Obama’s Jobs Recovery — In Temporary Help Services

One Term Wonder

Symptoms of Government-Down, Borrow-and-Spend Economics

– By: Larry Walker, Jr. –

According to Barack Obama, “We tried this trickle-down fairy dust before. And guess what — it didn’t work then, it won’t work now. It’s not a plan to create jobs.” But only the most gullible members of the Democratic Party would find such words edifying. What really matters to the majority of Americans, a point all but ignored by the Obama-Biden Entourage, is the fact that since the beginning of the Great Recession, a total of 4,778,000 Nonfarm Jobs have been entirely wiped out, and what we have been waiting to hear is a coherent plan whereby they might be recovered, not the comedic rhetoric of a left-wing jester.

In reality what Mr. Obama’s words describe are his own government-down, borrow-and-spend, loot-and-plunder policies, which have not only failed to add a single net Nonfarm Job (see chart below), but have instead added more than $5 trillion to the National Debt in just four years, resulting in the first credit rating downgrade in U.S. history. Instead of inundating the nation with more empty rhetoric, what every American deserves to know is the truth regarding where we stand, and how furthering Mr. Obama’s government-down, borrow-and-spend policies would help to restore both America’s credit rating and American jobs.

An analysis of real facts and figures, supplied by the U.S. Bureau of Labor Statistics, finds that during the Obama-Biden Administration a total of 316,000 Nonfarm Jobs have been lost, and regarding Private Sector Jobs, out of a mere 332,000 which have been recovered during the Obama-Biden Dynasty, every single one can be traced directly to the Temporary Help Services Industry. So when it comes to jobs, the pomposity we’ve all heard repeated over and over again by the Obama-Biden Crew and its cheerleading squad, including those prone to media-bias, is just that. A more substantive analysis begins.

Total Nonfarm Jobs

Examining the growth (decline) in Total Nonfarm Jobs [Private Sector + Government] since January 2001, it is clear that job creation is not something the Obama-Biden Administration should be bragging about. Here’s why (see chart below).

Total Nonfarm Jobs

  • From the end of January 2001 through the end of January 2008, a total of 5,557,000 Nonfarm Jobs were gained, during the Bush Administration.

  • During the last year of the Bush Administration, as a result of the Great Recession, from the end of January 2008 to the end of January 2009, a total of 4,462,000 Nonfarm Jobs were lost.

  • Thus, a total of 1,095,000 Nonfarm Jobs were gained during the Bush Administration.

  • During the Obama Administration, from the end of January 2009 through July 2012, a total of 316,000 Nonfarm Jobs have been lost.

  • Overall, we are still 4,778,000 Nonfarm Jobs in arrears, from a record high established by the Bush Administration at the end of January 2008.

Thus, in terms of Total Nonfarm Jobs, 1,095,000 were added during the Bush Administration, a rather pathetic record since we need to create 1,524,000 jobs a year (127,000 per month) just to keep up with population growth. In comparison, after nearly four years, and $5.3 trillion in new federal debt, not a single Nonfarm job has been added by the Obama-Biden Administration, but rather 316,000 have been lost. In spite of the policies of Obama-Biden, Nonfarm Jobs are still 4,778,000 short of the January 2008 peak, so gullible Obama-Biden loyalists need to find something else to showboat.

Total Private Sector Jobs

After cringing at the Total Nonfarm statistics above, gullible Obama-Biden loyalists will say that what they were really bragging about was their record on Private Sector Jobs (exclusive of Government). Okay, so let’s examine the growth (decline) of Private Sector Jobs since January of 2001.

Total Private Sector

  • From the end of January 2001 through the end of January 2008, a total of 4,016,000 Private Sector Jobs were gained, during the Bush Administration.

  • From the end of January 2008 to the end of January 2009, due to the Great Recession, a total of 4,662,000 Private Sector Jobs were lost, during the Bush Administration.

  • Thus, a total of 646,000 Private Sector Jobs were lost, during the Bush Administration.

  • During the Obama-Biden Administration, from the end of January 2009 through July 2012, a total of 332,000 Private Sector Jobs have been recovered.

  • Overall, Private Sector Jobs are still in arrears by 4,330,000 from a record high established by the Bush Administration at the end of January 2008.

