto their backs.
Every baby born today in America owes $55,000 on the national debt debt. This number doubles every seven years at the current rate of spending.
If Republicans in Congress cave on this modest spending restraint mechanism known as the sequester, there really is no hope for the country.
Here was Obama’s presser on the sequester . . .
Two straight quarters of shrinking economic growth means we’re back in a recession — yup, ye ole “double dip.”
For the entire year of 2012, official U.S. GDP growth was only 1.5%.
Most recessions are followed by economic growth rates exceeding 4 percent. So this so-called “recovery” is moving at about one-third the pace of normal economic recoveries. But now the economy is shrinking again.
Meanwhile, the unemployment rate ticked back up to 7.9 percent, which means that the unemployment rate is now higher than on Obama’s first day in office.
Here are some more facts that should shock you . . .
- Since Barack Obama’s first day in office, 8.4 million Americans have left the labor force because they believe looking for work is a fruitless exercise.
- If the unemployment rate was calculated based on the portion of the population in the work force in 2008, the unemployment rate would be 10.2 percent.
- Under the Obama Presidency, the number of Americans on Food Stamps has risen from 32 million to 47 million.
- The Census Bureau informs us that 146,000,000 Americans (40 percent of the population) are now “poor” or “low income.”
- Under Obama, median household annual income has declined by $4,600.
- On Obama’s first day in office, the price of a gallon of regular gas was $1.84. Today it’s $3.51 on average across America (an all-time high for February).
- Electricity prices have risen faster than the rate of inflation every year of the Obama Presidency.
- Obama promised ObamaCare would reduce health care costs. But health insurance costs have risen 29 percent since Obama’s first day in office, mostly due to costs on insurers imposed by ObamaCare.
- Today, 77 percent of Americans live paycheck-to-paycheck.
- In America today, 41 percent of all workers make less than $20,00 per year.
- Obama has added $6 TRILLION to the national debt — which now stands at $16.4 TRILLION.
But the mainstream news media keeps talking about this economy as in “recovery.”
And America reelected Obama for another four years. Apparently, most Americans are satisfied with the current state of the union.
I favor going over the fiscal cliff. No more talks with President Obama.
It’s about time the American people (including the Middle Class) start paying for the government benefits they are demanding.
Going over the fiscal cliff means we start making that happen.
Today, the federal government is borrowing 42 cents of every dollar it’s spending. We now have a $16.4 TRILLION national debt.
Obama’s own budgets propose adding a $1 TRILLION+ to the national debt every year for as far as the eye can see.
This means the American people are enjoying lots of benefits from government without paying for them. We are passing the bill onto future generations.
That’s not fair. And it’s immoral.
Assuming there’s no fiscal cliff deal (I hope there isn’t) the tax bill for the median family or household will increase by about $3,500 in 2013.
Some mandatory spending cuts also kick in. I’m all for that.
Now, if it were up to me, I’d cut the entire federal budget by about two-thirds.
That’s about what it would take to scale our federal government back down to Constitutional size. But that’s not what the American people are voting for.
The American people want more from the government. So it’s time they start paying for it.
When you really think about it, the fiscal cliff IS the compromise.
Obama wants no spending cuts, only tax increases.
People like me want all spending cuts, no tax increases. In fact, I want tax cuts plus spending cuts, while Obama wants more spending and more taxes.
So there’s no possibility of any meeting of the minds in further discussions with Obama.
We just have a very different (polar opposite) philosophy of that the proper role of government is.
With the fiscal cliff, we get some tax increases and we get some real spending cuts. We begin the process of bringing the federal budget back into balance.
So that’s the compromise. It’s the compromise Barack Obama, John Boehner, and Harry Reid all agreed to in 2011.
It’s the compromise both chambers of Congress voted for. So let’s stick with that.
Even at this rate (of fiscal cliff-scale spending cuts and tax increases) it will take decades before we actually start paying down the national debt. But at least we’ll be heading in that direction.
But something eles may happen when we go over the fiscal cliff – something good.
