A Dismal State of Affairs

by George Burns

Lately there has been a lot of chatter about the economy, government spending and jobs.  Let's take a look at some numbers to see what they say.  

Nicholas Eberstadt's recent Wall Street Journal  article points out that the full range of 2010 entitlement spending for programs such as Medicare, Medicaid, disability insurance, food stamps, subsidies, etc. at all levels of the government amounted to $2.2 trillion.  That equals about $29,000 for a family of four, or $7,200 for every man, woman and child in the country. 

According to the Census Bureau one out of every two households now receive benefits from at least one government entitlement program.  Given our declining economy and the rapidly aging of the baby boomer population government benefit pay-outs will continue to balloon, not to mention the cost of international diplomatic and military excursions. 

All wage earners making up to $110,100 per year pay required FICA taxes of 4.2 percent for Social Security and 1.45 percent for Medicare with employers paying the balance due of 12.4 percent for Social Security and 2.9 percent for Medicare.  Self employed workers must pay the entire amounts due for both programs.  Meanwhile only 51 percent of wage earners pay the income taxes that fund all other government expenditures.

Because of the malfeasance of both major political parties and their private sector collaborators/financiers we face at least two guaranteed futures: 1) non-stop growth of our national debt and its associated interest payments, and 2) ever increasing taxes.  Put another way, The Congressional Budget Office estimates that absent corrective legislation to slow/arrest government spending, taxes will consume two-thirds of the income of middle income families by 2050 as well as 90 percent of those with higher incomes.  To paraphrase Margaret Thatcher, governments inevitably collapse when taxpayers run out of  money.  That her observation is relevant to our current situation was reinforced on 14 September 2012 when the Egan-Jones credit rating agency announced that it would reduce the US credit rating from AA to AA-.  They made this announcement because of the Federal Reserve's decision to implement a third round of quantitative easing which, Egan-Jones believes, is nothing more than further monitization of the US debt - a continuation of increasing the amount of national debt and dollars in the economy which has the effect of reducing the value of each dollar in circulation.  The consequence will be a continuing rise in the prices of goods and services which will further stress the overall economy.

Consider this observation by Tim Philips.  Starting 10 September 2012 and "for the remaining 108 days of the year, every single dollar the federal government spends, roughly $10.5 billion per day, goes on our collective credit card called the national debt. You and I, our children and their children are of course responsible for paying that debt.  Every single second of the day our government spends over $12,000."  Philips adds that about every five minutes our government spends $3.6 million. "It takes four seconds for the government to spend what the average American earns in an entire year."

   

The current state of the economy and the most recent jobs numbers do not offer hope for any improvements mitigating the sad reality summarized in the previous paragraphs.  Here are a few more cogent facts.

     The US population is now 8.8 million larger that when President Obama took office; but, there are 86,000 fewer people with jobs.  Yet he claims to have created 4 million jobs during his tenure.  He should, instead, be reporting that despite the 4 million jobs added there are still 86,000 fewer people with jobs than when he took office.

     The number of people employed or seeking work has dropped to 63.5 percent, the lowest level since September 1981.

     Last month 568,000 people stopped looking for a job. Only 96,000 jobs were added.  And the US population increased by 212,000.

     CNSNEWS.com reported that the Department of Labor found that in August a  record high 88,921,000 Americans were no longer in the civilian labor force.  In July the total work force was 155,013,000 but that number fell to 154,645,000 in August. 

When President Obama took office the national price of gas averaged $1.85 per gallon.  Today it is nearing $4.00 per gallon.  Throughout his time in office his administration has either shut down or hindered extraction of domestic oil supplies in favor of expensive and failing alternative fuel initiatives. 
   

     Timesfreepress.com reports that "Shortly before he became President Obama's energy secretary, Steven Chu declared, 'Somehow we have to figure out how to boost the price of gasoline to the levels in Europe' -- which were around $8 per gallon at the time."

     During a Senate debate about opening up domestic offshore oil drilling sites then Senator Ken Salazar, now Obama's interior secretary, objected to an increase in offshore drilling even if it meant the price of a gallon of gasoline would cost $10 or more.

     That President Obama agrees with both Chu and Salazar was confirmed when he closed down the Green River Formation, the world's largest oil field located in three western states.  It is estimated to contain 3 trillion barrels of oil, eight times the amount in Saudi Arabia.  In a report titled GAO To Obama: More Oil Than Rest Of The World, the Government Accountability Office told Congress that the Green River Formation contains "an amount about equal to the entire world's proven oil reserves."  What then are we to make of Obama's often repeated lie that “We cannot drill ourselves out of the oil crisis, we only have just 2% of the world’s oil.”?  Harvesting domestic oil resources would be a huge boost to the economy (business expansion, jobs, increased tax revenues) but the current administration will not permit it.

