Long Term Economic Weakness A Near Certainty
February 1, 2013 10 Comments
The economy is a mess as the numbers we’ve seen lately tell us. Earlier this week it was reported that fourth quarter GDP dropped 0.1%. Back in 2007 the AP declared a quarter of economic decline was a sign of a recession. These days the AP whines that economic “jitters” are competing with Obama’s progressive agenda. Yesterday the government reported an increase in new unemployment claims of 38,000. Reuters tried to soften the number claiming it’s within a range for “job growth.” It’s a pretty substantial gain over the previous week to believe we’re looking at any kind of serious job growth. January unemployment increased to 7.9% with 157,000 new jobs. As usual during the last four years, not enough jobs to cover population growth.
This is all the Republicans fault of course. The media, Democrats and Obama administration all blame the GOP for poor economic news. They’ve done away with blaming Bush, now it’s just generic “Republicans” that are to blame. Harry Reid bloviated that the GOP needs to stop “bad mouthing” the economic recovery. Citing statistics is a sign of “bad mouthing” in the world of Democrats. We can’t have any of that because it might undermine the ability of the left to force through gun control and amnesty for illegals in the next 24-48 hours.
Everything Obama wants to do has to be done immediately, or so he’s been arguing. The less debate the better for him. Bad economic news ruins his ability to force though his progressive agenda, perhaps as much as Republican opposition in the House. None of this economic news is particularly surprising, which is why Obama is pushing so hard right now. His second administration is likely to be dominated by the economy. Obama’s tax increases on 80% of Americans is having a profoundly negative effect on the economy. Obamacare kicks in soon with the cheapest acceptable plan costing $20,000 per family according to the IRS. Can’t afford that? You’ll be taxed around $2,000.
We have massive economic problems and we don’t have a President or a Congress capable of tackling them. We have a mounting national debt that is projected to hit $20 trillion by the end of Obama’s term. We continue to have $1 trillion annual budget deficits. Taxes are crippling the economy, making it more difficult for middle class Americans to be upwardly mobile. The President and his party were re-elected by an underclass of people dependant on government for just about everything in their lives. Obama pays lip service to getting the long term unemployed back on the payrolls, all while increasing the number of people on social security disability more than any other President in history. It pays to have a dependant underclass when you’re a Democrat.
Our nation is facing a bleak economic future. Britain is entering a third dip recession, Europe generally is slowing down. China is slowing down. The US is facing its slowest economic recovery since the Depression. So slow, it’s not even a recovery anymore. Obama has no real economic plan, he lives in a fanciful world where he plays dictator to business, Congress and the masses of Americans. It’s a dream world that doesn’t exist but one that results in Obama offering nothing to fix the problems we have. We have a Congress that can’t deal with the lunatic in the White House and can barely deal with each other. As a group, Congress doesn’t have any solutions either. We’re in for a rough four years. One wonders if the American dream of upward mobility really is dead.
About Steven
All ‘product’ in ‘GDP’ is not created equally, so what were the drivers of the -0.1% change in GDP?
I’m not playing the Democrat game of pretending like the massive reduction in GDP in the 4th quarter is the GOP’s fault.
Not assigning blame. You are talking about gdp being down. I’m simply asking what components of gdp are responsible. Consumption? Health care? Other?
http://www.cepr.net/index.php/data-bytes/gdp-bytes/government-spending-and-inventories-push-graowth-negative
“Government spending fell at a 6.6 percent annual rate, driven by a 22.2 percent decline in defense spending, subtracting 1.33 percentage points from the growth rate in the quarter.” Combined with inventory draw downs, it was a >2.5% drag on GDP.
I can understand why you don’t want to talk about this.
This a perfect example of what is wrong with the state capitalism (ie: fascism) of Obama. The sort of deficit spending we have in this country is unsustainable. We’re creating $1 trillion in debt every year to boost GDP a couple of percentage points. The fact is, the private sector isn’t doing very well at all. Only via the private sector can we have true economic growth. Take out a little bit of government spending and the truth comes out, the private sector is a mess and getting worse because of government intervention.
My central point: the horrible GDP numbers you are touting are bad specifically because of government doing what you advocate, spending less. That’s it. I can understand why you don’t like this.
Nice spin. What the numbers reveal is that the economy isn’t doing so hot with or without government spending. We cannot have government spend our way into good economic times, it’s just not realistic. Especially so with the sort of debt we have. The private sector is contracting, we have 8.5 million fewer people working today than when Obama took office. Whining about spending cuts, especially when they’re largely military cuts which the left usually loves, doesn’t fix the fundemental problems our economy faces. Government spending only masks what’s really going on.
Spin? Nope. Just arithmetic. The negative GDP number is largely due to reduction in government spending – you know, further evidence of that out-of-control spending y’all are always getting on about.
Private sector “retracting”? Cite, please.
8.5 fewer people working than when Obama takes office? Cite, please.
http://townhall.com/columnists/jeffcrouere/2013/02/02/obamas-recovery-sure-looks-like-recession-n1503558
Recession is probably not the proper term for the private sector. Stagnation is probably more accurate. The job growth we’ve seen in the private sector doesn’t keep up with population growth, the job market isn’t really growing at anything beyond a stagnation level. Salaries are down over the last four years, they aren’t picking up much. The stock market is booming but that hasn’t trickled its way down at all.
That article is meh – blathering about the rich firing people because marginal rates when up by a few percent and restating unemployment numbers. There is nothing in that link about economic performance outside of the aggregate GDP of -0.1%, which is what I was asking about. This link gives a much more complete picture of the numbers:
http://www.cepr.net/index.php/data-bytes/gdp-bytes/government-spending-and-inventories-push-graowth-negative
As for the 8.5M fewer people in the workforce, that is not the same thing as “8.5 million fewer people working than when Obama took office”. The former includes people leaving the workforce due to both economic and other drivers. The latter simply isn’t accurate as there are a couple million more people employed now than in Jan 2009 and millions more still since the bottom in late 2009.
This is per BLS data. http://data.bls.gov/cgi-bin/surveymost?ce. Select ‘total private employment’ and then check to add a graph on the next page. You’ll see that the private sector hemorrhaged jobs from early 2008 until early 2009 when the rate of job loss slowed markedly – right around the implementation of some Keynesian stimulation, I’ll note – then bottomed in late 2009 and has been climbing since. Not perfect, but certainly not ‘stagnation’ or ‘retracting’.
As for hiring or increasing salaries – why would a manager in a soft labor market with soft demand ever giver raises or hire? Just pocket it all, which is exactly what is happening – firm cost of labor is tanking and profits are soaring. Perfect time to be a CEO.