Once the median family’s tax bill goes up $3,500 in 2013, more voters will start to wonder if all this government they are asking for is really worth it. As long as they can push the bill for all this government onto future generations (who have no vote), it’s fun to accept all these goodies from the government . . . because they seem free.
I’d love to have a credit card that allowed me to spend as much as I want, and have someone else in the future pay for all my spending. What a gas that would be!
That’s exactly what Congress and President Obama are doing.
At least the fiscal cliff imposes some discipline — on both Washington and the American people. Not much, but some.
Will we double-dip back into another recession if we go over the fiscal cliff?
Yup. Probably. Almost certainly . . . because the government’s credit card spending will be curbed.
When you hit your credit card limit and you’ve been living off your credit cards, your lifestyle is going to take a hit.
That’s what will happen if we go over the fiscal cliff and don’t raise the federal debt limit.
It’s tough medicine. But it is medicine. It’s ultimately good for us to live within our means. But that can be hard.
The endess deficit spending without consequences must end.
It will end eventually. The question is: When?
Will the spending end when the economy completely collapses, like a house of cards, under the weight of debt?
Or will some fiscal discipline start now — when we still have a country we can save?
I vote for starting now — which is why I hope we go over the fiscal cliff.
I vote for going over the fiscal cliff because it’s immoral to pass the bill for all these government benefits onto my children and grandchildren. It’s time to pay the Piper.
The recent election seems to indicate that America is probably over.
Unlike in 2008, we can’t say the American people just did not understand who they were electing — a socialist (at a minimum), but more likely some kind of Bill Ayers, Jeremiah Wright, Frank Marshall Davis, Saul Alinsky, Anita Dunn, Van Jones, ACORN-style neo-Marxist.
Americans knew exactly what they were doing when they reelected Barack Obama.
In 2012, America clearly chose more socialism, more deficit spending, a lifetime of debt for our children and grandchildren, and a future that looks like Greece, Venezuela, or worse.
And the election wasn’t that close. The only states Mitt Romney carried that John McCain didn’t were North Carolina and Indiana.
We have become “Food Stamp Nation.” We have become the “Entitlement Society.”
Goodbye “land of the free.”
On July 4, 1776, America declared its “Independence” from the British Empire, and fought a seven-year war to achieve that.
November 6, 2012, will mark the day that today’s Americans declared that what they really want is “Dependence” on Big Government. Most Americans don’t want “Independence” and freedom any more.
So let’s be honest and cancel July 4th celebrations — Independence Day . . . because we now have November 6th — “Dependence Day.”
Most Americans prefer to be “taken care of” by a busy body Nanny State.
Consider these discouraging facts on the state of American public opinion . . .
- A Washington Post poll shows 54 percent of the American people trust Obama more than the Republicans in Congress on the economy. Only 34 percent trust the Republicans more than Obama on the economy.
- The same poll shows six in ten Americans opposed even to raising Medicare eligibility from age 65 to age 67 as a way to save money.
- 60 percent say any changes to Social Security are unacceptable — such as raising the retirement age for receiving Social Security benefits.
- Only 29 percent of Americans think the best way to reduce the budget deficit is to cut spending.
- 74 percent support raising taxes on Americans earning more than $250,000 per year.
- 54 percent support increase taxes on Americans earning more than $50,000 per year, such as by phasing out or eliminating the mortgage interest payments deduction.
- A new Rasmussen poll shows only 37 percent of Americans consider themselves “fiscal conservatives.” The rest just want to keep on spending — keep spending about the same, or spend more.
Obama has made it clear he will accept no spending cuts whatsoever as part of the fiscal cliff negotiations, just tax increases and more debt. That’s his answer to the $17 TRILLION national debt — soon to be $20 TRILLION, then $30 TRILLION.
Yet the American people clearly like his approach far more than House Republican efforts to restore some fiscal sanity to our spending mess.
Americans appear willing to accept the current 7.8 percent unemployment rate as the new normal. The unemployment rate is over 10 percent if you use the size of the workforce that existed on Obama’s first day in office.
