The Number of Americans In The Workforce Has Dramatically Increased

On Friday The Washington Free Beacon posted an article about the latest workforce participation rate.

The article reports:

The number of Americans either working or looking for work in the past month hit a record high of 160,056,000, the first time this number surpassed the 160,000,000 mark, according to numbers released by the Bureau of Labor Statistics. Last month, there were 159,716,000 Americans in the labor force.

There were 340,000 more Americans who joined the labor force in February, while 176,000 left. The number of Americans not participating in the labor force declined from 94,366,000 in January to 94,190,000 in February. The bureau counts those not in the labor force as people who do not have a job and did not actively seek one in the past four weeks.

The labor force participation rate, which is the percentage of the population that has a job or actively looked for one in the past month, increased from 62.9 percent in January to 63.0 percent in February.

Because the number of unemployed also went down, the unemployment number also went down from 4.8 percent in January to 4.7 percent.

The article also reported:

The “real” unemployment rate, otherwise known as the U-6 measure, was 9.2 percent in February, which declined from 9.4 percent in the previous month.

This is what the U-6 number has been from January 2005 through January 2016:

This is the true unemployment number, and it needs to continue to decrease.

Government Policies Do Impact The Economy

John Hinderaker at Power Line posted an article today about the latest economic numbers showing that the Gross Domestic Product numbers are not good.

The article includes the following chart:

Screen Shot 2015-05-29 at 11.07.02 AM

As you can see from the chart, the economy has not shown consistent growth since 2009.

The article concludes:

The administration always offers excuses for the economy’s inadequate performance on its watch–most recently, cold weather–but the common denominator is an anti-business, anti-growth administration that spends too much, wastes too much, incurs too much debt, and imposes too many costly regulations.

Our country was designed to be governed by laws made by lawmakers who would be held accountable by the voters. Unfortunately, we have evolved into a country where regulations made by unelected officials who are not accountable to anyone have crippled economic growth. It is long past time to elect leaders who will follow the constitution and not allow unelected bureaucrats to determine our economic future.

The Economy In Pictures

Economics is always better explained in pictures than words. Zerohedge.com recently posted 10 Charts which show the true condition of the American economy. I am not going to post all of them, but there are a few that really tell the story.

Total debt of Americans

Presentation Credit Market Instruments

The Home Ownership Rate

Presentation Homeownership Rate

The Inactivity Rate For Men In Their Prime Working Years

Presentation Inactivity Rate

Real Median Household Income

Presentation Real Median Household Income

We definitely need a change in President Obama’s economic strategy.

Economic Policies Have Consequences

Today’s Washington Examiner posted a story about Congressional Budget Office (CBO) statements on the condition of the American economy. The CBO is not optimistic about the future.

The article reports:

The CBO updated its fiscal projections Wednesday, and they reflected its new gloomy view that the future of the U.S. economy is one of slower growth and lower productivity.

“They think that we will get back up to potential growth,” said Loren Adler, an analyst at the Committee for a Responsible Federal Budget, “but they make it clear that they think potential growth is lower than it used to be in the ‘80s and ‘90s.”

The CBO first reached the conclusion that future growth will be slower when it released its long-term budget projections in July, but only incorporated it into its official 10-year budget projections Wednesday.

In its new projections, the CBO sees the economy suffering from a scenario in which its potential is slightly lower than before — 1 percent lower in 2024 than previously expected.

As a result of weak economic growth this year and slightly slower potential growth over the next 10 years, the CBO sees $514 billion in lost revenue.

…The CBO’s scenario — slower growth and permanently lower interest rates — is consistent with the “secular stagnation” scenario outlined by former Obama economic adviser and Harvard professor Larry Summers, who has argued that the U.S. economy may not be able to generate enough consumer demand for goods and services on its own without stimulus from the Federal Reserve or through federal spending.

The assumption that demand will return to normal “now seems problematic,” Stein (Center for American Progress’ Harry Stein) told the Washington Examiner, noting that he wasn’t sure whether the CBO assumed secular stagnation in its model.

So how do you grow an economy? Ronald Reagan seemed to have the answer–lower taxes. If you look at the deal that President Reagan made with Congress (a Democrat-controlled Congress), Congress was going to cut spending along with the tax cuts. Unfortunately, Congress chose to ignore their part of the bargain, and spending during the Reagan years increased greatly and deficits went up despite record tax revenues coming into the government. Even with the growing deficits, the economy grew rapidly once the tax burden was taken off of the people who create jobs and produce wealth. The Obama Administration has increased the income of the wealthy while leaving the middle and lower classes behind. This is the fruit of crony capitalism. The gap between rich and poor has increased during the Obama Administration–not decreased. If you want to see America prosper again, elect people to Congress who will cut taxes and cut spending.

