Obama Depression: 20 Months Of Unemployment Over 8% For Official U-3 Rate and Over 15% For Total U-6 Rate–Over 26 Million Americans Looking For A Full Time Job and 41.8 Million On Food Stamps!–Followed By 36 More Months Of Over 8% Official Unemployment U-3 Rate and 15% Total Unemployment U-6 Rate!
“Government spending cannot create additional jobs. If the government provides the funds required by taxing the citizens or by borrowing from the public, it abolishes on the one hand as many jobs as it creates on the other.”
“True, governments can reduce the rate of interest in the short run. They can issue additional paper money. They can open the way to credit expansion by the banks. They can thus create an artificial boom and the appearance of prosperity. But such a boom is bound to collapse soon or late and to bring about a depression.”
~Ludwig von Mises
Economy Sheds 95,000 Jobs; 14.8 Million out of Work
RECORD 41.8 MILLION PEOPLE ON FOOD STAMPS 9-15-2010
Sept 2010 Employment Report
U.S. Recovering Jobs But Pace Has Slowed, Analyst Says
Goolsbee Sees Need to Get ‘Job Engine’ Growing Faster: Video
“Traders will look at the U6 unemployment rate…on Friday”
President Obama on September, 2010 Jobs Numbers
Ron Paul: Obama Stimulus Package Will Turn Recession Into Depression
The U.S. jobless ” recovery” continues and is getting worse.
While the official unemployment rate of 9.6% as measured by U-3 did not go up in September, the real total unemployment rate went from 16.7% in August to 17.1% in September 2010.
The official unemployment level is currently at 14,767,000 unemployed Americans and exceeds the 13 million unemployed during the worse year of the Great Depression, 1933.
The total unemployment level calculated as 17.1% of the civilian labor force of about 154,158,000 is over 26 million, twice the number of unemployed during the worse year of the Great Depression, 1933.
The Obama Depression is not over or improving but is in fact getting worse.
The Keynesian economics recipe for economic disaster of more and more stimulus spending, larger and larger budgetary deficits, financed by layer upon layer of government debt has been a big failure.
A failure made even worse by the Federal Reserves’ quantitative easing monetary policy of monetization of the debt by “printing” more and more money in exchange for the Federal Government’s debt.
Neither the fiscal policy of stimulus spending nor the monetary policy of quantitative easing will create more jobs.
Obama’s economic policies only increase the belief among consumers and business owners that the Federal Government is completely out-of-control.
Only when President Obama’s economic policies are reversed and the current regime in Congress and the President are votedout of office will you finally see job creation and low full employment rates of 2%% to 3% This will take not months but at least five years.
Dixion Says Fed Quantitative Easing Won’t Create New Jobs
http://www.youtube.com/watch?v=85Olz2h6ehM
The immediate result of the Federal Reserve’s monetary policy is the devaluing of the dollar
The Federal Reserve’s policy is a massive tax increase on all Americans as the purchasing power of their money declines daily.
This will only mean higher prices for all imports including petroleum and the costs of all goods and services to the extent they require imported goods and services such as petroleum.
Ron Paul vs. Ben Bernanke
Peter Schiff–Dollar Collaspse–Gold As A Hedge Against The Fed’s Committment To Raise Inflation
Who reappointed The Federal Reserve Chairman, Ben Bernanke,–President Barack Obama.
Ron Paul : We Can’t Say Cut Spending For Food Stamps But NOT For The Military Industrial Complex!
http://www.youtube.com/watch?v=whfopF8Xj8I
All Labor and Unemployment Statistics Are From
The Department of Labor, Bureau of Labor Statistics
http://data.bls.gov/cgi-bin/surveymost?ln
As Of October 2010
The Numbers In Red Are For The Obama Administration
U-3
Series Id: LNS14000000
Seasonally Adjusted
Series title: (Seas) Unemployment Rate