The U.S. economy is growing at a rate of about 2 percent a year — barely enough to keep up with population growth, and half the rate of the average economic recovery following a recession.
Almost all this meager economic growth we are seeing is occurring from government spending — that is, by deficit spending.
Almost none of the economic growth we are seeing is coming from the private sector — the wealth creating sector.
Growth that comes from government deficit spending is not real growth. I can live better for a while by running up my credit card charges. But at a certain point, my financial world implodes.
That’s how the Obama economy is achieving even the pathetic growth we’re now seeing.
The annual income of the median American household has dropped by $4,300 under the Obama Presidency.
But Americans appear satisfied with this state of affairs. Americans are giving Obama high marks for this performance.
So where’s the hope for a better future?
I’m not seeing any.
Will Republicans and conservatives win any victories in the future?
Sure, we will. We’ll win some victories here and there.
But the long-term trend is downward. The Republican candidate for President has won a majority of the popular vote just once since 1988.
What makes you think things are going to get better?
Unless we figure out away to get at least 40 percent of the Hispanic vote instead of the 27 percent Romney got, we’re doomed.
American voters are making it very clear what they want, repeatedly.
What they want is clearly not freedom.
Americans just don’t value freedom and opportunity much anymore.
They want to be taken care of by the government. And they don’t care much about what kind of a country they leave for their children and grandchildren.
Americans won’t accept one penny of cuts to their benefits even if it means saving America for future generations.
The truth is, we could solve the budget deficit crisis pretty quickly if we just . . .
1) Increase the age of eligibility for receiving Medicare and Social Security from 65 to 70 and then index that to increasing life-expectancy.
The average life expectancy in 1949 in America was to age 66.
This means people could expect to receive Social Security benefits for one year on average.
Today, the average life expectancy is age 76. But many are living into their 90s.
I’m 54 years old. I fully expect to be working until I’m dead or incapacitated . . . because I love doing what I do. I can’t stand the thought of retiring. To do what? Play golf?
How many hours a day can I play golf?
I plan on working for as long as I’m physically able to do so . . . because I love working. There’s just not enough time in life to do all I want to do.
We need to raise the age for receiving Social Security and Medicare to at least age 70 and then index the eligibility age for participating in these programs to average life expectancy, which increases every year.
Those reforms alone would mostly solve our deficit problem.
2) Cut defense spending by one third.
America now spends $950,000,000 a year on defense. That’s nearly $1 TRILLION, or about 26 percent of our $3.8 TRILLION yearly federal budget.
Right now, 43 percent of the entire world’s military spending is, well, us. We are spending six times more on our military than #2 China.
We are spending 14 times more than Russia. Both Britain and France spend more on their military than Russia.
Russia is really just a Third World country, no longer much to worry about.
There’s no Hitler on the horizon and aircraft carriers are not needed to kill terrorists.
Surely the 12 aircraft carriers we now have are enough.
No other country in the world has more than two aircraft carriers. China and Russia each have one aircraft carrier.
The main threat to us is terrorism. Aircraft carriers and enormous standing armies are not what we need to defeat terrorism. What we need to defeat terrorism are excellent intelligence, more special ops forces, more drones, and the like. But these are not high-ticket items, like aircraft carriers.
President Eisenhower (no liberal) warned America about the “military industrial complex” and the threat it presents to our liberty and wallets.
But that Washington Post poll shows that most Americans don’t want any cuts to our military either. Americans want no cuts whatsoever to anything government is doing.
The U.S. government today is borrowing 42 cents our of every dollar it spends.
But Americans won’t tolerate even modest common-sense budget reforms to put America’s fiscal house in order and save the country for future generations.
Today, it’s all about how much free stuff can I have right now from the government before the American economy completely implodes under the weight of this $17 TRILLION debt that’s going up $1 TRILLION every year, with no end in sight.
Add to this $500,000,000,000 new dollars the Federal Reserve continues to print every year like confetti. Because of all this new money the Federal Reserve has been printing under Ben Bernanke and Obama, the value of the dollar has declined by 40 percent (compared to gold and other commodities) since Obama’s first day in office.