Time For A Change Of Economic Policy

This is a chart from today’s Wall Street Journal:

The article reports:

Gross domestic product, the broadest measure of goods and services produced across the economy, contracted at a seasonally adjusted annual rate of 2.9% in the first three months of the year, according to the Commerce Department‘s third reading released Wednesday. That was the fastest rate of decline since the first quarter of 2009, when output fell 5.4%, and matches the average pace of declines during the recession.

GDP was recession-like in the first quarter, although most other data clearly signal that the decline is an outlier,” said Jim O’ Sullivan, economist at High Frequency Economics.

In its third GDP reading, based on newly available data, Commerce said first-quarter consumer spending and exports were even weaker than previously estimated. Consumer spending growth was lowered to 1% from 3.1% previously, largely because health-care spending was weaker than previously estimated.

President Obama has been in office since 2009. His economic policies have been in place for more than five years. It is becoming obvious that those policies have not been effective in reviving the American economy. It is time to send people to Washington who have new ideas that will encourage small business growth and turn the American economy around.

This Is Not What An Economic Recovery Looks Like

Katie Pavlich posted an article at Townhall.com today about the revised Gross Domestic Product (GDP) number from the first quarter of 2014. Initially, the  GDP growth number was listed at just .01 percent. That number has been revised downward to -1 percent. If the GDP number shrinks two quarters in a row, the economy is considered to be in a recession.

It is time for the Obama Administration to examine its economic policies. One way to boost the economy would be to approve the Keystone Pipeline and begin to develop America’s energy resources.

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The Economic Recovery In One Graph

Today’s Wall Street Journal posted a story about the latest Gross Domestic Product numbers. The article included the following graph:

The Wall Street Journal reported that the Gross Domestic Product grew at a seasonally adjusted annual rate of 0.1% in the first quarter of 2014.

The article in the Wall Street Journal explains some of the factors responsible for the low economic growth. Some suggested causes were the extremely cold winter which slowed consumer spending, and the sudden drop in exports, declining at a 7.6% pace in the first quarter.

Obviously, this is not the robust economy the President has been claiming.

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Hard Facts About ObamaCare

On Wednesday, Investor’s Business Daily posted a chart showing states and companies that have cut staffing levels or working hours because of ObamaCare. The chart only includes companies and states where strong proof is provided.

I can’t even post the chart because it is so long. It is sorted by state, and I strongly recommend that you follow the link above to see the chart for yourself.

The article states:

In the interest of an informed debate, we’ve compiled a list of job actions with strong proof that ObamaCare’s employer mandate is behind cuts to work hours or staffing levels. As of Sept. 25, our ObamaCare scorecard included 313 employers. Here’s our latest analysis, focusing on cuts to adjunct hours at nearly 200 college campuses. The ObamaCare list methodology is explained further in our initial coverage; click on the employer names in the list below for links to supporting records, mostly news accounts or official documents.

We’ll continue to update the list, which we encourage you to share and download into a spreadsheet to sort and analyze. If you know of an employer that should be on the list and can provide supporting evidence, please contact IBD at jed.graham@investors.com.

Keep in mind as you look at this chart that it represents real people with families to support, rents to pay, and financial responsibilities. ObamaCare needs to be stopped. I have no idea how that can be done, but it needs to be done. It will destroy the healthcare insurance industry and the American economy.

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How To Make Things Look Better When They Aren’t

Yesterday the Financial Times posted an article explaining that Brent Moulton, who manages the Bureau of Economic Analysis, has told the Financial Times that in July, government statistics will be updated to include such things as royalties and spending on research and development. Including those things will increase the size of the United States economy by 3 percent–making it appear that the economy has grown.

The article states:

“We are carrying these major changes all the way back in time – which for us means to 1929 – so we are essentially rewriting economic history,” said Mr Moulton.

This move represents a new international standard for Gross Domestic Product accounting. Considering the state of the world’s finances in general, I can’t help but wonder if this is simply a step into denial of the fiscal collapse that surrounds us at the present moment.

There is one aspect of the changes being made that I think is positive. The article reports that deficits in pension plans will also have to be included–what is promised will be measured as well as what is paid. These unfunded liabilities are something that federal, state, and local governments have kept below the radar for years–it will be good to see them brought out into the open.

The changes coming in July move us closer to worldwide accounting practices. I have very mixed emotions about that. The changes in July will also lull the low-information voters in America into believing the economy is growing at at least 3 percent. Believing that should be a stretch for anyone.

Please follow the link above to read the entire article. It is an interesting read.

 

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An Interesting Perspective On America’s Economic Future

Yesterday’s Wall Street Journal posted an article about the role of hydrocarbons in the American economy in the future.

