The Economy Worsens

For those that suffered through the President’s SOTU speech last month, few may have been deceived into believing the pretty picture painted by the President regarding the state of our economy.  The attentive were not.  That the economy is doing anything positive and worth commending in this anemic, so-called recovery has more to do with the strength and resiliency of the American people- despite the President’s stewardship, not because of it.

 

The President’s administration appears to welcome the expanding welfare state. Today’s jobless report once again showed that the continued drop in the unemployment rate- both national (6.6%; U-6 rate, 12.7%) and in respective demographics (blacks-12.1%, black teens-38%, Hispanics- 8.4%)- isn’t the result of the economy making the progress desperately needed, but rather the result of more Americans giving up hope and leaving the workforce.  However dishonestly the administration attempts to spin the news as good coming from the Labor Department, the stats don’t lie.

 

Consider the following-

            – Real median household income continues to fall;

            – The civilian labor force who have Bachelor’s degrees, older than 35 continues its historic fall;

            – The labor force participation rate of men between the ages of 25 and 54- men in their prime- continues to drop.  It’s estimated that close to 10.5 million men, aged 25 to 54 don’t have work.  This should be kept in mind the next time one hears about a so-called war on women;

            – Hours worked continues to decrease;

            – Fifty million Americans now live below the poverty level a number exacerbated during Obama’s presidency.  This is why many feel that the current strategy used in the “war on poverty” has failed;

            – According to the Corporation for Enterprise Development, half of Americans are living in what they call “persistent economic insecurity… making it difficult to look beyond immediate needs and plan for a more secure future.”  In other words, half of Americans are unfortunately living paycheck to paycheck.

All of this presents serious causes of concern for the economy now, and its effects on the future. Sadly, the news concerning the economy continues to grow more worrisome.

The Congressional Budget Office (CBO) released a report Wednesday stating unemployment remains historically high as a result of the slowest recovery following a recession since 1975.  Further, the report affirmed that despite the projections of decreasing unemployment rates in the future, the labor force participation rate would continue to drop (13-14).

The report also stipulates that as a result of the Obamacare’s subsidized provisions- provisions that decline with increased income- people will inevitably determine that there exists a considerable financial incentive (subsidies in combination with the current marginal tax rates) to work less, if at all (pg.14).  This negatively affects the labor force participation rate.  CBO analysts estimate that those responding to the incentive not to work could reflect upwards of 2.5 million jobs over the next ten years.  The report goes on to state that though total employment will increase, it will do so at a slower rate resulting from the Obamacare’s adverse affects  (p.117).

This job-loss projection doesn’t include the full impact of the employer mandate, which doesn’t go into effect until 2015.  Millions more jobs will be forfeited when employers calculate that penalties, layoffs, and reducing employee hours are preferable than increasing their labor costs and or going out of business. As the CBO report states, “[T]he costs of the penalty eventually will be borne primarily by workers in the form of reductions in wages or other compensation […] Because the supply of labor is responsive to changes in compensation, the employer penalty will ultimately induce some workers to supply less labor.”

In other words, Obamacare is the job-killer many knew it to be and over the next couple of years that truth will be laid bare for the country to see.

The response from Democrat lawmakers, and the President’s administration is expectedly, cartoonish spin and serves as more proof that they aren’t taking the economic situation seriously.

According to Rep. Chris Van Hollen (D., Md.), it’s a blessing as he says more Americans will have the freedom to “choose to work less or not at all” because the government has provided them with health insurance. 

Senate Majority Leader Harry Reid (D-NV) said that the report “rightfully says that people shouldn’t have job lock.  We live in a country where we should be free agents. People can do what they want.”

Whiskey, Tango, Foxtrot.

Chairman of the Council of Economic Advisors Jason Furman said, “This is not businesses cutting back on jobs.  This is people having new choices.”  Furman went on to say that this new freedom would create a dynamic marketplace that magically encourages entrepreneurship.

Jay Carney simply disagreed with the report because he didn’t like what it had to say. 

Job lock?” “Free agents?” “New choices?”  This is Alice in Wonderland.

The situation is so bad that the President finally acknowledged his unpopularity to Senate Democrats.   The President should try telling people something they don’t already know.

Unpardonably, the President and his party are idiotically embracing the job losses anticipated by the CBO report.  In a sane world, politicians, upon hearing such bad news, would pass legislation, reduce taxes and regulations, etc. to try and counter such bad economic news.

Not on Planet Progressive.

On Planet Progressive, projected and actualized job losses are celebrated and touted, asserting that the impending unemployment millions of Americans will face is a good thing because these Americans will be able to “choose” to work less hours and “choose” to be unemployed because they’re able to receive health insurance.  On Planet Progressive, unemployment is a good thing because the unemployed have health insurance even though they lack a consistent paycheck.  In what sensible way does this fantasy balance itself out?

I applaud and commend the determination of Americans who stubbornly attempt to persevere despite the odds.

But neither applause or “free” health insurance is enough for the American worker to pay his/her bills or overcome expanding government headed by a chief executive so stuck on stupid that our nation’s economy careens out of control.

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