What Has He Done?

The mainstream media delights in talking about Donald Trump. They bash him on a regular basis–they don’t like his tweets, they don’t like what he says at his rallies, they don’t like the judges he appoints, etc. But when was the last time you heard any of the media mention anything that President Trump has accomplished in his almost two years as President? It seems as if that might be a consideration in the mid-term elections.

Yesterday The Gateway Pundit posted a list of President Trump’s accomplishments.

I will attempt to summarize that list here:

The stock market on Wednesday, January 17th, 2018, said it all.  On that day the Dow broke 26,000 points for the first time in its history. As a result the Dow broke the record for the fastest 500, 1,000, 2,000, 3,000, 4,000, 5,000, 6,000 and 7,000 point increases between major milestones in the history of the Dow. All of these increases occurred since Donald Trump was elected President.

…President Trump however reached a GDP of 4.2% in the 2nd quarter of 2018 and 3.5% in the 3rd quarter.  With a GDP in the 4th quarter of around 3%, the GDP for the year will be greater than 3%.  Something the prior President Obama never did and said no longer could be done.

In regards to debt, President Obama increased the amount of US debt astronomically. By the time Obama left office he had doubled the US debt to $20 trillion and incurred as much debt as all previous Presidents combined. President Trump is slowing that trend.

…With his increasing GDP and slowing of debt increases, President Trump has managed to decrease the debt to GDP ratio in the 2 years since the 2016 election.

…President Trump is the ‘Jobs President’.  Yesterday, the Bureau of Labor Statistics reported that 250,000 new jobs were created in October.  In President Trump’s first two years since elected President, the US has gained over 4.3 million jobs.  (In President Obama’s first two years the US lost over (4.2) million jobs.)  More people are working in the US than ever before and unemployment is at 50 year lows landing at 3.7% last month.

…President Trump vowed to destroy ISIS. Despite President Obama saying that ISIS will be around for a generation, these murderers and terrorists in the Middle East were decimated over the President’s first year in office. Both Syria and Iraq declared victory over ISIS and due to President Trump’s resolve, less than 1,000 ISIS fighters remain.

…The President refused sending Pakistan security assistance in the millions due to the Pakistani’s harboring terrorists. He stopped an Obama last minute $221 million transfer to Palestine and cut aid to Palestinians in half. He showed that the US is unwilling to work with Muslim entities that support radical Islam.

…President Trump signed more than 90 executive actions in his first 100 days alone.  The White House.gov site lists 81 pages of Executive Actions in the two years since the President was elected into office.  The actions include –

* Dismantling Obama’s climate change initiatives.
* Travel bans for individuals from a select number of countries embroiled in terrorist atrocities.
* Enforcing regulatory reform.
* Protecting Law enforcement.
* Mandating for every new regulation to eliminate two.
* Defeating ISIS.
* Rebuilding the military.
* Building a border wall.
* Cutting funding for sanctuary cities.
* Approving Keystone and Dakota pipelines.
* Reducing regulations on manufacturers.
* Placing a hiring freeze on federal employees.
* Exiting the US from the TPP.

There is much more, but you get the picture. Please follow the link to the article to read the entire list. It is amazing that the mainstream  media has reported very little if any of this. If you wish to see these accomplishments continue, vote Republican on Tuesday. If you wish to go back to a low workforce participation rate, more regulations, and higher taxes, then vote Democrat.

Economic Policies That Get Results

The Conservative Treehouse posted an article yesterday about the latest Global CFO Council report on the world economy. The Global CFO Council is made up of Chief Financial Officers of the world’s largest 113 companies that combined are worth nearly $5 trillion. Interestingly enough, most of these CFO’s are on the record as being opposed to President Trump’s trade policies.

The article includes the following:

Economic policies matter. We are not reflecting a worldwide economic recovery–we are leading it.

 

What Did He Do?