So in terms of Private Sector Jobs, we have to hand it to Obama-Biden. While the Bush Administration lost 646,000 Private Sector Jobs over eight years, the Obama-Biden Administration has recovered 332,000 over the last four years. However, since we really need to create 1,524,000 jobs a year (127,000 per month) just to keep up with population growth, and since Private Sector Jobs remain 4,330,000 short of the January 2008 peak, the Obama-Biden Administration’s record isn’t really worth grandstanding. In fact, when government-down supporting, Obama-Biden loyalists discover the subsector in which these jobs were added, they should run as far away from their Party’s chosen platform as they can get.

Which Subsector(s) Gained Jobs?

Which areas of the Private Sector gained jobs during the Obama-Biden Administration? To know the answer, one must comb through all of the various industries detailed by the Bureau of Labor Statistics, in Table B-1, sector by sector. Were jobs gained in Mining and Logging, Construction, or Manufacturing? No. What about in the Wholesale Trade, Retail Trade, or Transportation and Warehousing? Nope. How about Information, Financial Activities, Education and Health Services, Leisure and Hospitality, or Other Services? Nope.

To be precise, the only sector of the economy where you’ll find any net jobs growth during the Obama-Biden Administration is under the Professional and Business Services category, and there only in the subsector named Temporary Help Services (under Professional and Business Services >> Administrative and Waste Services >> Administrative and Support Services >> Employment Services >> Temporary Help Services).

Temporary Help Services (NAICS 56132) – The temporary help services industry comprises establishments primarily engaged in supplying workers to clients’ businesses for limited periods of time to supplement the working force of the client. The individuals provided are employees of the temporary help service establishment. However, these establishments do not provide direct supervision of their employees at the clients’ work sites. So let’s examine the growth (decline) of Temporary Help Service Jobs since January of 2001.

Temporary Help Services Jobs

  • From the end of January 2001 to the end of January 2009, a total of 600,000 Temporary Help Service jobs were lost, during the Bush Administration. [Note: This accounts for nearly all of the 646,000 Private Sector Jobs lost over the period.]

  • During the Obama-Biden Administration, from the end of January 2009 through July 2012, a total of 576,000 Temporary Help Service jobs have been recovered. [Note: This accounts for all of the 332,000 Private Sector Jobs recovered during the period, minus losses in other sectors.]

So 600,000 Temporary Help Service jobs were lost during the Bush Administration, and the Obama-Biden Administration was able to recover 576,000 of them. In effect, since a total of 646,000 Private Sector Jobs were lost during the Bush Administration, among them, 600,000 or almost all were Temporary Help Service jobs. Since then, the Obama-Biden Administration has recovered a total of 332,000 Private Sector Jobs, and every single one of them, 576,000 minus losses in other sectors, were in Temporary Help Services.


From the end of January 2001 to the end of January 2009, a total of 1,095,000 Nonfarm Jobs were gained during the Bush Administration. In contrast, during the Obama-Biden Administration, from the end of January 2009 through July 2012, a total of 316,000 Nonfarm Jobs have been lost. Meanwhile, as Barack Obama, Joe Biden and their gullible loyalists boast about this great accomplishment, we are still 4,778,000 Nonfarm Jobs, and 4,330,000 Private Sector Jobs short of the record highs established by the Bush Administration at the end of January 2008. Even worse, since the population continues to grow, from the start of the Great Recession the real jobs deficit in the U.S. has increased to 11,760,000. That’s the record. Those are the facts. That’s the truth.

Like it or not, the only platform on the ballot this November which includes a plan and a promise to create more than 12,000,000 middle-class jobs over the next four years is the Romney-Ryan platform. In contrast, the plan and promise outlined by the Obama-Biden platform, to-date, includes more gloating, more lofty rhetoric, more special interest tax breaks, more deficit-financed subsidies, more uncertainty, more divisiveness, more government dependency, more government regulation, more borrowing and spending, higher health care costs, higher taxes, and with any luck a few more Temporary Help Service jobs.

It’s time to wake-up. It’s time to care. It’s time to do what’s in your best interests and that of your country. It’s time to stop believing in myths, and time to ‘Believe in America’.

“It is impossible to calculate the effect of deficit-financed government spending on demand without specifying how people expect the deficit to be paid off in the future.” ~ Theory of Rational Expectations

Chart Data | At Google Drive

Has Obama’s Loot-and-Plunder Theory Worked?