Labor force status: Unemployment rate
Type of data: Percent or rate
Age: 16 years and over
Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Annual |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2000 | 4.0 | 4.1 | 4.0 | 3.8 | 4.0 | 4.0 | 4.0 | 4.1 | 3.9 | 3.9 | 3.9 | 3.9 | |
2001 | 4.2 | 4.2 | 4.3 | 4.4 | 4.3 | 4.5 | 4.6 | 4.9 | 5.0 | 5.3 | 5.5 | 5.7 | |
2002 | 5.7 | 5.7 | 5.7 | 5.9 | 5.8 | 5.8 | 5.8 | 5.7 | 5.7 | 5.7 | 5.9 | 6.0 | |
2003 | 5.8 | 5.9 | 5.9 | 6.0 | 6.1 | 6.3 | 6.2 | 6.1 | 6.1 | 6.0 | 5.8 | 5.7 | |
2004 | 5.7 | 5.6 | 5.8 | 5.6 | 5.6 | 5.6 | 5.5 | 5.4 | 5.4 | 5.5 | 5.4 | 5.4 | |
2005 | 5.3 | 5.4 | 5.2 | 5.2 | 5.1 | 5.0 | 5.0 | 4.9 | 5.0 | 5.0 | 5.0 | 4.9 | |
2006 | 4.7 | 4.8 | 4.7 | 4.7 | 4.6 | 4.6 | 4.7 | 4.7 | 4.5 | 4.4 | 4.5 | 4.4 | |
2007 | 4.6 | 4.5 | 4.4 | 4.5 | 4.4 | 4.6 | 4.6 | 4.6 | 4.7 | 4.7 | 4.7 | 5.0 | |
2008 | 5.0 | 4.8 | 5.1 | 5.0 | 5.4 | 5.5 | 5.8 | 6.1 | 6.2 | 6.6 | 6.9 | 7.4 | |
2009 | 7.7 | 8.2 | 8.6 | 8.9 | 9.4 | 9.5 | 9.4 | 9.7 | 9.8 | 10.1 | 10.0 | 10.0 | |
2010 | 9.7 | 9.7 | 9.7 | 9.9 | 9.7 | 9.5 | 9.5 | 9.6 | 9.6 |
U-6
Series Id: LNS13327709
Seasonally Adjusted
Series title: (seas) Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers
Labor force status: Aggregated totals unemployed
Type of data: Percent or rate
Age: 16 years and over
Percent/rates: Unemployed and mrg attached and pt for econ reas as percent of labor force plus marg attached
Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Annual |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2000 | 7.1 | 7.2 | 7.1 | 6.9 | 7.1 | 7.0 | 7.0 | 7.1 | 7.0 | 6.8 | 7.1 | 6.9 | |
2001 | 7.3 | 7.4 | 7.3 | 7.4 | 7.5 | 7.9 | 7.8 | 8.1 | 8.7 | 9.3 | 9.4 | 9.6 | |
2002 | 9.5 | 9.5 | 9.4 | 9.7 | 9.5 | 9.5 | 9.6 | 9.6 | 9.6 | 9.6 | 9.7 | 9.8 | |
2003 | 10.0 | 10.2 | 10.0 | 10.2 | 10.1 | 10.3 | 10.3 | 10.1 | 10.4 | 10.2 | 10.0 | 9.8 | |
2004 | 9.9 | 9.7 | 10.0 | 9.6 | 9.6 | 9.5 | 9.5 | 9.4 | 9.4 | 9.7 | 9.4 | 9.2 | |
2005 | 9.3 | 9.3 | 9.1 | 8.9 | 8.9 | 9.0 | 8.8 | 8.9 | 9.0 | 8.7 | 8.7 | 8.6 | |
2006 | 8.4 | 8.4 | 8.2 | 8.1 | 8.2 | 8.4 | 8.5 | 8.4 | 8.0 | 8.2 | 8.1 | 8.0 | |
2007 | 8.3 | 8.1 | 8.0 | 8.2 | 8.2 | 8.2 | 8.3 | 8.5 | 8.4 | 8.4 | 8.5 | 8.8 | |
2008 | 9.1 | 8.9 | 9.0 | 9.2 | 9.7 | 10.0 | 10.5 | 10.9 | 11.2 | 11.9 | 12.8 | 13.7 | |
2009 | 14.0 | 15.0 | 15.6 | 15.8 | 16.4 | 16.5 | 16.4 | 16.8 | 17.0 | 17.4 | 17.2 | 17.3 | |
2010 | 16.5 | 16.8 | 16.9 | 17.1 | 16.6 | 16.5 | 16.5 | 16.7 | 17.1 |
Series Id: LNS13000000
Seasonally Adjusted
Series title: (Seas) Unemployment Level
Labor force status: Unemployed
Type of data: Number in thousands
Age: 16 years and over
Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Annual |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2000 | 5708 | 5858 | 5733 | 5481 | 5758 | 5651 | 5747 | 5853 | 5625 | 5534 | 5639 | 5634 | |
2001 | 6023 | 6089 | 6141 | 6271 | 6226 | 6484 | 6583 | 7042 | 7142 | 7694 | 8003 | 8258 | |
2002 | 8182 | 8215 | 8304 | 8599 | 8399 | 8393 | 8390 | 8304 | 8251 | 8307 | 8520 | 8640 | |
2003 | 8520 | 8618 | 8588 | 8842 | 8957 | 9266 | 9011 | 8896 | 8921 | 8732 | 8576 | 8317 | |
2004 | 8370 | 8167 | 8491 | 8170 | 8212 | 8286 | 8136 | 7990 | 7927 | 8061 | 7932 | 7934 | |
2005 | 7784 | 7980 | 7737 | 7672 | 7651 | 7524 | 7406 | 7345 | 7553 | 7453 | 7566 | 7279 | |
2006 | 7059 | 7185 | 7075 | 7122 | 6977 | 6998 | 7154 | 7097 | 6853 | 6728 | 6883 | 6784 | |
2007 | 7085 | 6898 | 6725 | 6845 | 6765 | 6966 | 7113 | 7096 | 7200 | 7273 | 7284 | 7696 | |
2008 | 7628 | 7435 | 7793 | 7631 | 8397 | 8560 | 8895 | 9509 | 9569 | 10172 | 10617 | 11400 | |
2009 | 11919 | 12714 | 13310 | 13816 | 14518 | 14721 | 14534 | 14993 | 15159 | 15612 | 15340 | 15267 | |
2010 | 14837 | 14871 | 15005 | 15260 | 14973 | 14623 | 14599 | 14860 | 14767 |
In order to reduce the U.S. official unemployment rate by .1% in a single month requires the creation of between 250,000 and 300,000 jobs per month depending upon the number of new entrants into the labor market due to population growth and the labor participation rate or those seeking employment.