CNBC announced today that economic growth for the second quarter of 2018 was 4.1 percent. That is the fastest pace in nearly four years. So exactly what did President Trump do to help the economy come out of the slump it has been in? First let’s look at some history.

In March 2017 The New York Post reported the following:

With Thursday’s final revision of fourth-quarter GDP growth to 2.1 percent from its previous 1.9 percent level, President Obama is the only president since Herbert Hoover to not have guided the US economy to 3 percent growth in any year he was in office.

…Obama’s best year, as far as growing the economy, was 2015 when it grew 2.6 percent from 2014 — after growing 2.4 percent that year from 2013.

To understand the roots of the rapid economic growth, we need to look at some of the things President Trump has done since taking office.

In April of 2018, The Daily Caller reported:

In celebration of Earth Day, The Daily Caller News Foundation takes a look at the biggest climate regulations and agreements President Donald Trump’s administration has put on the chopping block, unshackling U.S. businesses from burdensome regulations and curtailing former President Obama’s climate legacy.

Here is a list of some of the regulations that ended or were changed:

Environmental Protection Agency administrator Scott Pruitt would sign a proposed rule to repeal the CPP (Clean Power Plan), he announced on Oct. 10, 2017. Undoing the rule will save Americans $33 billion in compliance costs, despite the previous administration claiming it would only cost $8.4 billion and save millions through public health benefits, EPA officials estimated.

…Trump signed an executive order on February 28, 2017, calling for a review of the plan (Waters of The United States). On June 27 of that year, Pruitt would repeal the rule, he announced. The EPA is now in the process of reissuing the order but with a more clear definition of “waters of the U.S.” meant to lower compliance costs to businesses and minimize intrusion to private property.

…In December 2017, Obama utilized a provision in the Outer Continental Shelf Lands Act to prohibit offshore drilling in large portions of the Atlantic and Arctic Oceans. Enacted during the waning days of his presidency, the move was meant to cement the former president’s environmental legacy.

Just four months later, Trump signed an executive order undoing all of this. The “America-First Offshore Energy Strategy” — Trump signed on April 28, 2017 — is an executive order that makes millions of acres of federal waters available for offshore drilling and exploration. Vice President Mike Pence referred to the order as a job creator and “an important step toward American energy independence.”

You get the picture. This was a very targeted approach–first you free businesses from over-regulation by the government, then you help America become energy independent (which is also a good idea for security reasons). Then to top it off, you pass a tax cut to allow American taxpayers to keep more of the money they earn.

Just for the record, Forbes reported in October 2017, America had reduced its carbon emissions. It is possible to limit both regulations and carbon emissions.

These are the strategies that have caused the rapid growth in the American economy. They are common-sense strategies that anyone could have implemented. The obvious question now is why didn’t someone do this before? We need to remember that businessmen solve problems and politicians talk about problems and calculate votes. It has become increasingly obvious that a President who is a businessman will do more good for America than a President who is a politician.

What Some Economists Are Saying About President Trump’s Proposed Tax Plan

The Washington Free Beacon posted an article today about President Trump‘s proposed tax plan. The article reports on a new study from Boston University economists.

The article reports:

“We find that, depending on the year considered, the new Republican tax plan raises GDP by between 3 and 5 percent and real wages by between 4 and 7 percent,” the economists explain. “This translates into roughly $3,500 annually more annual real take-home pay for the average American household.”

Economists believe this growth can happen due to the plan’s aim to reduce the marginal effective corporate tax rate from 34.6 percent to 18.6 percent, which they believe will grow the capital stock by 12 to 20 percent.

The article concludes:

The study also says every American can benefit from this tax reform framework.

“The [Unified Framework] tax reform delivers small increases in lifetime welfare to current retirees and moderate ones to workers and future generations,” the study states. “All generations benefit from the policy. The old benefit slightly from higher rates of return on their investment, and the young from higher wages.”