Americans knew exactly what they were doing when they voted to reelect Obama for another four years. They want to party on someone else’s dime until the money runs out and the economy implodes.
So I’m going to be changing the focus of this blog.
This blog is no longer going to be much about day-to-day politics.
I really don’t care much what happens in the fiscal cliff negotiations.
Ideally, we will go over the fiscal cliff. We should not be negotiating at all with Obama. We should just let the fiscal cliff happen.
We should let the automatic spending cuts kick in along with all those tax increases that will also kick in on January 1 . . . because Americans should at least pay for the all the government they are demanding — not pass the bill onto future generations.
But this blog won’t be focusing much anymore on all that.
Instead, I’ll mostly focus on steps you can take to save yourself and your family from the coming inevitable economic collapse.
America appears to be over — at least for the foreseeable future.
If America is ultimately to be saved, things will need to get a whole lot worse before they get better.
Americans will need to experience true full-bloom socialism before they reject it — much as has happened in Eastern Europe. Americans will need to find out what it’s like when most of the federal budget is dedicated to paying for the national debt.
Americans will need to find out what it’s really like to lose freedom before they start to value freedom again.
It’s no fun having government bureaucrats micromanaging every aspect of your life.
People would rather live in the woods with nothing than stay in the prison.
To save America, perhaps then we should just let Obama and the Left have what they want.
Let them quickly turn America into Greece or Cuba . . . and then see how Americans like it.
Meanwhile, we can continue to talk about freedom and first principles, as articulated in America’s Declaration of Independence. Then perhaps Americans will eventually return to that . . . because it was, after all, freedom that made America the most prosperous nation in human history.
Until then, until the American people learn what socialism (prison) is really like, and start to value freedom again, it will be like “Moses in the Wilderness” for us who believe in the original American idea of limited government.
Grover Norquist has been catching a lot of heat lately for holding politicians to the pledge they signed not to vote for any net tax increases.
He was the Best Man at the wedding for my first marriage on October 10, 1987.
He may be the smartest political mind I know.
Here’s how his “No Net Tax Increase Pledge” came about.
Way back in 1984 or 1985, I was having dinner with Grover and several others at Gallagher’s on Capitol Hill when he (we) conceived of challenging all federal elected officials and candidates for federal office to sign such a pledge.
Drinks and dinner at Gallagher’s back then with Grover and our little group of pro-freedom activists was a near-nightly event — as none of us were yet married. We’d get together almost nightly to plot and scheme the rollback of socialism and big government, plus tell jokes and laugh a lot.
One of our big complaints was that President Reagan just wasn’t moving fast enough to shrink the federal government back down to Constitutional size — which would mean cutting the size of the federal government by about two-thirds. ”Why isn’t Reagan even trying to eliminate the Departments of Education, Energy, Labor, Commerce, HUD, and much of Health and Human Services?” we’d wonder.
One night, I mentioned to Grover that I grew up in Vermont and New Hampshire.
In the 1970s, New Hampshire had a great conservative governor by the name of Mel Thomson.
This then became a tradition in the state.
After that, you could not hope to win your race for Congress, for Senate, or for the Governorship in New Hampshire without putting your hand on a Bible and pledging never to vote for instituting an income tax or sales tax.
New Hampshire financed its government with a fairly stiff property tax, state-owned liquor stores, and assorted user fees.
New Hampshire has changed a lot since then. People from Massachusetts have since moved into New Hampshire to escape high taxes in Massachusetts — only to vote for Democrats and higher taxes in New Hampshire.
Southern New Hampshire is now a suburb of Boston.
So New Hampshire has become a purple state instead of a solidly red state.
But back in the Mel Thomson days (the 1970s) Dartmouth economics professor Colin Campbell conducted a study comparing the quality of government services in Vermont versus New Hampshire.
The study made sense because the states are mirror images of each other geographically and demographically. But a Vermonter paid 40 percent more taxes on average than a New Hampshirite.
Professor Cambpell’s study found, however, that government services in New Hampshire were superior to Vermont’s. And New Hampshire’s government was collecting more tax revenue.
