How do we know we are still in sad economic times? Consider the latest:
1) The latest two weeks have seen a total of over 750,000 Americans filing for first time unemployment benefits. You cannot honestly claim that we are in any kind of economic turnaround when well over a million Americans each month have found it necessary to file for unemployment benefits.
2) According to the Minneapolis Federal Reserve Board, using data from the Bureau Of Economic Analysis:
- Our recent economic growth has been slower in this recovery than in any of the previous post-World War II recoveries.
- In the three years since the Obama recovery started, the nation’s real GDP has risen only 6.7%, a growth rate that is substantially below the GDP growth rate in the 12 quarters after the 1980 recession ended, despite the fact that the 1980 recovery also endured an intervening 1981-82 recession.
- The rate of job growth of the Obama recovery is below every previous recovery as well if you start counting at the point where jobs bottomed out.
- The recovery during the Obama administration has reclaimed only about half the jobs lost during the recession. In all other prior recoveries since World War II, the number of jobs exceed the previous peak by this point in the recovery.
- As an illustration, if job growth under Obama kept pace with the previous worst recovery since World War II, there would be nearly 6 million more Americans with jobs today.
3) According to the latest version of an ongoing Rasmussen survey, as reported in the October 30, 2012 issue of Moneynews, a majority of Americans feel today’s children will have it harder than their parents had it. According to the findings, 53% of Americans think today’s children will not be economically better off than their parents were. Only 24% said today’s children will see better days than their parents did.
While these discouraging findings have recently improved slightly, it is still very sad that our economy has soured so much, without being fixed by the political class, that the majority of Americans are this pessimistic about their kids’ futures.
4) A Bloomberg article from October 26, 2012 reviewed a letter more than 80 heads of U.S. companies have signed as part of a campaign to reduce Federal deficits through spending cuts and tax increases because President Barack Obama hasn’t reached an accord with lawmakers that would avoid a fiscal cliff.
One of the signers of the letter, billionaire investor Wilbur Ross state: “It was really an announcement out of desperation. They (the 80 business leaders)were trying collectively as business leaders to fill the vacuum left by the political leadership of the President.”
Ross went on to say: “I think it’s tragic that President Obama appointed Simpson and Bowles, they came with relatively sensible suggestions, and he totally walked away and provided no leadership for them. If he had exerted leadership, we wouldn’t have the fiscal cliff that we have now. Policy makers should acknowledge that our growing debt is a serious threat to the economic well-being and security of the United States.”
The article goes to discuss how the uncertainty caused by the lack of leadership from the President and larger political class is creating a great deal of uncertainty in the marketplace. The uncertainty clouds future business opportunities and turns business leaders and owners into risk adverse individuals. Risk adverse individuals tend to be cautious and conservative in their business decisions, directly and negatively impacting the economy and unemployment rates of the country.
5) According to an Associated Press article from October 31, 2012, the Federal government will bump up against its debt limit of $16.39 TRILLION by the end of 2012, sooner than expected. This indicates that the Federal government is spending more money that it does not have a quicker pace than previously thought since it was generally believed that the debt limit would be hit in 2013.
Thus, as the nation plummets towards insolvency, the Washington politicians have been busy protecting their political careers than the protecting our fiscal future. This is just another example that proves term limits are neede more than ever. If term limits were in place, Washington politicians might be in Washington taking care of our future rather than taking three months off from governing, replacing it with politicking. Disgusting set of bad priorities.
6) According to two experts, as documented in an October 26, 2012 article in Moneynews, the country is likely to drop into recession mode by early 2013. Laurence Fink, CEO of asset management giant BlackRock and the Congressional Budget Office both agree that a combination of rising taxes and cuts to government spending coupled with continued uncertainty in Europe will likely cause a U.S. Combine these factors with a fast approaching debt limit fiasco and all of the pieces for a recession are coming together.
Much like the band played on as the Titantic sank, our politicians politicked on as our economy sank.
7) An article from Bloomberg News on October 26, 2012 had some quotes from a Federal Reserve Board president, the one member of the Board that dissented when the Fed decided to implement Quantitative Easing III. We have previously reviewed how much of a failure the first two phases of Quantitative Easing were, printing money and pumping that newly minted fake money into the economy to the tune of $2.3 TRILLION to no avail.
Federal Reserve Bank of Richmond President Jeffrey Lacker said he was against the decision by the Fed this week to continue on with additional bond buying because the effort is ineffective and may increase the chances of high inflation: “Further monetary stimulus now is unlikely to result in a discernible improvement in growth, but if it does, it’s also likely to cause an unwanted increase in inflation. Improvement in labor market conditions appears to have been held back by real impediments that are beyond the capacity of monetary policy to offset.”
In other words, the political class in Washington has not done their job to develop and implement a coherent and effective economy recovery plan and the Federal Reserve Board is out of ideas that will make a difference in the economy short of increasing the rate of inflation. And the politicians politicked on.
8) And finally, consider two quotes from an October 25, 2012 Moneynews article. Peter Schiff, CEO of Euro Pacific Capital had some pessimistic views of the near term future of the U.S. economy: “When America's creditors wake up, particularly those foreign governments now shouldering the lion's share of the burden [financing U.S. debt], concerns over our twin deficits [our trade deficit and spending deficit] will return with a vengeance. Black Monday [the massive stock market collapse in 1987] is more likely to occur in the currency and/or bond markets, with safe-haven flows moving into gold, not Treasurys.”
Marc Faber, publisher of the Gloom Boom & Doom Report, was also quoted. He also expects exploding government debt to cause a crisis, and not just in the United States: “I think within five to 10 years you have a colossal mess everywhere in the Western world.”
That is enough bad news for today from the world of economics and fiscal sanity. And the politicians politicked on.
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