The labor participation rate goes down as an economy goes into a recession and goes up as the economy grows and prospers. The labor participation rate is currently 64.7%, well below the more normal range of 66% to 67.5% .
A higher labor participation rate means more individuals are actively seeking full-time employment and more jobs need to be created each month to absorb both new entrants and re-entrants into the labor market.
This is the reason why between 250,000 and 300,000 jobs need to be created each month to reduce the unemployment rate just .1%.
Series Id: LNS11300000
Seasonally Adjusted
Series title: (Seas) Labor Force Participation Rate
Labor force status: Civilian labor force participation rate
Type of data: Percent or rate
Age: 16 years and over
Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Annual |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2000 | 67.3 | 67.3 | 67.3 | 67.3 | 67.1 | 67.1 | 66.9 | 66.9 | 66.9 | 66.8 | 66.9 | 67.0 | |
2001 | 67.2 | 67.1 | 67.2 | 66.9 | 66.7 | 66.7 | 66.8 | 66.5 | 66.8 | 66.7 | 66.7 | 66.7 | |
2002 | 66.5 | 66.8 | 66.6 | 66.7 | 66.7 | 66.6 | 66.5 | 66.6 | 66.7 | 66.6 | 66.4 | 66.3 | |
2003 | 66.4 | 66.4 | 66.3 | 66.4 | 66.4 | 66.5 | 66.2 | 66.1 | 66.1 | 66.1 | 66.1 | 65.9 | |
2004 | 66.1 | 66.0 | 66.0 | 65.9 | 66.0 | 66.1 | 66.1 | 66.0 | 65.8 | 65.9 | 66.0 | 65.9 | |
2005 | 65.8 | 65.9 | 65.9 | 66.1 | 66.1 | 66.1 | 66.1 | 66.2 | 66.1 | 66.1 | 66.0 | 66.0 | |
2006 | 66.0 | 66.1 | 66.2 | 66.1 | 66.1 | 66.2 | 66.1 | 66.2 | 66.1 | 66.2 | 66.3 | 66.4 | |
2007 | 66.4 | 66.3 | 66.3 | 66.0 | 66.0 | 66.0 | 66.0 | 65.8 | 66.0 | 65.8 | 66.0 | 66.0 | |
2008 | 66.2 | 66.0 | 66.1 | 66.0 | 66.2 | 66.1 | 66.0 | 66.1 | 66.0 | 66.0 | 65.8 | 65.8 | |
2009 | 65.7 | 65.7 | 65.6 | 65.8 | 65.8 | 65.7 | 65.4 | 65.4 | 65.1 | 65.0 | 64.9 | 64.6 | |
2010 | 64.7 | 64.8 | 64.9 | 65.2 | 65.0 | 64.7 | 64.6 | 64.7 | 64.7 |
It takes at between 100,000 and 150,000 jobs to employ new entrants into the labor market mostly high school and college graduates.
There are currently over 1.1 million new entrants into the labor force that have not found their first job.
Series Id: LNS13023569
Seasonally Adjusted
Series title: (Seas) Unemployment Level – New Entrants
Labor force status: Unemployed
Type of data: Number in thousands
Age: 16 years and over
Unemployed entrant status: New entrants
Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Annual |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2000 | 394 | 420 | 429 | 406 | 466 | 427 | 433 | 499 | 415 | 402 | 419 | 490 | |
2001 | 444 | 396 | 378 | 457 | 468 | 467 | 448 | 485 | 473 | 481 | 495 | 515 | |
2002 | 484 | 507 | 538 | 527 | 497 | 549 | 545 | 612 | 536 | 479 | 591 | 535 | |
2003 | 599 | 584 | 630 | 635 | 630 | 661 | 669 | 652 | 686 | 636 | 593 | 693 | |
2004 | 676 | 666 | 631 | 652 | 718 | 649 | 702 | 704 | 695 | 734 | 700 | 702 | |
2005 | 621 | 753 | 712 | 764 | 710 | 650 | 630 | 626 | 607 | 638 | 673 | 633 | |
2006 | 618 | 710 | 635 | 590 | 522 | 644 | 638 | 647 | 612 | 573 | 583 | 588 | |
2007 | 628 | 599 | 614 | 621 | 536 | 634 | 599 | 590 | 668 | 700 | 661 | 688 | |
2008 | 685 | 660 | 705 | 631 | 807 | 771 | 829 | 826 | 811 | 826 | 735 | 820 | |
2009 | 792 | 1016 | 881 | 919 | 977 | 969 | 994 | 1096 | 1134 | 1114 | 1270 | 1270 | |
2010 | 1235 | 1238 | 1197 | 1231 | 1206 | 1140 | 1188 | 1259 | 1187 |
The unemployment rate for the young, ages 16 to 19, is 26%!