The Boston University study is similar to the findings from the Council of Economic Advisers study put out earlier this week, which said that the average household income could increase by $4,000 annually if the corporate tax rate was cut from 35 percent to 20 percent.

“The truth is that a tax cut like this very conservatively will increase the median wage by about $4,000 a year over a relatively short time,” said Kevin Hassett, the chairman of the Council of Economic Advisers. “If you look at some of the more optimistic estimates of the literature and then run the thing over time you could be looking at $10,000, even $20,000 higher wages relative to baseline, and that’s the message of this tax reform.”

The economy is growing right now at a much faster rate than it did under President Obama. There are a number of reasons for that. President Trump has been quietly removing the government regulations that were a drag on the economy. President Trump has also allowed the coal industry to resume operations and allowed other businesses to work toward American energy independence. As a result of this, gasoline and other energy prices are relatively low right now, making America a desirable place to do business. Also, the lower gasoline prices result in more money in all Americans’ pockets. Low gasoline prices impact everyone who drives–they are the equivalent of a tax cut for everyone. When people have more money in their pockets, they do things like go out to dinner, go shopping, or go to a movie. This puts money in the pockets of the people who work in those industries. Everybody wins.

Elections Do Have Consequences

In November, the American voters elected Donald Trump as President. I am not sure that the political left has yet recovered from what they would consider their worst nightmare. However, we are where we are. So where are we?

On October 7th, Wayne Allyn Root posted a story at Townhall describing the current state of the American economy.

Here are some highlights from the article:

The DOW has risen almost 25% since Election Day. That’s an increase of over 4,300 points in about 11 months. That’s the biggest increase in that period of time in the history of the stock market.

The S&P 500 has passed $20 trillion in value for the first time in history.

Because most middle-income Americans now have 401k plans because they are smart enough not to rely on Social Security, this is important to the average American.

More highlights:

As I’ve always argued, GDP is a far more important economic indicator than the stock market. GDP is hard evidence of how “mom and pop” are doing on Main Street. Under Obama, America suffered the eight worst consecutive GDP years in history. Obama’s eight-year GDP average was 1.3%- the exact same GDP number as the period of the Great Depression.

According to the Bureau of Economic Analysis, U.S. GDP has now been adjusted to a remarkable 3.1% growth in the second quarter (Trump’s first full quarter as president). That’s almost THREE TIMES HIGHER than Obama’s average GDP over his two terms.

Then there is job growth:

President Trump added 1.33 million jobs from January through September versus Obama’s record of losing 4.59 million jobs in that same first nine months. Remarkable.

But the latest jobs report just came out on Friday. According to the Bureau of Labor Household Survey, the number of employed Americans increased by an amazing 906,000 for the month of September. But that’s not even the highlight.

Remember that almost every single job created in eight years under Obama was a crappy, low-wage, part-time job. Well under President Trump last month, full-time jobs (the kind we all want and need) increased by 935,000- the most in one month in the 21st century. 

You would think that this sort of economic growth would put a damper on ‘Trump derangement syndrome.’ However, it seems to have had exactly the opposite effect. I think that is the result of the fact that the Washington establishment is working very hard to make sure President Trump does not succeed. Why? He is not a globalist, and he is not a Washington insider. His success would be a threat to the Washington establishment’s ability to come to Washington as middle-class Americans and leave twenty or thirty years later as  millionaires. As President Trump begins to accomplish things that have a positive impact on average Americans, expect the Washington establishment in both parties to become louder and more shrill.

It’s All A Matter Of Perspective

On Friday, Investor’s Business Daily posted an article about the American economy under President Trump. The article mentioned that the media is calling the 0.7% growth in the first quarter of 2017 a “lackluster beginning.” Somehow lost in that comment is the fact that President Trump did not take office until the end of January and that the Democrats in Congress have slow walked his cabinet appointments and obstructed anything he has attempted to do. Other than that, they have cooperated fully in helping improve the American economy.

