25 More Terms
– By: Larry Walker, Jr. –
Forget about four more years. Based on the USA’s current trajectory, it would take another 25 terms, or 98 years, for Barack Obama’s bizarre economic policies to restore the U.S. Labor Force to where it should be in the next four years, when compared to the growth rates achieved under the policies of George W. Bush. And then once that’s been achieved, based on the trajectory of the USA’s 11,832,000 Jobs Deficit, it will take something on the order of infinity to reach full-employment. So what’s the point of another Obama term, to fundamentally destroy the Global economy?
Earlier this month micro-journalists were roused over the fact that 368,000 additional workers dropped out of the labor force during the month of August. For the first time many were awakened to the fact that this was the only reason the official unemployment rate declined from 8.3% to 8.1%, but that’s about as far as they ventured. A handful went on to extrapolate that the real unemployment rate is actually 11.2% when based on the same labor force participation rate in place when Obama entered office, but hindsight is 20/20. A more substantive analysis would involve utilizing this information in order to project where we are headed.
Last Friday, Egan-Jones Ratings Co. downgraded its U.S. sovereign rating to AA- from AA on concerns that the Fed’s new round of quantitative easing, or QE3, will hurt the U.S. economy. The ratings agency said the Fed’s plan of buying $40 billion in mortgage-backed securities a month and keeping interest rates near zero does little to raise GDP, reduces the value of the dollar, and raises the price of commodities. In a note Egan-Jones said, “From 2006 to present, the US’s debt to GDP rose from 66% to 104% and will probably rise to 110% a year from today under current circumstances; the annual budget deficit is 8%. In comparison, Spain has a debt to GDP of 68.5% and an annual budget deficit of 8.5%.”
Topping this, according to the Economic Cycle Research Institute, the federal government’s release of overstated preliminary data is obscuring real-time evidence of recession. For example, the Obama Administration is purposefully overstating preliminary labor statistics in order to give a boost to his re-election bid, but this is a dangerous practice, because by the time economists are able to determine that we are in recession, it will be too late to issue a warning. In contrast, under the Bush Administration preliminary statistics were typically understated, and thus we had warning several month’s prior to the Great Recession.
Based on the August Employment Situation Report, the economy added a mere 96,000 jobs, while June and July’s numbers were revised downward by 41,000. Thus, the U.S. realized a net gain of just 55,000 Nonfarm jobs in the month of August. But micro-journalists ran with the 96,000 figure, basically ignoring a history of 42 consecutive months of subsequent downward revisions, as though this figure won’t also be revised downward next month. Nevertheless, since the economy needs to create 127,000 jobs a month just to keep up with population growth, the result led to an increase in the jobs deficit, which currently stands at 11,832,000.
As outlined in the last post, U.S. Jobs Deficit Increases by 72,000 in August, to be meaningful, the number of jobs needed to return to more or less full employment by December 2014, or within the next 28 months, is now 549,571 jobs a month. And even if we extend the target date to 5 years from today, which will be more than 8 years from the time the recession ended, the number of jobs needed to return to more or less full employment by August 2017, or within the next 60 months, is now 324,200 jobs a month. So even though micro-journalists ignored the fact that only 55,000 jobs were added in August, and instead sought to convince the public that 96,000 were added, it really doesn’t matter. What should be made clear is the point that we will never reach full-employment at the current trajectory.
Labor Force Stagnation
According the Bureau of Labor Statistics, the labor force grew by 10,436,000 during George W. Bush’s term, which encompassed two recessions (see chart below). During the first recession, which lasted from March 2001 to November 2001, the labor force grew by 539,000. And even during the first 13 months of the Great Recession (end of the Bush term), from December 2007 through January 2009, the labor force continued to expand by 401,000. In contrast, during Barack Obama’s full term to-date, the labor force has grown by a mere 409,000. In other words during Obama’s entire term the labor force has grown at a recession pace.
Even worse, the Great Recession ended in June 2009, yet from July 2009 to August 2012 the labor force actually shrank by 85,000. This means that, under the policies of Barack Obama, the U.S. labor force has performed worse than during the most recent recessions – way worse. Thus, the economy is not growing, it’s shrinking. So what about that?
Labor Force Growth During Bush Term (+)10,436,000
Annual Labor Force Growth Rate During Bush Term 0.907%
Labor Force Growth During Obama Term (+)409,000
Annual Labor Force Growth Rate During Obama Term 0.076%
Labor Force Contraction Since June 2009 (-)85,000
The Labor Force grew at an annual rate of 0.907% during both Bush terms, which is close to the rate of population growth, while annual growth has been almost immeasurable during Obama’s term, at just 0.076%. So what does this mean? It means that under Barack Obama’s trickle-down-government, borrow-and-spend economic policies, and based on the USA’s current trajectory, it will take approximately 25 more terms (98.1 years) for the labor force to grow to where it should be in the next four years. So perhaps instead of crying “four more years,” Obama loyalists should be shouting “98 more years,” because four more just won’t cut it.
Aside from the Constitution, the only other problem with anointing Barack Obama as our first Dictator is that even if all 7,031,000 Americans who have dropped out of the labor force during his term, those who still want jobs now, suddenly decided to return to the labor market, there’s no guarantee they would find work, because of the Jobs Deficit which currently stands at 11,832,000. In fact, based on the USA’s current trajectory, it will take something on the order of infinity to reach full-employment. Thus, hardcore Obama loyalists might as well be shouting, “Obama forever”.
But fortunately, most of us don’t have forever to wait, which is precisely why we need to end this ridiculous charade right now. There’s only one Plan on the ballot this November, and only one man capable of turning things around. And by turning things around, no, I don’t mean going back to the same policies which caused the last recession. That would be lame. I mean returning our government to some semblance of honesty and integrity. A POTUS who ignores his own jobs council, and then inundates the nation with lies and distortions, while concealing the truth about the economy, isn’t a problem solver; he is the problem of our day, the present, right now, today.
The first step in repairing the Republic is to vote this deceiver out of office. The second step involves hiring a turnaround guy, someone who doesn’t know how to fail, and then trusting in God to help him get us back on the right track.