The unemployment rate for the young is currently nearly double the usual unemployment rate for ages 16 to 19 of between 12% and 16% when the economy is growing.
Series Id: LNS14000012
Seasonally Adjusted
Series title: (Seas) Unemployment Rate – 16-19 yrs.
Labor force status: Unemployment rate
Type of data: Percent or rate
Age: 16 to 19 years
Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Annual |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2000 | 12.7 | 13.8 | 13.3 | 12.6 | 12.8 | 12.3 | 13.4 | 14.0 | 13.0 | 12.8 | 13.0 | 13.2 | |
2001 | 13.8 | 13.7 | 13.8 | 13.9 | 13.4 | 14.2 | 14.4 | 15.6 | 15.2 | 16.0 | 15.9 | 17.0 | |
2002 | 16.5 | 16.0 | 16.6 | 16.7 | 16.6 | 16.7 | 16.8 | 17.0 | 16.3 | 15.1 | 17.1 | 16.9 | |
2003 | 17.2 | 17.2 | 17.8 | 17.7 | 17.9 | 19.0 | 18.2 | 16.6 | 17.6 | 17.2 | 15.7 | 16.2 | |
2004 | 17.0 | 16.5 | 16.8 | 16.6 | 17.1 | 17.0 | 17.8 | 16.7 | 16.6 | 17.4 | 16.4 | 17.6 | |
2005 | 16.2 | 17.5 | 17.1 | 17.8 | 17.8 | 16.3 | 16.1 | 16.1 | 15.5 | 16.1 | 17.0 | 14.9 | |
2006 | 15.2 | 15.3 | 16.1 | 14.6 | 14.0 | 15.7 | 15.9 | 16.1 | 16.3 | 15.2 | 14.9 | 14.7 | |
2007 | 14.8 | 14.9 | 14.9 | 15.6 | 15.9 | 16.2 | 15.3 | 16.0 | 16.0 | 15.5 | 16.2 | 16.9 | |
2008 | 17.8 | 16.5 | 16.0 | 15.6 | 18.9 | 19.0 | 20.8 | 18.9 | 19.3 | 20.3 | 20.3 | 20.8 | |
2009 | 20.9 | 21.8 | 22.0 | 21.8 | 23.2 | 24.3 | 24.5 | 25.7 | 26.1 | 27.6 | 26.8 | 27.1 | |
2010 | 26.4 | 25.0 | 26.1 | 25.4 | 26.4 | 25.7 | 26.1 | 26.3 | 26.0 |
Both high school graduates and those who either dropped out or failed to graduate from high school are finding it very difficult to find their first job.
Illegal immigrants, mainly from Mexico and Latin America, of between 10 million to 20 million, has made it even more difficult for young inexperienced American citizens to find entry-level jobs.
Also the Federal minimum hourly wage law prevents many small businesses from hiring young workers.
Good Intentions 2 of 3 Minimum Wage, Licensing, and Labor Laws with Walter Williams
Good Intentions 3 of 3 The Welfare System and Conclusions with Walter Williams
It currently takes between 100,000 and 150,000 new jobs in addition to the 100,000 to 150,000 jobs for new entrants to reduce the unemployment rate by .1%.
The civilian labor force is currently about 155 million.
Series Id: LNS11000000
Seasonally Adjusted
Series title: (Seas) Civilian Labor Force Level
Labor force status: Civilian labor force
Type of data: Number in thousands
Age: 16 years and over
Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Annual |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2000 | 142267(1) | 142456 | 142434 | 142751 | 142388 | 142591 | 142278 | 142514 | 142518 | 142622 | 142962 | 143248 | |
2001 | 143800 | 143701 | 143924 | 143569 | 143318 | 143357 | 143654 | 143284 | 143989 | 144086 | 144240 | 144305 | |
2002 | 143883 | 144653 | 144481 | 144725 | 144938 | 144808 | 144803 | 145009 | 145552 | 145314 | 145041 | 145066 | |
2003 | 145937(1) | 146100 | 146022 | 146474 | 146500 | 147056 | 146485 | 146445 | 146530 | 146716 | 147000 | 146729 | |
2004 | 146842(1) | 146709 | 146944 | 146850 | 147065 | 147460 | 147692 | 147564 | 147415 | 147793 | 148162 | 148059 | |
2005 | 148029(1) | 148364 | 148391 | 148926 | 149261 | 149238 | 149432 | 149779 | 149954 | 150001 | 150065 | 150030 | |
2006 | 150201(1) | 150629 | 150839 | 150915 | 151085 | 151368 | 151383 | 151729 | 151650 | 152020 | 152360 | 152698 | |
2007 | 153117(1) | 152941 | 153093 | 152531 | 152717 | 153045 | 153039 | 152781 | 153393 | 153158 | 153767 | 153869 | |
2008 | 154048(1) | 153600 | 153966 | 153936 | 154420 | 154327 | 154410 | 154696 | 154590 | 154849 | 154524 | 154587 | |
2009 | 154140(1) | 154401 | 154164 | 154718 | 154956 | 154759 | 154351 | 154426 | 153927 | 153854 | 153720 | 153059 | |
2010 | 153170(1) | 153512 | 153910 | 154715 | 154393 | 153741 | 153560 | 154110 | 154158 |
Multiply the civilian labor force of about 155 million by .1% and the result is 155,000.