The article reminds us:

CBS and the Associated Press tell us the first quarter’s “lackluster beginning … marks the first quarterly economic report card for President Donald Trump, who has vowed to rev up the U.S. economy.”

The Wall Street Journal, which should know better, called the number “the broadest report card on the economy in the nearly 100 days since President Donald Trump took office pledging a return to faster growth. …”

Bloomberg correctly stated that “the first-quarter figure isn’t a verdict on President Donald Trump’s policies,” but then added that economists are “generally skeptical that growth will reach his goal of 3% to 4% on a sustained basis.”

To start with, it’s simply not correct on any level to call this GDP number a “report card” on Trump. He hasn’t been in office long enough to take credit or blame for the GDP number, which, as any economist will tell you, is heavily influenced by policies in place well before the number ever comes out. That means President Obama.

The article contrasts the skepticism about President Trump with the mainstream media’s fawning over President Obama when he took office:

We tried to find mainstream media critiques of Obama’s policies early in 2009, but there were virtually none. In Obama’s defense, he did face a 6.1% decline in GDP in his first quarter. But no one blamed him for that. Instead, there was lavish praise, even as he stumbled from error to error. They blamed Bush.

For instance, the Media Research Center quotes Time’s Joe Klein, who wrote: “The legislative achievements have been stupendous — the $789 billion stimulus bill, the budget plan that is still being hammered out (and may, ultimately, include the next landmark safety-net program, universal health insurance).”

The article correctly concludes:

Eight years later, here is Obama’s “report card”: Slowest economic expansion for any president since the Great Depression, averaging just 2%, with no annual growth of more than 3%. More than $6 trillion in deficits, and a doubling of the nation’s debt to $20 trillion. A decline in real median household incomes of more than $4,000. Drops in homeownership to the lowest level since 1966. Labor participation rates near three-decade lows.

Sure, give Trump some time, and he’ll generate his own grades. But the first quarter GDP number has little or nothing to do with him, and the media’s bias is showing in suggesting it does.

There is a reason many Americans are tuning out the mainstream media in droves. If the mainstream media continues on its present path, there will be about two or three people actually paying attention to what they say.

 

What Tax Reform Can Do

President Truman is quoted as saying, “It’s amazing what you can accomplish if you do not care who gets the credit.” He also said, “You can’t get rich in politics unless you’re a crook.” We are seeing the truth in both of those observations in the current tax debate.

This is a picture of America‘s Gross Domestic Product (GDP) in recent years from the balance:

You might remember that 2012 was the year the tax increases to pay for ObamaCare began. In 2013 the Capital Gains tax increased for high income earners, and the increase in the medicare payroll tax also began in 2013. Obviously raising taxes did not help the economy.

This is the laffer curve:

As you can see, there is a point where tax increases no longer generate revenue.

I am going to assume that Democrats are going to try to block President Trump’s tax reform. I think that is rather obvious. So the question becomes, “Do Democrats not understand economic principles and economic growth (e.g. the Laffer curve) or do they simply want to enslave the American worker?” At this point it is a valid question.

I can understand high-tax states not wanting to give up the benefit they reap in the current tax code. I can also understand all the lobbyists tearing their hair out because their special interest will no longer get a tax break, but at some point Congress needs to do what is best for the country and for the American people. Economic growth is struggling under the current tax burden. Every American who works is giving the government a higher percentage of what they earn than the Medieval surfs paid their lords. That is a scary thought. At the same time, many people who choose not to work are driving expensive cars and living better than the people who do work. The poverty in America that the government is now supporting currently owns a nice car, a big-screen television, an ipad, a smart phones, and central air conditioning. I am all for helping people in time of need, but I think we have lost our way.

Congress needs to pass President Trump’s tax plan. Every Congressman who does not support the plan needs to be voted out of office as soon as possible. Unless the American voters begin to hold their representatives accountable for what they do, the swamp will never get drained. The problem is in both political parties. It is time to take note of the people whose votes help America and the people whose votes hurt America.