A 50-Year Retrospective

– By: Larry Walker, Jr. –

“Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.” ~ Winston Churchill ::

Discussing his economic policies at a fundraiser in Oakland, California on July 23rd, Barack Obama, told supporters that, “We tried our plan, and it worked.” Yet, by the end of his first year in office, he had only managed to drag America, kicking and screaming, beyond the point of no return, as our National Debt, on a per capita (per person) basis, surpassed per capita Personal Income for the first time in more than 50 years (see chart above). As of June 30, 2012, after nearly four years of disservice to the nation, under the leadership of Barack Obama, every American now owes $7,958 more in federal government debt, on a per capita basis, than their personal income.

Per Capita National Debt to GDP

Equally alarming, as of June 30, 2012, the U.S. National Debt per capita reached a stunning 101.7% of Gross Domestic Product, an increase of 45.1% since the end of 2008. Looking back over the last half-century, no other President of the United States has done more to destroy our standard of living than Barack Obama. Now if that was his goal, then yes – it worked like a charm. However, this temporary condition will soon meet its demise.

Gross Domestic Product (GDP) is the market value of all officially recognized final goods and services produced within the United States. GDP per capita is considered an indicator of our nation’s standard of living. As of June 30, 2012, U.S. GDP per capita was equal to $49,672. The National Debt is the sum of all previously incurred annual federal deficits. Since deficits are financed by government borrowing, either from the public or from itself, the national debt is equal to all government debt outstanding. As of June 30, 2012, the U.S. National Debt per capita was equal to $50,502.

Thus, it may be stated that, as of June 30, 2012, the standard of living of the United States is negative. In other words, when taken as a whole, on a per capita basis, for the first time in more than a half-century, Americans now owe more in federal government debt than we produce. In effect, there isn’t anything left to address the growing mountain of state and local government, personal and business arrearages.

Granted that Barack Obama and a tiny remnant of gullible far-left loyalists have devised numerous excuses as justification for this atrocity, one way of accurately measuring the validity of such subterfuge is to simply compare the ratio of per capita National Debt to GDP over the last half-century. After all, it was Barack Obama who said of supply-side economics, a theory which has been deployed during most of the 1960’s through 2007, “We tried this trickle-down fairy dust before, and guess what — it didn’t work then, it won’t work now… It’s not a plan to lower the deficit…” Well, let us test this hypothesis on a relative basis, and see just how well his loot-and-plunder theory stacks up.

A quick study of the chart above, Per Capita National Debt to GDP: 1960 through June 2012, tells the whole story.

Testing Obama’s Theory

  1. At the end of 1960 per capita National Debt to GDP was equal to 54.4%.

  2. John F. Kennedy’s Tax Reduction Act of 1964 was signed into Law by his successor Lyndon B. Johnson. Under the ensuing era of lower tax rates, by the end of 1981, per capita National Debt to GDP declined all the way to 31.9%.

  3. Ronald W. Reagan’s Economic Recovery Tax Act went into effect in 1982, and even though government spending was higher than he would have liked, by the end of his term in 1988, per capita National Debt to GDP stood at just 51.0%.

  4. In 1993, Bill Clinton signed the Deficit Reduction Act, which turned out to be nothing more than a tax hike. By the end of 1996, per capita National Debt to GDP had increased to 66.7%.

  5. Then in 1997 the Republican-led Congress passed a tax-relief and deficit-reduction bill that was resisted but ultimately signed by President Clinton. One of the things the 1997 bill did was lower the capital gains tax. It was actually the 1997 tax cut, not the 1993 Clinton tax hike, which produced the boom of the 1990’s. By the end of the year 2000, per capita National Debt to GDP declined to 57.0%.

  6. In 2001, George W. Bush signed the Economic Growth and Tax Relief Reconciliation Act. By the end of 2001, per capita National Debt to GDP decreased to 56.5%, and later increased slightly to 58.5% in 2002.

  7. The following year, George W. Bush signed the Jobs and Growth Tax Relief Reconciliation Act of 2003, which provided the tax rates in effect today. By the end of 2007, per capita National Debt to GDP held at just 64.2%.