How can this be?
Well, Professor Campbell concluded that the business climate in New Hampshire was superior to Vermont because of New Hampshire’s low (almost non-existent) taxes.
So, given a choice, why pay 40 percent more in taxes just to live in Vermont?
As a result, business boomed in New Hampshire, and New Hampshire was able to attract triple Vermont’s population.
All this economic activity then generated more tax revenue for the government of New Hampshire to spend on public services.
Grover (at our 1985 dinner at Gallagher’s) was very interested in Governor Mel Thomson’s idea of challenging politicians to take the “No Tax Increase” pledge.
So he developed a similar pledge for federal politicians to sign.
Who would have thought that 1985 dinner conversation at Gallagher’s would have turned into such a political firestorm in 2012?
Of course, no one is required to take this pledge. But if you decline, voters have a right to assume you plan to raise taxes — or, at least, want to keep your options open.
Politicians take Grover’s pledge for one and only one reason — because they believe doing so will help them win their election. So voters have a right to expect their elected representatives to keep their pledge.
Under Grover’s Pledge, you can vote for tax reform that closes loopholes if there is a corresponding decrease in tax rates. What you can’t vote for is a net tax increase.
But as Mel Thomson, JFK, and Ronald Reagan demonstrated — if you cut tax rates, this increases economic activity and economic growth. So there’s almost always an increase in tax revenue for the government. As people get richer, the government gets richer. It’s a win-win proposition.
The logic is this . . .
If taxes are 100 percent, the government will collect no revenue . . . because no one’s going to work if all their earnings are confiscated by taxation. And if taxes are zero, the government collects no revenue either.
No one knows exactly what the optimal level of taxation is to produce the fastest economic growth and most revenue for the government. Regulation also factors into this because regulation acts like a tax.
Grover’s view (and mine) is that we are a long way past this optimal point on the Laffeur Curve.
The burden of government (taxes plus excessive regulation) is deterring business and economic activity — disincentivizing work, production, and risk-taking . . . while incentivizing leisure and sloth.
If you don’t believe me, watch this video . . .
A big reason economic growth in the U.S. has been so slow in recent years is because there are other countries today that are more favorable for business — such as Canada.
Canada recently cut its top corporate tax rate to 15 percent.
The top corporate tax rate in the U.S. is 39.2 percent — now the highest in the developed world.
So why start a business in the United States if you can pay less than half the tax rate by setting up your factory a few miles to the north?
Communist China has also been cutting taxes like crazy lately — on both corporations and individuals.
Well, to spur more economic growth. That’s why.
China’s top corporate tax rate is now 25 percent — 38 percent lower than America’s top corporate tax rate of 39.2 percent. But for qualified enterprises, the top corporate tax rate in China is now 15 percent. No wonder business capital is flowing out of the United States and into Communist China.
Communist China today is a lot less Communist than we are.
In Hong Kong (now part of Communist China) the top corporate tax rate is 16.5 percent.
By the way, two thirds of Britain’s millionaires have pulled a John Galt and left Britain since the introduction of its 50 percent top tax rate.
Grover doesn’t want that to happen to America.
Paul Krugman argued recently in the New York Times that in the 1950s, the top income tax rate was 91 percent for individuals. He notes that the U.S. was then the unrivaled #1 economic superpower in the world.
JFK than cut the top rate to 70 percent. Reagan cut the top rate to 50 percent, then to 28 percent.
What Krugman misses with his 91 percent top tax rate thesis is that we had just emerged from World War Two as the big winner. The rest of the world had been destroyed, for the most part. Then most of the rest of the world was either Communist or Third World.
The U.S. (relatively unscathed by World War II) was just about the only game in town for any kind of capitalism.
The 91 percent top tax rate was a hangover from WWII when we had to fund the big war machine so we could defeat both Hitler and the Japanese.
Because of the huge tax rate in the 1940s and 50s, most corporate executives did not take much in the way of pay. Instead, companies had generous pensions and other befits that were not taxed.