This is approximate number of jobs that need to be created to reduce the unemployment rate by .1 with no growth in the labor force.
When you add in the natural growth of the labor force by new entrants from population growth you arrive at an estimate of between 250,000 to 300,000 new jobs that need to be created each month to reduce the unemployment rate by .1%.
In a robust economic recovery the private sector should be creating 500,000 to 600,000 jobs per month.
Unfortunately, the private business sector and particularly small and medium size businesses, are not creating anywhere near 250,000 to 300,000 per month.
In September the private sector created only a net total of 75,000 new jobs. This is far short of the 250,000 to 300,000 jobs needed to reduce the U-3 official unemployment rate by just .1%.
Even if 250,000 new jobs were being created each month and the unemployment rate declined 1.2% per year and over 3 million jobs were created in a year, it would take over five years to bring the official unemployment rate ( U-3) down to under a 3% rate of unemployment or a near full employment level.
The stimulus package of over $789 billion plus billions in interest payments was supposed to keep the unemployment rate under 8% and not above 8%!
The stimulus package has been an abject failure of the Keynesian economists including Romer and Berstein who advised Obama that this was what was needed.
Series Id: LNS12000000
Seasonally Adjusted
Series title: (Seas) Employment Level
Labor force status: Employed
Type of data: Number in thousands
Age: 16 years and over
Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Annual |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2000 | 136559(1) | 136598 | 136701 | 137270 | 136630 | 136940 | 136531 | 136662 | 136893 | 137088 | 137322 | 137614 | |
2001 | 137778 | 137612 | 137783 | 137299 | 137092 | 136873 | 137071 | 136241 | 136846 | 136392 | 136238 | 136047 | |
2002 | 135701 | 136438 | 136177 | 136126 | 136539 | 136415 | 136413 | 136705 | 137302 | 137008 | 136521 | 136426 | |
2003 | 137417(1) | 137482 | 137434 | 137633 | 137544 | 137790 | 137474 | 137549 | 137609 | 137984 | 138424 | 138411 | |
2004 | 138472(1) | 138542 | 138453 | 138680 | 138852 | 139174 | 139556 | 139573 | 139487 | 139732 | 140231 | 140125 | |
2005 | 140245(1) | 140385 | 140654 | 141254 | 141609 | 141714 | 142026 | 142434 | 142401 | 142548 | 142499 | 142752 | |
2006 | 143142(1) | 143444 | 143765 | 143794 | 144108 | 144370 | 144229 | 144631 | 144797 | 145292 | 145477 | 145914 | |
2007 | 146032(1) | 146043 | 146368 | 145686 | 145952 | 146079 | 145926 | 145685 | 146193 | 145885 | 146483 | 146173 | |
2008 | 146421(1) | 146165 | 146173 | 146306 | 146023 | 145768 | 145515 | 145187 | 145021 | 144677 | 143907 | 143188 | |
2009 | 142221(1) | 141687 | 140854 | 140902 | 140438 | 140038 | 139817 | 139433 | 138768 | 138242 | 138381 | 137792 | |
2010 | 138333(1) | 138641 | 138905 | 139455 | 139420 | 139119 | 138960 | 139250 | 139391 |
President Bush’s Federal income tax rate cuts of 2001 and capital gains and interest rate cuts of 2003 worked and the negative impact on the economy of the September 11, 2001 Islamic Al-Qaeda Jihadist terrorist attack was mostly minimized and avoided.
However, President Bush failed to control Federal Government spending by not vetoing the massive Government spending increases of both the Republican controlled House and Senate in 2005 and 2006 and the Democratic controlled House and Senate in 2007 and 2008.
President Obama followed the lead of President Bush and the Democratic controlled Congress by more than doubling the Federal budget deficits in 2009 and 2010.
Dan Mitchell on the Deficit
Dan Mitchell discusses Reagonomics vs. Obamanomics
The result is the Obama Depression with more than twice the number of Americans looking for a full-time job than the 13 million Americans that were unemployed in March, 1933, the worse month of the Great Depression.
President Obama is following in the footsteps of Presidents Herbert Hoover, Franklin D. Roosevelt, and George W. Bush by pursuing both the expansion of government with huge budgetary deficits (2009 was over $1,400 billion and 2010 is over 1,340 billion) and tax rate increases by letting the Bush tax rate cuts expire, supporting a massive cap-and-trade energy tax and imposing a mandatory health care plan on Americans that they must purchase or pay a tax penalty.