 

Don’t Get Too Excited About The 5% Economic Growth

Some things are just not what they appear to be. John Hinderaker posted an article at Power Line today about the 5% GDP increase in the third quarter of 2014. Admittedly, that sounds really good, but unfortunately, there is a fly in the ointment.

The New York Times was all abuzz on Tuesday::

So here, for the holidays, is the festive news: The economy roared ahead at a 5 percent annual growth rate in the July through September quarter, the fastest quarterly growth since 2003.

…The biggest revision that boosted G.D.P. was in personal consumption spending, the biggest engine of overall economic activity, which rose at a 3.2 percent annual rate, not the 2.2 percent rate earlier estimated. That suggests that falling energy prices are leaving Americans in better position to spend on everything else.

Wow. That sounds really great, but let’s look a little closer.

Power Line reports:

But no: the “personal consumption” that drove the supposed economic boom in the third quarter was the increased cost of Obamacare, spending that had been moved from the first quarter to make the third quarter look better:

This is the chart:

 

Final Q3 GDP contribution_2_0

In short, two-thirds of the “boost” to final Q3 personal consumption came from, drumroll, the same Obamacare which initially was supposed to boost Q1 GDP until the “polar vortex” crashed the number so badly, the BEA decided to pull it completely and leave this “growth dry powder” for another quarter. That quarter was Q3.

The article at Power Line concludes:

We can only hope that exploding Obamacare costs don’t drive “personal consumption” any higher in future quarters, and also that this sort of statistical manipulation comes to an end when the endlessly corrupt Obama administration finally departs the scene.

Between now and 2016, we need to make sure the voters understand what is going on.

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 Revised Numbers Tell A Different Story

On Friday the Washington Times posted a story about the Obama economy. As I am sure you remember, when the government announced that the economy had grown 3.2 percent in the last months of 2013, economists announced that America was well on its way to prosperity. Well, not so fast.

The article reports:

However, according to a revised estimate released Thursday by the U.S. Commerce Department’s Bureau of Economic Analysis, that 3.2 percent figure was a wild exaggeration.

The U.S. gross domestic product (GDP), the broadest measure of our country’s entire economic output, grew no more than 2.6 percent in the fourth quarter — a pitifully low growth rate for the largest economy in the world.

“Averaged across the four quarters of last year, real GDP added 1.9 percent in 2013 from 2012,” said Forbes’ website reported.

So what happened? Part of the reason for the lack of growth is that personal income has not grown for several months, putting a damper on consumer demand. Also, 2013 brought higher taxes to all income levels–some hidden taxes included in ObamaCare like the medical devices tax. High earners also faced increased capital gains taxes, which slowed risk taking and job growth. In February, contracts to buy new homes fell for the eighth month in a row.

Unless something happens to cause President Obama to change his policies, we will have three more years of a non-recovery recovery., If you are not happy with the direction the country is moving in, you need to voice your opinion at the ballot box in November. A Republican Senate may be able to reverse enough of this to get the economy moving.

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At Some Point, Even Low-Information Voters Will Laugh At These Reports

Ed Morrissey at Hot Air posted an article today about recent economic growth in America. The Bureau of Economic Analysis claimed a moderate economic annualized growth rate of 3.2% last month. The Bureau has now adjusted its numbers, saying that the economy only grew at the stagnation level of 2.4%:

The article reports the following from the Bureau of Economic Analysis:

The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was 3.2 percent. With this second estimate for the fourth quarter, an increase in personal consumption expenditures (PCE) was smaller than previously estimated.

Reuters reports the following:

Consumer spending was cut to a 2.6 percent rate, still the fastest pace since the first quarter of 2012. It had previously been reported to have grown at a 3.3 percent pace. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, contributed 1.73 percentage points to GDP growth, down from the previously reported 2.26 percentage points.