And people tended to stay at the same company for their entire lives because they could not afford to leave their pensions and benefits behind. So employees were, in essence, indentured servants. So that’s not so good if you value freedom.
We actually had much faster economic growth in the 1960s than we had in the 1950s after JFK cut tax rates to a top rate of 70 percent (despite the cost of the Vietnam war and other Cold War costs).
Of course, no one ever paid close to these top rates. They hid the money in their companies and had a lot of deductions and exemptions.
I actually think that, more than the top income tax rates, over-regulation is the much bigger hurdle to starting a business.
Regulations hurt start-up businesses more because they can’t afford the lawyers to make sure they are in compliance. As a result, new business start-ups are almost non-existent today. Small business is always where the new jobs and economic growth come from.
Grover believes (quite common-sensicallly) that the emphasis should be on lightening government’s burden on new business formation and productive activity by lowering tax rates, striking down unnecessary government regulations, and reining in out-of-control federal spending.
That’s what JFK and Reagan did. The result in both cases was economic growth rates of more than four percent per year — more than double the growth rate we are seeing today.
Government at all levels is taking 40 cents out of every dollar earned in America. The federal government is borrowing 42 cents out of every dollar it spends.
Enough is enough. It’s time for government to tighten its belt and to stop strangling the goose (capitalism) that’s laying the golden eggs.
It’s both good economics and good politics. There’s absolutely no reason to strike a deal with Obama on this. Just let the Fiscal Cliff happen.
On January 1, 2013, automatic spending cuts plus Taxmageddon kick in — unless President Obama can strike a deal with House Republicans over spending cuts and taxes.
Obama wants to increase taxes, but doesn’t want to cut spending, with the possible exception of military spending. He certainly doesn’t want to cut or even limit spending on entitlements and welfare programs. He wants those expanded. Obama always wants to spend more. Obama always wants to grow government.
The Fiscal Cliff stops his spending spree.
I’m not the least bit concerned about the automatic spending cuts.
Remember, the Fiscal Cliff is not a Fiscal Cliff for you or me. It’s a Fiscal Cliff for the federal government. It requires the federal government to cut spending across-the-board if Congress and President Obama fail to hit spending cut targets they all agreed to. It requires the federal government to go on a diet.
Isn’t this exactly what we want — mandatory spending cuts?
So this is only a crisis for liberals and Leftists who want no restraints on spending.
Yes, the military will be hit by this. But, frankly, it’s high time we started scaling back our military. Not that I’m against having a huge military if we can afford it. But we can’t.
Right now, 43 percent of the entire world’s military spending is, well, us. We are spending six times more
on our military than #2 China. We are spending 14 times more than Russia. Both Britain and France spend more on their military than Russia.
Russia is really just a Third World country, no longer much to worry about.
There’s no Hitler on the horizon and aircraft carriers are not needed to kill terrorists.
Surely the 11 aircraft carriers we now have are enough.
No other country in the world has more than two aircraft carriers. China and Russia each have one aircraft carrier.
So I’m not losing much sleep over the prospect of scaling back our military some if it also means we have to cut government spending everywhere else by the same proportion.
We need to do this.
The U.S. government now has a $16.3 TRILLION debt and is borrowing 40 cents out of every dollar it spends. We need to cut and we need to cut now. If that means we go from 11 aircraft carriers to six, so be it.
Then we’d only be spending three times more on our military than #2 China.
While we’re at it, let’s also end all foreign aid. We can’t afford that either.
But what about Taxmageddon?
Starting on January 1, 2013, American households will see an estimated average tax increase of $4,223 per year.
Not only will the Bush tax cuts expire, but the patch on the dreaded Alternative Minimum Tax also expires. This will rope another 20,000,000 middle income households into paying the AMT who were never supposed to pay this brutal tax. The FICA payroll tax holiday will also expire on January 1.
The expiration of the Bush tax cuts produces about one-third of Taxmageddon’s tax increases. It’s a myth that the Bush tax cuts only reduced taxes on the wealthy. They also reduced the marriage penalty, increased the Child Tax Credit and the adoption credit, and increased tax breaks for education costs and dependent care costs.