Feldstein Predicts Dollar to Weaken, Boosting Exports: Video
News Update: CBO Deficit estimates
The result is the same–massive unemployment–over 26 million seeking a full-time job and 41.8 million Americans on food stamps.
My recommendation made February 1, 2009 was to first have a six month payroll tax holiday on payroll and capital gains taxes and at the end of the six month period switch from the current Federal income tax system to the FairTax, which is a national sales consumption tax on the sale of all new goods and services.
American People’s Plan = 6 Month Tax Holiday + FairTax = Real Hope + Real Change!–Millions To March On Washington D.C. Saturday, July 4, 2009! Revised and Updated
The FairTax would replace all Federal personal and corporate income taxes, payroll taxes, Social Security taxes, Medicare taxes, capital gains taxes, interest and dividend taxes, alternative minimum taxes, estate and gift taxes.
The FairTax requires the repeal the 16th Amendment that gave the Federal government the power to collect an income tax.
“The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”
The FairTax is also progressive for it provides a prebate or check each month to every American to pay the sales tax on necessities of living such as food, clothing, housing, and energy (electricity and gasoline).
Had the FairTax been implemented with a six month payroll and capital gains tax holiday, the unemployment rate would have been significantly below 8% by now and the economy growing at a rate above 5%.
The FairTax: It’s Time
The recommended economic policy of cutting both Federal taxes and Federal Government spending and regulation had been tried and proved successful in the past when the United States entered the roaring twenties:
Why You’ve Never Heard of the Great Depression of 1920 | Thomas E. Woods, Jr.
Keynesian Predictions vs. American History | Thomas E. Woods, Jr.
While the above economic policy recommendations would still work, it will never happen under the existing ruling political class.
Unfortunately, the political ruling class based in Washington, D.C., both Democrats and Republicans, vigorously opposed those proposing the FairTax.
Comprehensive tax reform is opposed by the lobbyist and special interests on K Street in Washington D.C. who benefit from the complicated Federal Income Tax.
Professional politicians of both political parties need the campaign contributions of these special interests and lobbyists to run for re-election.
The real problem is simply too much Federal Government spending.
The high levels of Federal Government spending is what is driving the need for new and higher Federal taxation, every increasing borrowing to finance the deficits, and a reckless expansionary credit and monetary policy.
The solution is to cut Federal government spending by eliminating entire Federal Departments, agencies and programs.
That is why I recommended that Federal Government spending be limited to 80% of FairTax collections with the remaining 20% used to pay down the National Debt and fund entitlement (Social Security and Medicare) unfunded liabilities.
A Common Sense Political Agenda For A New Conservative and Libertarian Party: American Citizens Alliance Party (ACAP)–A CAP On Government Spending, Taxes, Debt and Regulations!
It’s Simple to Balance The Budget Without Higher Taxes
This solution is anathema to the progressive radical socialist of the Democratic Party led by President Obama.
Instead President Obama went with the failed economic policies of the Keynesian economists who always advocate more and more Federal Government spending, which is precisely what the progressive radical socialists want to impose on the American people.
Keynesian Economics Is Wrong: Bigger Gov’t Is Not Stimulus
As a direct result of President Obama and the Democratic Party controlled Congress failure in cutting Federal Government spending, closing permanently many Federal Departments and agencies and ending hundreds of Federal Government programs, while proposing even more and higher taxes, more Americans are now unemployed and seeking full-time employment than any time in the history of the United States.
The number of unemployed are twice that of the Great Depression!
The U-3 official unemployment rate will remain above 8% and the U-6 total unemployment rate will remain above 15% for at least another 36 months.
By then the American people will vote President Obama out of office.
By then the American people will vote those Democratic and Republican Senators and Representatives who failed to institute deep and permanent cuts to the Federal budget, a balanced or surplus budget and the FairTax.
President Obama is a progressive radical socialist ideologue.
Obama wants to grow the size and scope of the Federal Government and use coercion and government intervention in the form of higher taxes and pervasive government regulation to redistribute wealth and limit consumer sovereignty and the liberties of the American people.
Paul Ryan on how to break the capital strike
Krauthammer: “We Are Having A Capital Strike”
President Obama’s economic policies created massive economic uncertainty for consumers and businesses resulting in tens of millions of unemployed and underemployed Americans.
President Obama is a regime that must be changed if there is any hope for the tens of millions of unemployed Americans to find a full-time job.
On November 2, 2010 the American people will vote the Democrats out of office who were responsible for this economic disaster by massive government intervention into the economy and expansion of the size and scope of government.
Most Americans cannot wait to vote President Obama out of office in 2012.
Mr. President, you know you are an economic illiterate.
Do the right thing Mr. President, resign for the good of the country and the American people.
Just think, Mr. President, you will have more time to play golf, smoke and be with your family.
Everbody wins.
Good-Bye and Good Luck.
