American Elephants


More Taxes, More Spending — Not The Way To Grow The Economy by The Elephant's Child

President Obama used his weekly address this last weekend to talk about his priorities and misstate every available fact. Does anyone listen to these weekly utterances? He said:

Our top priority as a nation, and my top priority as President, must be doing everything we can to reignite the engine of America’s growth; a rising thriving middle class. That’s our North Star. That must drive every decision we make.

Now, yesterday, we learned that our businesses created 95,000 new jobs last month. That’s about 500,000 new jobs this year, and nearly 6.5 million new jobs over the past three years.

There were 88,000 new jobs in March, but 660,000 more people left the labor force. When you subtract 660,000 from 88,000, you don’t get North Star quality job growth, nor any job growth at all. Mr. Obama insists on counting only the pluses and ignoring anything that might reflect badly on him. He claims that he has already reduced the deficit by more than $2.5 trillion (smoke and mirrors) and his budget will reduce our deficits by nearly $2 trillion more (also nonsense). He speaks of “the investments that a growing economy needs” — a euphemism for more Obama spending directed to his cronies.

Jobs that are created by taking more in taxes out of the private economy, which is spent on some business promoted by his supporters, don’t grow the private economy. He is simply campaigning again, not governing. When the president says “investment” he’s talking about having more money to spend. A government job is not growth, it is a cost for America’s taxpayers. Americans are glad to support necessary services, but that threshold was left far behind many years ago.

Obama’s budget request will be formally released on Wednesday. It is supposedly an ‘olive branch’ to Republicans on entitlement reforms. Mr. Obama will accept changes in the Social Security cost-of-living-adjustment (COLA) to reduce the growth of benefits over time, but to get that Republicans would have to accept higher taxes for Obama to “invest.” The growth in cost of Social Security and Medicare needs reform, but simply taking it out of seniors’ benefits, and paying medical providers less  is not a solution. It is quite possible to reduce expenditures without harming seniors and without depriving them of needed medical care, but Obama is never interested in making anyone less dependent.

In tomorrow’s Wall Street Journal, William Poole says that ‘journalists, commentators and policy makers should ignore the projection of reductions in the budget deficit. To do otherwise is to be complicit in fraud.”

For 50 years or so the federal government has deliberately and to an increasing extent misstated probable future budget deficits. Democrats and Republicans are guilty. The White House is guilty. And so is Congress. Private firms that deliberately misrepresent their financial statements in this fashion would be guilty of a crime.

The magnitude of the misrepresentation is breathtaking. For one example, the bitterly contested “fiscal cliff” legislation (the American Taxpayer Relief Act of 2012) raised the top income tax rate to 39.6%. However, the Congressional Budget Office’s latest (early February) deficit projection for 2013-22 is now $4.6 trillion higher than the baseline deficit it projected in mid-2012. After the tax increase, how can that be? …

Fortunately, some years ago the CBO began to present “alternative scenario” budget projections, in which differences from current-law projections are explained in detail. In its early February update, one example is that the 25% cut in physician Medicare reimbursements scheduled for next Jan. 1 will not occur. That adjustment increases the projected deficit in 2023 by $16 billion, and cumulatively by $138 billion from 2014-23. Congress has overridden the scheduled cut in physician reimbursements every year since 2003, in a legislative provision known as the “doc fix.”

Mr. Obama’s attempts to paint a rosy picture of his accomplishments, and to demand more taxes so he can do more of the same “investment” that he has been doing for the last four years should be rejected. It is hooey, political posturing, confirmed by the participation of Americans in the labor force. The rate of participation has fallen to 63.3%, which is the lowest level since May of 1979 when the country was mired in stagflation under the administration of President Jimmy Carter.

That means that 9,460,000 people have given up looking for work since Obama was inaugurated in January of 2009, when 80, 507,000 Americans were out of the labor force.  That’s nearly 90 million people (89,967,000) who have stopped looking for work and dropped out of the workforce altogether. The climbing numbers of people on welfare, Social Security disability, receiving food stamps are disturbing, but compassionate people believe in a safety net to protect those in trouble, while we resent those who game the system. But the number and the percentage of the population of those who have simply given up hope of finding a job is a record of real despair.


3 Comments so far
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Obama may attempt to paint a rosy picture of his accomplishments, but as a friend’s father used to (rather colorfully) say, “If you put pink frosting on a pile of dog s***, you do not have a cupcake”.

His positive accomplishments as President are pretty much nil, his supposed great speaking ability now only impresses the choir, and into the fifth year of his tenure he still can’t figure out how to persuade that half of the people he supposedly leads who do not agree with him, only attempt to demonize them.

And now he’s presented a budget with elements his own party hates, and is thinking this will make him look “bi-partisan”, simply because he has now annoyed Democrats as well as Republicans. What these annoyed Dems seem to keep overlooking is that Obama has one over-arching goal, and that is the continued admiration of Obama. If he has to sacrifice the core of the Democrat Party to that end, at this point (now that he no longer needs them to be re-elected) he most certainly will.

Obama and his flacks can try to continue to blame everything on Republicans (one of the White House press flacks was on yesterday afternoon talking about the “…low approval of Republicans in Congress”, when the numbers he was referring to talked about Congress as a whole), but that’s worn so thin that the Washington Post and the New York Times have already started calling him out on it.

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Comment by Lon Mead

AE when you say 660,000 people left the work force does that mean they dropped off of unemployment benefits, is that how they know that number? Only for a fleeting moment do i think i understand then when i try to verbalize it i seem to get lost half way through.

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Comment by hey_sherm

To receive unemployment benefits (theoretically) you have to be actively looking for work. The Unemployment rate = Unemployed workers divided by the Total Labor Force. The 660,000 are those who have been on the rolls of the unemployed but have quit looking for work— because their benefits ran out, because they just gave up, because they went on Social Security Disability (easy to get). Go to Wikipedia.org and enter: Unemployment. They include European measures as well, the article is long, but it includes definitions and the various political theories about unemployment. Liberals think of it in different terms than Conservatives do, which is part of the problem. The people of small business (50 employees or more ) the usual engine of employment, have told us quite clearly why they are not hiring: ObamaCare, Uncertainty about taxes, Over regulation, Uncertainty about what Obama will do next, uncertainty about the cost of energy, and uncertainty about the economy in general. If they have more than 50 employees, ObamaCare gets prohibitively expensive.

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Comment by The Elephant's Child




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