As a result, final domestic demand was lowered two-tenths of a percentage point to a 1.2 percent rate. The loss of momentum appears to have spilled over into in the first quarter of 2014, with an unusually cold winter weighing on retail sales, home building and sales, hiring and industrial production.

The article at Hot Air concludes:

Weather will be a factor in 2014 Q1, but it wasn’t in 2013 Q4. The economy was stagnating well before the polar vortices arrived, and has been ever since the June 2009 technical recovery. This is just more of the same.

President Obama’s economic policies are not working. Can we please try something else?

 

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An Interesting Perspective On Immigration Reform

Yesterday John Hinderaker at Power Line posted an article about the economic impact the current proposals regarding immigration reform will have on the incomes of Americans.

This week in his weekly address, President Obama stated the following:

The Senate’s plan would also provide a big boost to our recovery. And on Wednesday, we released a report detailing exactly how big a boost that would be.

The report is based on the findings of independent, nonpartisan economists and experts who concluded that, if the Senate’s plan becomes law, our economy will be 5% larger in two decades compared to the status quo. That’s $1.4 trillion added to our economy just by fixing our immigration system.

Here in America, we’ve always been a nation of immigrants. That’s what’s kept our workforce dynamic, our businesses on the cutting edge, and our economy the strongest in the world. But under the current system, too many smart, hardworking immigrants are prevented from contributing to that success.

John Hinderaker points out:

And who might those supposedly “independent, nonpartisan economists and experts” be? When you check out the actual report, here is who they are:

President’s National Economic Council, Domestic Policy Council, Office of Management and Budget, and the Council of Economic Advisers.

In other words, extensions of the office of the president. His appointees–high level flacks.

That’s the first problem with that statement. The second problem is explained by a Power Line reader with amazing math skills who sent a note to Power Line which definitely disputed that claim.

The reader reports:

The claim is that aggregate GDP will be 5% higher in 20 years than otherwise, equal to $1.4 trillion in constant dollars. By simple algebra that means they are assuming a status quo future GDP of $28 trillion and therefore an immigration-enhanced GDP of $29.4 trillion. But wait! What about GDP per capita, the only meaningful measure of economic growth for the populace? Well…population will increase from today’s 315 million to about 378 million under the current immigration and population levels, and to about 410 million with the new immigration regime, conservatively estimated. [Ed.: That is a VERY conservative estimate.] Simple arithmetic demonstrates that future GDP per capita without the new immigration levels is $74,000, whereas with increased immigration it is $71,700.

…Their plan is simply to import scores of millions of unskilled 3rd world immigrants, covered by a fig leaf of a few hundred thousand high skilled STEM workers, 90% of whom we can easily do without, in order to create “economic growth” — in the aggregate — by a massive population expansion from the outside–but not growth that will benefit existing native born Americans at all. And that is not counting the inevitable economic drawbacks of this grotesque giantism — overcrowding, land use issues, infrastructure deterioration, and environmental degradation, to name a few.

The ability of some of our elected leaders to lie in order to further whatever agenda they have is amazing to me. I would love to see our immigration policies reformed–they are awful. However, the current changes proposed by the Senate are not the answer. The incremental proposals coming from the House of Representatives might better solve our current problems.

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About The Rather Modest Recovery We Are Experiencing

Recently I have heard some Democrats blame spending cuts for the fact that we are in the weakest economic recovery since recoveries began. Investor’s Business Daily has a different perspective. They posted an article today with the following chart:

The article explains:

Instead, the researchers found, “the excess fiscal drag on the horizon comes almost entirely from raising taxes.”

Taxes as a share of GDP are on track to rise well above historic averages and well above rates at comparable periods in previous recoveries.

And what explains this “super-cyclical” rise in taxes?

Well, let’s see. Obama forced through a $600 billion tax hike on upper-income families at the start of this year in the name of “fairness.”

