Unemployment Claims Up, Taxmageddon Looms; Obama Offers No Solutions

It’s been easy the past couple weeks to forget that the economy is the most important issue facing the country in the upcoming election. It’s been easy to get distracted by events in Europe, the Fast and Furious scandal and the absurd claim of executive privilege and it’s been even easier to get distracted by the Obamacare ruling which will be handed down next week. As interesting as all of those topics are, nothing trumps the economy.

Yesterday we got yet another reminder that the economy is not in recovery mode as new jobless claims hit 387,000. This is down 2,000 from last week but only because the Federal government revised last weeks number up by 3,000. The government has revised weekly numbers up every single week but one for the past 15 months. So you can bet that next week they’ll revise the number of unemployed for this week up, likely over 390,000.

But it isn’t just that new unemployment claims are up. The four week rolling average is 386.250 new jobless claims per week. That’s the highest level since early December. We aren’t in a recovery, we’re at best in some sort of stagnation. Europe certainly is to blame for some of these problems but it wouldn’t be as big of an issue if our economy was strong on its own. Unfortunately our economy is not strong and it’s largely because of the policies of Barack Obama. It is the regulations pushed by Obama, his stimulus and his tax policies that have created market insecurity and that has directly affected job growth.

We’ll leave Obamacare alone as we’ve discussed at length how this has negatively affected job creation. The Stimulus clearly failed as it didn’t create the jobs Obama said it was going to. It seems like every week we find out about another Stimulus expenditure that spends an absurd amount of money for limited job creation. The latest is $9 billion spent to create 910 jobs, or $9.8 million per job created.  The waste is absolutely incredible, especially when you consider that that during Obama’s years the government has added $5 trillion in new debt. It is the debt that is creating uncertainty in the marketplace and when there is uncertainty no one hires.

On January 1st 2013 the Bush tax cuts will expire, creating a so-called taxmageddon for the country. Taxes will go up for everyone, including the lower and middle class which benefitted from 70% of the Bush tax cuts. The marriage penalty will return, child tax credits will be cut in half, capital gains taxes will rise by 33%, taxes on dividends will triple, a 10% tax level will be created which will substantially harm the poor, tax cuts for adoptions will be eliminated, student loan interest deductions will decrease as well deductions for a variety of other things and the death tax will increase substantially which will negatively affect small businesses. All of this put together creates uncertainty and yet we sit back and wonder why businesses aren’t creating jobs.

Obama has been a disaster for the economy because he believes in a top down approach. He believes economic policy is set from on high and that businesses will hire because he says so. It’s a very first grade view of the power of the President. But the fact is, jobs aren’t created by government and when they are they costs millions each. That’s not how it works in the private sector. Uncertainty is created via tax policy and since Obama has never been willing to do anything more than extend Bush’s tax cuts for a year or two at a time, all while threatening to eliminate them completely, there is no certainty. Obamacare has created massive cost uncertainty, especially for smaller businesses. Obama’s regulations have been costly, which means there’s less money for job creation.

What’s worse is that Obama has no new ideas, as evidenced by his economic “reset” speech last week wherein he offered no new policies and simply blamed Bush, Republicans, Europe and everyone but himself. The President isn’t willing to compromise on anything, he isn’t even willing to negotiate. Meanwhile new jobless claims are up and you can bet the June economic report due out on July 6th won’t be very good. Worst of all Americans across the country are suffering from lack of work, lack of enough work or fear of losing work. Yet the President offers no new solutions and he won’t consider anything offered by the “enemy” Republicans. With all of this news you wonder why at least 45% of the country is willing to vote for him again.