But there’s more, much more.
Taxes on capital gains will go up to 20 percent from 15 percent. Taxes on dividend income will triple for many Americans. Instead of a top rate of 15 percent on dividend income, you’ll be paying whatever your income tax rate is on dividends. So that could be 39 percent under the new rates. And the “death tax” exclusion drops from $5,000,000 to $1,000,000 — with a mind-boggling 55 percent tax rate.
So goodbye family farm, and goodbye family business.
Then, perhaps most crushing of all, most of the 21 tax increases that are embedded in the ObamaCare legislation kick in.
So a tax increase nightmare awaits us January 1.
I say, so what?
If Americans want a gigantic social welfare and entitlement state, they need to start paying for it.
Now, I would certainly prefer there be no Taxmageddon on January 1. But I’m willing to live with it if we also get all those mandatory across-the-board spending cuts.
It would be far better just to have the spending cuts and no tax increases. The tax increases will certainly hurt the economy, probably plunge us into another recession — a double dip.
But I’ll take Taxmageddon if we get all the immediate mandatory across-the-board spending cuts.
I’ve always believed that if Americans had to actually pay for the government they are getting, they would not want this much government.
But politicians have found a way to increase government spending (especially entitlements) without requiring voters to pay the tab. They do this through deficit spending, and letting future generations pay for it — when the current crop of politicians have long since left office.
But that’s immoral. That’s stealing from future generations to pay for today’s government benefits.
It’s time to end this generational theft. It’s criminal that we are saddling babies who haven’t even been born yet with the tab for our benefits. Right now, every baby born in America owes $81,000 on the national debt. It’s time we pay the piper.
This will require brutal fiscal austerity.
But there’s also a big political benefit to going over the Fiscal Cliff and allowing all these automatic spending cuts and tax increases go into effect.
Barack Obama will get the blame.
Taxmageddon will likely push America back into another recession. But that’s, frankly, what America needs. What recessions do is blast the fat out of the economy. We then emerge stronger.
We need to get our fiscal house in order. And that’s painful.
Most Americans won’t like it and will take their anger out on Democrats in the 2014 mid-term elections and the 2016 Presidential Election.
But that’s just a side benefit. It’s also the correct economic prescription.
If you run up your credit card debt so you can live beyond your means, that eventually catches up with you. Then comes the hangover. There comes a point when you have no choice but to dramatically cut back your spending (perhaps even live like a pauper) until you can pay off your credit cards. You must learn to live with less.
That’s what America must do now.
Why not use this opportunity of the Fiscal Cliff to do these two wonderful things:
1) Put America’s fiscal house in order with across-the-board mandatory cuts in government spending; and . . .
2) Let Obama and the Democrats pay the political price for the pain.
There’s really no need to fear the Fiscal Cliff. It’s the tough medicine America needs. We have a $16.3 TRILLION national debt, for Pete’s sake. Soon the debt will be $20 TRILLION. And then we’ll be Greece.
The mandatory spending cuts will make us stronger in the long run.
The House GOP position should be no more increases to the debt ceiling. There’s nothing to negotiate. The debt ceiling should not go up again, period, ever. There’s really no reason to meet with Obama to talk over any of this. Just let it happen.
#1: Since January of 2009, the median household has lost $4,019 in income per year.
#2: Median household income has fallen every year of the Obama Administration.
#3: Our national debt recently soared past $16 TRILLION. Obama has added nearly $6 TRILLION to the national debt.
#4: Barack Obama has added more than $1 TRILLION to the national debt every year of his Presidency.
#5: The federal government is borrowing 44 cents of every dollar it spends.
#6: A gallon of regular gas cost $1.86 on average across America on President Obama’s first day in office. Today, a gallon costs $3.86 on average in America.
#7: The official unemployment rate today is 8.1% compared with 5% four years ago and 7.8% on Obama’s first day in office. The unemployment rate has been over 8% for 43 straight months.