“Capitalism means free enterprise, sovereignty of the consumers in economic matters, and sovereignty of the voters in political matters. Socialism means full government control of every sphere of the individual’s life and the unrestricted supremacy of the government in its capacity as central board of production management.”
~Ludwig von Mises
Background Articles and Videos
Christina Romer explains a new report about job creation
The Job Impact of the American Recovery and Reinvestment Plan
By Christine Romer and Jared Bernstein
January 9, 2009
http://otrans.3cdn.net/45593e8ecbd339d074_l3m6bt1te.pdf
Christie Romer: The Only Surefire Way for Policymakers to Substantially Increase Aggregate Demand in the Short Run Is for the Government to Spend More and Tax Less
“…In a report that Jared Bernstein and I issued during the transition, we estimated that by the end of 2010, a stimulus package like the Recovery Act would raise real GDP by about 3 1⁄2 percent and employment by about 31⁄2 million jobs, relative to what otherwise would have occurred. As the Council of Economic Advisers has documented in a series of reports to Congress, there is widespread agreement that the Act is broadly on track to meet these milestones…. What the Act hasn’t done is prevent unemployment from going above 8 percent, something else that Jared and I projected it would do. The reason that prediction was so far off is implicit in much of what I have been saying this afternoon. An estimate of what the economy will look like if a policy is adopted contains two components: a forecast of what would happen in the absence of the policy, and an estimate of the effect of the policy. As I’ve described, our estimates of the impact of the Recovery Act have proven quite accurate. But we, like virtually every other forecaster, failed to anticipate just how violent the recession would be in the absence of policy, and the degree to which the usual relationship between GDP and unemployment would break down.
By February 2009, before the Recovery Act was passed, unemployment was already over 8 percent; and by June, before the Recovery Act could have had much of an impact, it was 9 1⁄2 percent… our projection turned out to be wrong even before the Recovery Act had a chance to get off the ground, which is about as clear-cut evidence as one could imagine that the problem was in our assessment of the baseline, and not in the effects of the Act….
I certainly don’t regret having done the study. During the Transition, the little paper helped to build the case both internally and externally for a stimulus of unprecedented proportions. Only in retrospect does saying that our best guess was that unemployment would rise to 9 1⁄2 percent without aggressive action look rosy. At the time, it was scary as hell. It helped convince both our team and the Congress to go for as big a program as possible. And laying down a firm marker that the legislation had to save or create 3 1⁄2 million jobs helped prevent the package from shrinking greatly during Congressional negotiations….
The thing I do regret is that there is still so much unfinished business. I would give anything if unemployment really were down to 8 percent or lower…. That the economy remains as troubled as it is despite aggressive action reflects the fact that this has not been a normal recession. Just as the downturn was uncharted territory, so is its recovery. Because the recession began with interest rates at low levels, we can’t just have interest rates fall and housing, investment, and other interest-sensitive sectors come roaring back as they typically do in recoveries….”
Democratic Pollster: GOP Poised to Seize House and Senate
By: David A. Patten
“…Republicans are on the brink of pulling off a landslide “of potentially epic proportions” that would bring them control of both Houses of Congress and a majority of governorships, Democratic pollster and Fox News commentator Douglas Schoen says.
In an exclusive Newsmax interview, Schoen says he now sees several indications that matters are going from bad to worse for Democrats in this election cycle.
He points to a RealClearPolitics.com analysis that now shows Republicans picking up a net gain of nine seats in the Senate, which would deadlock the upper chamber 50 to 50. And polls show several other GOP candidates, including Carly Fiorina in California and Dino Rossi in Washington state, remain within striking distance, he says.
Schoen, a pollster for former President Bill Clinton, is co-author of the new book “Mad as Hell: How the Tea Party Movement is Fundamentally Remaking Our Two-Party System.”
…”
http://www.newsmax.com/Headline/gop-polls-lead-democrats/2010/10/08/id/373121?s=al&promo_code=AF37-1
Monetization
“…Monetization is the process of converting or establishing something into legal tender. It usually refers to the printing of banknotes by central banks, but things such as gold, diamonds and emeralds, and art can also be monetized. Even intrinsically worthless items can be made into money, as long as they are difficult to make or acquire. Monetization may also refer to exchanging securities for currency, selling a possession, charging for something that used to be free or making money on goods or services that were previously unprofitable. …”
“…Monetizing debtIn many countries the government has assigned exclusive power to issue or print its national currency to independently operated central banks. For example, in the USA the independently owned and operated Federal Reserve banks do this.[1] Such governments thereby disavow the overly convenient ‘slippery slope’ option of paying their bills by printing new currency. They must instead pay with currency already in circulation, or else finance deficits by issuing new bonds, and selling them to the public or to their central bank so as to acquire the necessary money. For the bonds to end up in the central bank it must conduct an open market purchase. This action increases the monetary base through the money creation process. This process of financing government spending is called monetizing the debt.[2] Monetizing debt is thus a two step process where the government issues debt to finance its spending and the central bank purchases the debt from the public. The public is left with an increased supply of base money.
