I won’t waste your time with political rhetoric, let’s just cut right to the math:
Just 96,000 jobs were added in August in a bleak monthly jobs report today. The national unemployment rate dropped to 8.1% from 8.2%, but only because so many people gave up looking for work. If the participation rate had not dropped so precipitously, unemployment would have risen to 8.4%. Still, this has now been a record long 43 month stretch of the official unemployment rate being north of 8%.
In fact, according to James Pethokoukis of the American Enterprise Institute, the unemployment rate would actually be 11.4% if we had retained the same base number of people looking for work since Obama took office in January 2009.
In 2009, the Obama administration had projected that unemployment would be at 5.3% by this time if we passed their $830 billion stimulus program. We did, and the effects didn’t even make a dent:
Labor Force Participation
The labor participation rate, which measures the number of working age people (18-64) actively looking for work, declined from 63.7% to 63.5%, the lowest since September of 1981 – declining by 368,000 people in August. The labor force participation rate for men is also at its lowest level recorded since the U.S. government began tracking it in 1948.
People on Welfare
Food stamp use has now reached a record 46.7 million people. Food stamp spending, which has more than doubled under Obama’s term to a record $75.7 billion, is now the Department of Agriculture’s biggest annual expense.
The number of workers taking federal disability insurance payments hit yet another record in July, increasing to 8,753,935 during the month from the previous record of 8,733,461 set in June, according to the Social Security Administration.
The 8,753,935 workers who took federal disability insurance payments in July exceeded the population of 39 of the 50 states. Only 11 states — California, Texas, New York, Florida, Illinois, Pennsylvania, Ohio, Michigan, Georgia, North Carolina and New Jersey — had more people in them than the number of workers on the federal disability insurance rolls in July.
When Obama took office in January 2009, there were 142,187,000 people actually working and 7,442,377 workers collecting disability — a ratio of about 19 to 1. In June, there were 142,415,000 people actually working and 8,733,461 workers claiming disability — a ratio of about 16 to 1.
Weak consumer spending held GDP growth to an annual rate of just 1.5% in the second quarter of 2012, even less than the 2% rate in the first quarter and 4.1% from the fourth quarter of 2011. And few expect the economy to accelerate in the second half of the year.
This further discredits the value of the Obama administration’s 2009 stimulus. Business investment and inventory buildup were both revised downward for 2010, which suggests that the stimulus did very little to boost business confidence.
The Keynesian economic theory is that government spending will boost consumer demand in a way that spurs more business spending to meet it. But instead the $830 billion stimulus seems to have created a short-term GDP blip based on government expenditures, but no growth takeoff. In return for blowing out the federal balance sheet with red ink, Americans got a hell of a lot more debt but not more growth.
Due to lack of job growth, there are also less Americans paying income taxes. In fact, only 50.5% of Americans are paying any income taxes at all today, a new record low:
Add it all up and over 100 million Americans are now receiving some form of federal welfare through Medicaid, food stamps, or disability claims, according to the U.S. Census:
So what does this all mean?
The Obama administration’s policies have not produced any confidence in either consumer spending or for employers to expand, invest and hire more people. The persistent uncertainty stems from lack of ironing out tax rates for more than 1 or 2 years at a time, added rules and regulations from finance to health care which businesses then have to spend time and money to figure out and comply with, and out of control spending in Washington that’s drowning the country is red ink, rising inflation and hampering us with a credit rating downgrade.
As a result of the lack of job opportunity, more and more Americans are being forced to switch to welfare just to make ends meet. We are now reaching a tipping point where more Americans will be consuming tax dollars from the system (nearly half the entire population at 48.5%) than paying into it, with entitlements now eating up 65.1% of all federal tax dollars today.
Four more years of this? No thanks, I’ll take what’s behind curtain #2.