Monday, April 5, 2010

It's A New Week, And There's Some New Economic News

As you can see, I changed the theme again. I had several comments about the dark background, so I ditched it. Hopefully this will work out better.

Well, it's a new week, and we had a new jobs report out recently. Things kinda sorta turned around...a bit. Maybe. I'll let the professionals at Heritage explain (my emphasis):

Today the Labor Department’s Bureau of Labor and Statistics released its monthly jobs report showing that the nation’s unemployment is 9.7% for the third month in a row. While the jobs report does indicate that 162,000 net jobs were created in March, almost 50,000 of those jobs were temporary government Census jobs that do not reflect any real economic progress. In total, the U.S. economy has now lost a total of 3.8 million jobs since President Barack Obama signed his $862 billion stimulus plan. We are 8.1 million jobs short of the 138.6 million he promised the American people.

It is good to see the American economy finally recovering again. It demonstrates the resilience of the American entrepreneur in the face a punishing job killing agenda from Washington. And don’t fall for any White House claims that this belated recovery is due to the stimulus. As the Congressional Budget Office (CBO) admitted last month, its analysis of the stimulus’ job creating record was simply “essentially repeating the same exercise” as the initial projections. In other words, the CBO numbers on the stimulus don’t take any actual new real world data into account. Working with actual data, Veronique de Rugy of George Mason University’s Mercatus Center has found: 1) no statistical correlation between unemployment and how the $862 billion was spent; 2) that Democratic districts received one-and-a-half times as many awards as Republican ones; and 3) an average cost of $286,000 was awarded per job created. $286,000 per job created. That is simply a bad investment.

Not to mention the staggering debt that Obama's policies (including the useless 'stimulus' package) have heaped onto future generations of Americans, of course. That's not a particularly savvy investment, either.

But the real problem is slightly different. We're now entering what Obama really wanted to create: a perpetually dependent state.
Heritage’s own Index of Dependence on Government shows a steep rise in American reliance on government: “The burgeoning of flagship entitlement programs and the shrinking number of taxpayers who have any financial stake in the government threaten to bankrupt the government–which has led to an increasing interest across the political spectrum in the growth of dependency-creating initiatives.” And one of the strongest dependency-creating special interests, government unions, reached a key tipping this year. As Heritage’s own James Sherk was the first to document, government union workers now out number those in the private sector. Edsall explains what this means for the American people: “The consequences of this shift are profound. A majority of the American labor movement is now directly dependent on tax dollars. In terms of political orientation, these workers can now be described as tax consumers as well as tax payers. For these workers, a tax increase may result in a slightly smaller paycheck but, more importantly, the hike means more money is available to pay for raises and new benefits.”
Why does he -- and liberals like him -- want more dependents? Because it means more power for whoever runs the government. It's a simple implementation of the second 'golden rule': whoever owns the gold makes the rules. When the government provides everything you get, you pretty much have to do whatever the government tells you to do.

Of course, the alternative to this dependent state is the unleashing of the American spirit of innovation and productivity through free markets. Heritage reports that the job losses were actually worse in the recession of 2001 (after the WTC was destroyed), but the reaction of the Bush administration was essentially the opposite - cut taxes, and create an environment where businesses could experience growth. We came out of that recession relatively quickly, and experienced several years of 4-6% growth. Obama's policies are doing exactly the opposite, and businesses are now seeing an environment which is increasingly hostile to success and growth. Thus, little job creation exists, and little will change as long as these policies are in effect.

Gateway Pundit reminds us of the cold, hard, facts:


Expect at best a pretty flat red line until such time as Obama changes his policies or Republicans take back control of the government.

On a related note, VP Joe Biden is out there running his mouth without supervision again, whining about how unfair it is that rich people make sooooo much money:
“the top 1 percent of earners get 22 percent of all income made in the U.S. Taxes have been lowered for the wealthy considerably over the years. It’s about time we get a little tax equity here.”
True, but what share of all income taxes is paid by that same 1%? Try 40%. If any claims are to be made of fairness (or lack of), I think they should be going the other direction! For a refresher on who pays how much of our taxes, go here. If you've never seen this information, I strongly encourage you to check it out - it's an eye-opener, to be sure!

Heritage pins the tail on the donkey with this one short little paragraph:
...the top one percent of taxpayers pay more taxes than the bottom 95 percent of taxpayers combined. And the bottom 50 percent of taxpayers pay less than 3 percent of all taxes. If current trends continue, the bottom 50 percent will soon pay no income taxes at all.
This is the tax tipping point we've discussed a number of times here. When a majority realizes they can vote themselves all kinds of goodies, rebates, stimuluses, and tax exemptions at the sole expense of the minority, the country is finished. It's not a question of remaining financially viable, but it becomes a question of how long it will be until the majority destroy the minority, and then there is absolutely NO money left to be spread around. What good is fairness going to do anyone then?

If we went to some kind of a flat tax system, however, fairness would reign supreme - everyone would pay the same percentage of taxes, regardless of how much income they made. Recall that when the one rich guy gets taken out of the picture, no one gets any beer.

Unbelievably, Obama is still out there saying that the country would have gone bankrupt without passing the multi-trillion dollar spending program that is DemCare! Hot Air reminds us of an outstanding sketch by SNL on this very subject which you really must check out (the key phrase: "I am noticing that each of your plans to save money involves spending even more money.").

The NRSC offered this video last week that nails the point pretty well, too:



When it comes to economics, it doesn't take a genius to understand the basics. What Obama is doing to America is destructive, and simply cannot last, even when factoring in the incredible resilience and productivity of the American people. If we value this country and want to pass it along to our children as a free and prosperous nation, we've got to make a change, and fast. Unfortunately for all of us, the change Obama provides isn't the correct one.

There's my two cents.

2 comments:

The All Real Numbers Symbol said...

After thinking about it for awhile, I think I've finally figured out why Joe Biden is the VP: Because even Obama looks smart standing next to that guy. It seems mean, but I'm pretty convinced it's true. (Especially becase every time Biden opens his mouth, he sticks his foot in it. He may as well just put his foot there and keep it there.)

I love that little commercial, it was great. My favorite line? "Get real." Yes, if only all the world's problems could be solved through unicorns and rainbow magic. Yeah right.

2Cents said...

Yes, exactly! I call it the Sidekick Effect. I'm not sure what other conclusion makes more sense.

Yes, the commercial was good stuff. If only...