Before that, he and his fellow Democrats imposed $1 trillion of new taxes for ObamaCare, taxes that are just now hitting the economy.

As a result, federal tax revenues as a share of GDP will hit 19.3% of GDP by 2015, a level reached just six times since World War II and well above the 17.9% average over the previous 40 years.

We’d only add that Obama’s other economic policies — an out-of-control regulatory state, the looming disaster known as ObamaCare, various attempts at industrial policy among them — have also weakened what should have been a robust recovery.

Increased taxes have taken spending money out of the pockets of all Americans. Even those people fortunate enough to get raises or bonuses this year found themselves with smaller paychecks because of the increases in taxes. The combination of less spending money for the average American and the confusion many companies are dealing with regarding ObamaCare has stalled our economy. Because many of the regulations in ObamaCare only apply to companies with fifty or more employees, we are going to see many companies stop hiring at forty-nine employees until they are certain of the impact of all these regulations. We are essentially in an economic holding pattern as we wait for the current paradigm of higher taxes and more regulation to settle in. Unfortunately, if that paradigm does permanently settle in, low growth and economic stagnation will be the new normal.

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Where Is The Economy?

The economy hasn’t been in the news lately–there seem to have been a few other things going on–but the economy is something we do need to be keeping an eye on.

CNBC posted an article today describing where the country is economically.

The article reports:

GDP growth is in the midst of its longest sub-3 percent annual growth rate since 1929, the beginning of the Great Depression, according to Bespoke Investment Group. The economy hasn’t topped 3 percent since 2005—before Federal Reserve Chairman Ben Bernanke took over—and is unlikely to do so this year.

The article points out that in two months the revised economic numbers will show that the United States economy has grown to more than the currently stated $15 trillion. This has nothing to do with economic growth–it has to do with a change in the way that the size of the economy is calculated.

The article points out:

Under the new math, the government will add research and development spending, as well as the capital value of all books, movies, records, television programs and plays produced since 1929.

In jacking up the economy’s size, the revisions also will skew the ratio of debt to GDP, considered important in determining government spending.

Of course, the recent attempt at debunking a critical study of the ratio by Carmen Reinhart and Kenneth Rogoff also has dimmed the prospects for government debt-cutting. The two economists asserted that a 90 percent debt-to-GDP ratio restrained growth, but the data set they used has been challenged as faulty.

The new GDP calculations, combined with the souring on the Reinhart-Rogoff conclusions, likely will add to the thirst to keep Washington’s debt machine purring.

Meanwhile, the unemployment rate remains high.

The article reports:

Though employment has risen by 1.3 million over the past year, unemployment that counts the discouraged and underemployed, as well as the jobless (often called the “real” unemployment rate) has remained stubbornly high, at 13.8 percent of the workforce, according to the most recent count.

In fact, a state-by-state look at the numbers, released a few days ago and current through the first quarter, shows that just six states have real rates below 10 percent.

There are a lot of reasons for the high unemployment numbers. One of them is the fact that businessmen are reluctant to hire new employees until they understand the impact of Obamacare will have on their business. Uncertainty is creating an environment where hiring is at least temporarily delayed. The other thing to keep in mind is that as the government grows, it takes money away from the private sector. When the private sector isn’t growing, the economy isn’t growing.

There hasn’t been a lot of reporting lately on the economy, but we still need to be aware of what is going on around us economically.

The Senate Has Finally Produced A Budget

The Senate has finally produced a budget. John Hinderaker at Power Line posted an article today explaining what was in that budget.

The article states:

The process has proved revealing: the Democrats’ budget never balances, increases spending by 62% over ten years, and adds $7 trillion to the national debt despite raising taxes by $1.5 trillion. So Senate Democrats must agree with President Obama that the nation does not face a debt crisis.

The article quotes a statement President Obama made yesterday on ABC:

[W]e don’t have an immediate crisis in terms of debt. In fact, for the next ten years, it’s gonna be in a sustainable place….