The article states:

Since becoming president, Mr. Obama has treated hydrocarbon production like an infectious disease to be eradicated. His administration had to commission a study to learn, as announced last week, that allowing American companies to export liquefied natural gas would be beneficial to the U.S. economy. Still, the Department of Energy says it can’t make “final determinations” on export applications until it hears from those who object. So much for property rights.

America currently has the fastest rate of growth in production of oil and gas in the world. This is happening at a time when the demand for energy in America is slowing.  However, the worldwide demand for energy is increasing, creating a market for American energy exports.

The article goes on to describe energy developments in America, Canada, and Mexico:

Three democracies, sitting on vast resources, each have their own comparative advantages to offer an integrated continental market that could lead the world. Greater North American energy supplies imply millions of new jobs, higher tax revenues, plentiful energy for continental manufacturing and the end of reliance on hostile producers like Venezuela. But to reach optimum potential, investors need the freedom to explore, exploit and refine hydrocarbons and move output at every stage of production throughout the continent. In other words, governments need to get out of the way.

We can find our way out of the economic mess we are currently in–we just need to use the resources we have.

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The Impact Of Quantitative Easing (QE3)

Investors.com posted an article today on QE3 and the impact it will have on the American economy. The article points out that the economic problems America is currently experiencing are not due to a lack of money–their fiscal.

The article reports:

Fed chief Ben Bernanke defends the QE program, claiming Fed studies showed it boosted GDP by 3% and led to 2 million new jobs.

Even if true, the basic arithmetic is irrefutable: The Fed‘s tab for the QE program is now over $3 trillion. And most of that new money went to buy government debt — not to “stimulate” the private sector.

The article points out that banks and companies are currently holding on to their money rather than spending or investing it. One reason for that is the uncertainty about future tax policy and future federal spending.

The article concludes:

We don’t mean to sound conspiratorial, but a major Fed action coming just before an election is highly suspect — particularly when the sitting president’s foe has said he would not rename Bernanke to his Fed post in January 2014, when his term in office expires.

The government’s addition of $1 trillion a year to our nation’s debt hangs over this economy like a dark cloud, keeping entrepreneurs and big businesses alike on the sideline. The “fiscal cliff” we’re about to go over will sock Americans — especially entrepreneurs — with a tax hike of almost $1 trillion. That’s why the economy’s dead — not insufficient Fed money printing.

Bad leadership has consequences.

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Obamanomics Has Not Worked

Yesterday John Hinderaker at Power Line posted an article about the current state of the manufacturing segment of the American economy–it’s shrinking again. It is understood that President Obama inherited a miserable economy when he took office, but he has been in office for 3 1/2 years–it is now his economy. The annual growth of the economy this year is expected to be about 1.5%. In contrast, the annual growth of the economy during the fourth year of the Reagan Administration was 7.3%. Reagan also inherited a miserable economy, but his policies turned it around. I believe that if Mitt Romney is elected, his policies will turn the economy around.

This is how the manufacturing sector has looked for the past 10 years:

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One Indication Of How The Economic Recovery Is Going

Yesterday Business Week posted an article about what has happened to the wealth of the average American family since 1989.

The article reports on median family net worth:

1989: $79,600
1992: $75,400
1995: $81,200
1998: $95,500
2001: $106,100
2004: $107,200
2007: $126,400
2010: $77,300

As you can see, family net worth was climbing pretty steadily until 2007. Part of the reason for the drop is the housing bubble. That bubble was the result of the Congressional plan to enable all Americans to buy houses whether they could afford to pay off the mortgage or not. A lot of that had to do with Fannie Mae and Freddie Mac and their collapse, but even then, these numbers are disturbing.;

The article concludes:

The Fed changed its methodology for the survey starting in 1989, so it doesn’t compare current numbers with pre-1989 ones. At the risk of comparing apples and oranges, I went ahead and did the calculations for two earlier surveys—in 1962 and in 1983. In 1962, median net worth (in 2010 dollars) was $54,200. In 1983, it was $88,000.

If those numbers are correct, then median family net worth rose 62 percent from 1962 to 1983, then fell 12 percent from 1983 to 2010. Since the methodology of the survey changed, those numbers are almost certainly off, but there’s no way for an outsider to tell how much—or even in which direction. Still, if they’re anywhere close to reality, it’s more evidence of how the American economy has failed to generate rising living standards for most people in recent decades.

At the same time the net worth of families was declining, the cost of living has gone up–gasoline is double what it was five years ago, food prices have gone up, our tax burdens have increased, etc. Some of us are still paying real estate taxes on the value of our houses before the housing bubble burst. It really is time to elect people who understand the economy–the things we are currently doing are not working.

 

 

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