Effects on inflation
When government deficits are financed through this method of debt monetization the outcome is an increase in the monetary base, or the money supply. If a budget deficit persists for a substantial period of time then the monetary base will also increase, shifting the aggregate demand curve to the right leading to a rise in the price level.[3] When governments intentionally do this, they devalue existing stockpiles of wealth of anyone who is holding assets based in that currency. It is in essence a “tax” as the overall value of their assets decrease due to a loss in spending power. This is known as “inflation tax“.
To summarize: a deficit can be the source of sustained inflation only if it is persistent rather than temporary and if the government finances it by creating money (through monetizing the debt), rather than leaving bonds in the hands of the public.[4]
Examples
Monetizing the debt can be used as a component of quantitative easing strategies, which involve the creation of new currency by the central bank, which may be used to purchase government debt, or can be used in other ways.
However, there can be an insidious effect. As one observer noted:
When governments reach the point where they are borrowing to pay the interest on their borrowing they are coming dangerously close to running a sovereign Ponzi scheme. Ponzi schemes have a way of ending unhappily. To get out of the Ponzi trap, governments will have to increase tax revenues, or cut spending, or monetize the debt–or most likely do some combination of all three. [5] …”
http://en.wikipedia.org/wiki/Monetization
Quantitative Easing
“…The term quantitative easing (QE) describes a monetary policy used by central banks to increase the supply of money by increasing the excess reserves of the banking system. This policy is usually invoked when the normal methods to control the money supply have failed, i.e the bank interest rate, discount rate and/or interbank interest rate are either at, or close to, zero.
A central bank implements QE by first crediting its own account with money it creates ex nihilo (“out of nothing”).[1] It then purchases financial assets, including government bonds, agency debt, mortgage-backed securities and corporate bonds, from banks and other financial institutions in a process referred to as open market operations. The purchases, by way of account deposits, give banks the excess reserves required for them to create new money, and thus hopefully induce a stimulation of the economy, by the process of deposit multiplication from increased lending in the fractional reserve banking system.
Risks include the policy being more effective than intended, spurring hyperinflation, or the risk of not being effective enough, if banks opt simply to sit on the additional cash in order to increase their capital reserves in a climate of increasing defaults in their present loan portfolio.[1]
“Quantitative” refers to the fact that a specific quantity of money is being created; “easing” refers to reducing the pressure on banks.[2] However, another explanation is that the name comes from the Japanese-language expression for “stimulatory monetary policy”, which uses the term “easing”.[3] Quantitative easing is sometimes colloquially described as “printing money” although in reality the money is simply created by electronically adding a number to an account. Examples of economies where this policy has been used include Japan during the early 2000s, and the United States, the United Kingdom and the Eurozone during the global financial crisis of 2008–the present, since the programme is suitable for economies where the bank interest rate, discount rate and/or interbank interest rate are either at, or close to, zero.
Consumer Sovereignty
“…Consumer sovereignty is a term which is used in economics to refer to the rule or sovereignty of consumers in markets as to production of goods. It is the power of consumers to decide what gets produced. People use this term to describe the consumer as the “king,” or ruler, of the market, the one who determines what products will be produced. [1] Also, this term denotes the way in which a consumer ideologically chooses to buy a good or service. Furthermore, the term can be used as either a norm (as to what consumers should be permitted) or a description (as to what consumers are permitted).
In unrestricted markets, those with income or wealth are able to use their purchasing power to motivate producers as what to produce (and how much). Customers do not necessarily have to buy and, if dissatisfied, can take their business elsewhere, while the profit-seeking sellers find that they can make the greatest profit by trying to provide the best possible products for the price (or the lowest possible price for a given product). In the language of cliché, “The one with the gold makes the rules.”
To most neoclassical economists, complete consumer sovereignty is an ideal rather than a reality because of the existence—or even the ubiquity—of market failure. Some economists of the Chicago school and the Austrian school see consumer sovereignty as a reality in a free market economy without interference from government or other non-market institutions, or anti-market institutions such as monopolies or cartels. That is, alleged market failures are seen as being a result of non-market forces.
The term “consumer sovereignty” was coined by William Hutt who firstly used it in his 1936 book “Economists and the Public”. …”
http://en.wikipedia.org/wiki/Consumer_sovereignty
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Stimulus II: A Sequel America Can’t Afford
You’re a liar. The stimulus consisted of almost $300 billion in tax cuts and it’s a five year plan. Republicans have blocked or tried to block everything Obama and the Democrats have tried to do, so how can you say Obama’s policies have failed? Republican policies have succeeded in preventing any real action in being taken to improve the economy. This is a Republican depression, not Obama’s.
Ben Hoffman
October 8, 2010
Nonsense.
The Democrat Party has a majority in both the House and Senate.
The Republicans cannot block anything.
Instead of cutting Federal Government spending, Obama and the Democratic Party massively expanded the size and scope of the Federal Government.
Obama has generated so much uncertainty that both the American consumer and business have lost confidence in him and his economic policies.
Raymond
October 8, 2010