There’s not–-in any way–-an immediate crisis with respect to our finances. …

Heritage.org posted an article yesterday explaining some of the details.

The article at Heritage.org states:

…Murray’s budget includes a massive tax increase. She raises taxes by almost $1 trillion ($975 billion to be exact) over the next 10 years by “closing loopholes.” Closing loopholes is Washington-speak for eliminating deductions, exemptions, and credits.

Which loopholes to close Murray leaves up to the Senate Finance Committee. But she is pursuing this tax increase unnecessarily. The Congressional Budget Office says that revenues will be 19 percent of GDP at the end of the current 10-year budget window. That is uncomfortably above the 18.5 percent of GDP that tax revenues have averaged in times of economic growth since the end of World War II. Murray’s budget would push revenues close to 20 percent of GDP by 2023, well above average—yet still not enough to catch up with her budget’s excessive spending.

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We Are Definitely Not Headed In The Right Direction

Yesterday CNSNews reported that according to the the Budget and Economic Outlook published January 31, 2012,  by the the Congressional Budget Office (CBO), the amount of taxes collected by the government will increase 30 percent between 2012 and 2014. That increase is not due to a growing economy, which automatically increases the amount of revenue flowing into the treasury, but due to an increased tax burden placed on every American.

The article reports:

The anticipated percentage increase in federal tax revenue is not only large when calculated in dollar terms but also when calculated as a share of GDP. The jump from 15.4 percent of GDP in fiscal 2011 to 20.0 percent of GDP in fiscal 2014 equals an increase of 29.8 percent. The jump from 16.3 percent in fiscal 2012 to 20.0 percent in fiscal 2014 equals an increase over two years of 22.7 percent.

Federal tax revenues have averaged “about 18 percent of GDP for the past 40 years,” according to CBO. So, in the next two years federal tax revenues will rise from a level that is below the modern historical average to a level that is above it.

A revenue increase that was due to an expanding economy would help us deal with our deficit problem (although the spending–not the revenue–is at the root of the problem). As long as the government spending is out of control, the economy will not grow. Right now our economy is the equivalent of a hamster on an exercise wheel–until the hamster gets off the wheel, he is not going anywhere.

The American economy cannot survive this kind of a tax increase. It is time for everyone to take a good look at their Senators and Representatives and examine their voting record over the past ten years. If they have consistently voted to increase government spending, they need to be voted out of office in November–this cannot wait any longer. Americans will get the government they deserve (the government they vote into office). If you would like to see America survive, you need to be part of the solution–not part of the problem.

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Some Notes On The Current Budget Debate

The super committee is desperately trying to find a way to cut the budget deficit. I am not alone in believing that no solution will be reached.

On Friday Heritage.org posted an article about what exactly is being discussed. Some basic facts pointed out in the article:

Words can’t even begin to describe the scope of borrowed federal spending, but it is no doubt a staggering figure that has risen dramatically in the last decade and is more than $4 trillion higher than when President Barack Obama took office less than three years ago.

Federal spending, at about 24 percent today, is significantly over the average of 20 percent of GDP, but in a decade it will top 26 percent.  Within a generation it will reach nearly 35 percent of GDP.

The facts are simple: Entitlements are going to generate European style debt levels unless they are reformed. Paying for it without bringing down their spending would require constant, crushing tax hikes on all taxpayers — not just the top 1 percent.

And there are some in the House and Senate who understand the problem and are advocating significant action. Seventy-two Members of the House and 33 Senators are standing against continued overspending, over-borrowing, and overtaxing. In a letter yesterday to the super committee, the House Members wrote, “It is evident that America has a fiscal crisis because Washington spends too much, not because it taxes too little,” and warned, “Increasing taxes on Americans would destroy jobs, erase all hope of an economic recovery, and simply serve to feed out-of-control spending in Washington.”

If those in Washington do not have the courage to cut the spending, we need to elect people who do.

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