#8: The true unemployment rate now is 11.2% if you use the size of the labor force as in stood in January 2009.
#9: If the labor participation rate was sitting at the 30 year average of 65.8 percent, the unemployment rate would actually be 11.7 percent. But people are leaving the labor market because they are too discouraged to look for work in this terrible economy, so this makes the official unemployment rate artificially low.
#10: The labor participation rate for men has fallen to 69.9 percent. This is the lowest level since the government started tracking this number in 1948.
#11: But how are we doing compared to two years ago? The percentage of working age Americans that are employed is smaller now than it was two years ago. In August 2010, 58.5 percent of working age Americans had jobs. In August 2012, 58.3 percent of working age Americans had jobs.
#12: Since Barack Obama entered the White House, the number of long-term unemployed Americans has risen from 2.7 million to 5.2 million.
#13: Today, more than half of all Americans are now at least partially financially dependent on the government.
#14: The U6 unemployment rate now stands at 14.7% when you count part-time workers who would like full-time work and when you count those who have not looked for work in four weeks or more but who want work. Many economists say this is the true unemployment rate.
#15: The percentage of working age Americans with a job has been below 59 percent for 35 months in a row.
#17: Since the Obama Administration declared the end of the recession in June of 2009, 58 percent of the jobs created have been low income jobs. (Source: National Employment Law Center)
#17: Today more than 104 million Americans are enrolled in at least one welfare program run by the federal government. We have 88 means-tested federal welfare programs.
#18: The number of Americans on food stamps has grown from 31.9 million when Barack Obama entered the White House to 46.7 million today.
#19: One quarter of all U.S. children are enrolled in the food stamp program today.
#20: Since Obama became president, the number of Americans living in poverty has risen by 6.4 million.
#21: While Obama has been president, U.S. home values have fallen by another 11 percent.
#22: More than 10 million homeowners are underwater on their mortgages.
#23: Electricity bills in the United States have risen faster than the overall rate of inflation for four years in a row. (Source: USA Today)
#24: While Obama has been President the velocity of money (one of the best measures of the economy’s overall health) has plunged to a post-World War II low.
#25: More than three times as many new homes were sold in the United States in 2005 as will be sold in 2012.
#26: The United States was once ranked #1 in the world in Gross Domestic Product (GDP) per capita. Today we have slipped to #11 — behind countries like Brunei and Norway, according to the World Fact Book published by the CIA.
#27: The United States was ranked #1 in terms of economic competitiveness when Barack Obama became President. Today, the U.S. economy has fallen to 7th place, according to a report by the World Economic Forum — behind countries like Sweden, the Netherlands, and Finland.
#28: More than 10 million U.S. households today do not have a bank account. That number has increased by one million since 2009.
#29: In 1999, 64.1 percent of all Americans were covered by employment-based health insurance. Today, only 55.1 percent are covered by employment-based health insurance.
#30: Health insurance costs have spiked up by $3,065 for the average American family since Obama took office — a 23 percent increase (Source: Kaiser Family Foundation)
#31: Health insurance costs have been spiking up even faster since ObamaCare was passed into law on March 24, 2010.
The Bottom Line . . .
The truth is Barack Obama’s so-called “recovery” is far worse than the recession that started under George W. Bush in the 3rd quarter of 2008 and that was proclaimed over by Obama in June of 2009 — before a single Obama policy had kicked in.
The “recovery” stopped in April of 2010 — two weeks after ObamaCare passed into law. See chart here >>>
Romney’s theme should NOT be “Are you better off than you were four years ago?”
That was Reagan’s line, and really doesn’t communicate the gravity of today’s economic crisis.
We’re in the midst of a full-blown economic collapse — as illustrated by Federal Reserve Chairman Ben Bernanke’s pledge today to print as much new money as needed to keep the economy afloat through Election Day.
Mitt’s theme should be: “Think things are bad now? Just imagine what America will look like if Obama is reelected and has another four years to complete his promise to ‘fundamentally transform’ America.”
Obama certainly is “fundamentally transforming” America — into Third World banana republic . . . and amazingly quickly.