And we haven't even touched upon the housing market, the looming student loan debacle, declining manufacturing, too big to fail financial institutions, expanding oversees committments, balooning government regulations, government waste and the list goes on and on.  Presidential candidates are laying out their positions and making promises.  But, promises are easy.  Not so delivering on those promises as the last four years proves.  Whoever wins in November faces major challenges.  It is up to voters to decide whether a change in management will make a difference.  I can hope but I'm not so sure it will.


Sources.

http://townhall.com/columnists/johncgoodman/2012/09/08/which_party_is_the_party_of_big_government

http://finance.townhall.com/columnists/bobbeauprez/2012/09/08/devastating_jobs_report_86000_less_jobs_today_than_when_obama_took_office

http://townhall.com/columnists/stephendemaura/2012/09/08/with_corporate_tax_reform_the_private_sector_will_rebuild_our_economy

http://cnsnews.com/news/article/record-88921000-americans-not-labor-force-119000-fewer-employed-august-july

http://www.bloomberg.com/news/2012-09-07/payrolls-in-u-s-rose-96-000-in-august-jobless-rate-falls.html

http://beforeitsnews.com/alternative/2012/09/what-obama-does-not-want-you-to-see-2463684.html

http://www.theblaze.com/stories/flashback-obama-scoffed-at-bush-jobs-report-showing-gain-of-300k-jobs/

http://www.aei-ideas.org/2012/09/the-awful-awful-august-jobs-report/

http://www.cnbc.com/id/49037337

http://www.activistpost.com/2012/09/10-shocking-quotes-about-what-qe3-is.html

http://www.timesfreepress.com/news/2012/mar/02/high-gas-prices-serve-a-good-purpose/

http://rpc.senate.gov/public/index.cfm?p=Blog&ContentRecord_id=468a59d6-4f5a-4b58-9244-5f9ae2665c14

http://globaleconomicanalysis.blogspot.com/2012/09/household-survey-number-of-employed.html#RMVBAAfa9ykPisPf.99

http://online.wsj.com/article/SB10001424052702303561504577497442109193610.html

http://news.investors.com/ibd-editorials/091312-625709-quantitative-easing-hasnt-been-a-success.htm

http://reason.com/archives/2012/09/12/worse-than-the-recession

http://finance.townhall.com/columnists/johnransom/2012/09/14/lots_of_recoverable_oil_but_one_nonrecoverable_president/page/full/

http://www.breitbart.com/Big-Government/2012/09/08/Real-Unemployment-Now-19

http://www.nationalreview.com/articles/316854/cost-wind-energy-jobs-robert-bryce

http://www.washingtonpost.com/opinions/robert-samuelson-are-you-better-off-now/2012/09/06/3a2ffc5e-f792-11e1-8398-0327ab83ab91_story.html

http://www.nationalreview.com/articles/316377/obama-doubled-jobs-deficit-bob-beauprez

http://www.americanthinker.com/blog/2012/09/the_truth_about_the_unemployment_rate_in_2_graphs.html


Additional Items.

http://pjmedia.com/tatler/2012/09/09/behind-the-unemployment-numbers-its-worse-than-you-can-imagine/?singlepage=true

http://townhall.com/columnists/thomassowell/2012/09/11/an_economic_plan/page/full/

http://townhall.com/columnists/phyllisschlafly/2012/09/11/democrats_have_no_plan_to_create_jobs

http://www.nationalreview.com/articles/316377/obama-doubled-jobs-deficit-bob-beauprez

http://dailycaller.com/2012/09/10/unemployment-would-be-11-2-percent-if-labor-force-same-as-when-obama-took-office/

http://www.washingtontimes.com/news/2012/sep/7/obamas-broken-record/

http://www.breitbart.com/Big-Government/2012/09/09/Study-Recovery-for-low-wage-jobs-burger-flippers

http://www.americanthinker.com/2012/09/un-spinning_jobs_numbers.html

http://dailycaller.com/2012/09/10/quick-and-easy-rebuttals-to-obamas-false-narratives/

http://townhall.com/columnists/timphillips/2012/09/17/105_billion_per_day/page/full/

http://www.foxnews.com/politics/2012/09/11/us-slips-from-no-1-to-also-ran-in-global-economic-rankings/

http://www.forbes.com/sites/briandomitrovic/2012/09/11/obama-has-had-plenty-of-time-but-gave-us-0-3-growth-instead/

http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/09/09/everything-people-think-they-know-about-the-stimulus-is-wrong/

http://www.moneynews.com/StreetTalk/Taxpayers-Owed-Billion-Bailouts/2012/09/11/id/451478?s=al&promo_code=10096-1

http://republicbroadcasting.org/index.php?cmd=news.article&articleID=4100

http://finance.townhall.com/columnists/mikeshedlock/2012/09/14/panic/page/full/

http://cnsnews.com/news/article/social-security-and-disability-payments-hit-annual-records-month-left-fy

http://www.heritage.org/research/reports/2012/09/fy-2013-continuing-resolution-spends-every-dollar-and-more

http://www.csmonitor.com/USA/2012/0912/US-incomes-fall-to-1989-levels.-How-did-that-ha