Welcome back Carter.
With every passing month, our economy and job market slides further and further back towards the dismal numbers of the Carter administration.
While it’s true that the official unemployment rate is falling, that doesn’t include the millions of nonworking adults who aren’t even looking for a job anymore.
The official unemployment rate is 8.1% — the so-called U-3 — but everybody understands by now that that number excludes millions who have either dropped out of the labor force altogether, or can’t find full-time work. A broader measure which accounts for these points, the U-6, is at 14.5%.
The labor force participation rate, which measures the share of working-age people currently working, has sunk to 64.3% — the lowest since 1981, according to the Bureau of Labor Statistics.
That means 86 million people are invisible unemployed, according to the Labor Department.
This caused S&P to end the week as its worst yet in 2012.
This is precisely what catapulted Ronald Reagan into the White House in 1980. The country was still suffering the effects of a crippling recession, with any hope of an economic recovery crushed by an over-controlling federal government and uncertainty over our future. Jimmy Carter blamed the American people for being soft and lazy instead of looking at his own misguided economic faith in big government solutions and redistribution of wealth policies. But Reagan firmly believed in free market economic solutions and understood what most Americans want: opportunity, freedom, and a belief that tomorrow will be better than today.
The Obama administration will now have to abandon any hopes of Reaganesque economic recovery for the same reasons Carter did – big government spending policies only lead to economic stagnation.
On top of that, the federal debt has now eclipsed our entire GDP, leading to a first ever credit rating downgrade, rising inflation, and social safety nets going completely broke within the next 20 years.
There’s no way the Obama 2012 campaign staff in Chicago can spin this. It’s bad any way you look at it.
So what will they use to distract voters from the bad news? Contraceptives, dogs, the Buffet Rule, whatever it takes.