  8. In 2009, Barack H. Obama signed the American Recovery and Reinvestment Act (ARRA). The primary objective for ARRA was to save and create jobs almost immediately. Secondary objectives were to provide temporary relief programs for those most impacted by the recession and invest in infrastructure, education, health, and ‘green’ energy. The cost of the economic stimulus package was estimated to be $787 billion at the time of passage, but was later revised to $831 billion. By the end of 2009, per capita National Debt to GDP increased to 85.2%.

  9. The following year, Barack H. Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which extended long-term unemployment benefits and cut the employee’s portion of the Social Security payroll taxes by 2.0%. By the end of 2010, per capita National Debt to GDP increased to 93.5%. By the end of 2011 the ratio had increased to 101.0%, and by June 30, 2012, per capita National Debt to GDP notched up by another seven tenths of a percent to 101.7%.

Ever since Barack Obama implemented his plan, America’s standard of living has gone straight down the tubes. And since he said, “We tried our plan, and it worked…,” we are forced to conclude that his goal was to destroy America’s standard of living. If for some reason this wasn’t his goal, then a more honest assessment would have been, ‘We tried our plan, and it failed.’

When Barack Obama said, “We tried this trickle-down fairy dust before. And guess what — it didn’t work then, it won’t work now… It’s not a plan to lower the deficit..,” whose policies could he possibly have been referring to? A quick study of U.S. per capita National Debt to GDP ratios and per capita Personal Income to National Debt over the last 50 years leads to only one possible conclusion – his own.


Since per capita National Debt to GDP is at the highest ratio since the unsustainable heights attained during the second World War, and higher than at any time in the last half-century, and since Barack Obama has clocked the highest annual budget deficits in American history ($1,412.7 billion in 2009, $1,293.5 billion in 2010, $1,299.6 billion in 2011, and $1,326.9 billion in 2012), we can only conclude that his loot-and-plunder economic theory has achieved the worst results of any set of economic policies deployed by any American president, ever. The facts speak for themselves.

We tried Barack Obama’s loot-and-plunder theory, and it failed. And not only have Obama’s policies failed, but American’s are now worse off than at any time since the 1940’s. No one has managed our economy more recklessly than Barack H. Obama. Are you still a believer? Isn’t it high time we go back to what we know works, make some improvements, and implement some of the reforms proposed over the years, which were errantly pushed aside? Yes it’s time. And since Barack Obama has proved himself unwilling to bend to the will of the American people, it’s time we gave someone else the opportunity. It’s time to switch teams. It’s time to follow real leadership. It’s time to elect a true Conservative.


Table 7.1 Selected Per Capita Product and Income Series in Current and Chained Dollars | Bureau of Economic Analysis

Debt to the Penny | Treasury Direct

Chart Data | Google Drive

Talk about Fairy Dust and Snake Oil!

:: Obama’s Loot-and-Plunder Theory on Social Benefits

– By: Larry Walker, Jr.-

Under Barack Obama’s economic theory, better known as Loot-and-Plunder Economics, income tax rates will necessarily skyrocket, perhaps by as much as 50% across-the-board. If you don’t believe it, just look at the facts and figures. For example, as of FY 2011, annual outlays on Social Security Benefits were 77.7% greater than they were in 2001, while outlays on Medicare were 148.8% greater (shown in current dollars in the chart above). Has Obama solved the problem through entitlement reform? Has he raised Social Security and Medicare taxes by 77.7% and 148.8% respectively? No, so what do you think is coming?

While Obama talks the talk, regarding taxing the rich and fairness, surely even he knows that his plan is not sustainable. It doesn’t balance the budget or grow the economy. The truth is that Obama has no plans for lowering income tax rates on the middle-class, but instead he created Obamacare, which is a nifty way of imposing a whole new set of taxes on those who can least afford health insurance, namely the middle-class. Got it? There will be no middle-class tax relief in a second Obama term, just new health care taxes (i.e. more pain).

So other than leading us all to the edge of a Fiscal Cliff, what else has Obama done for the middle-class? Well, he delivered a two-year Make Work Pay Credit (MWPC), which represented a $400 to $800 reduction in Social Security Taxes in 2009 and 2010, and followed this up with a two-year 2.0% Social Security Tax Cut. In other words, he gave us four years of temporary measures in an effort to stimulate the economy. But what did this really accomplish?

Two Things

#1 – The jobs deficit has grown to 11,760,000 under Obama’s watch, from 5,165,000 when Bush turned over the keys. So we can state without ambiguity that his attempts to stimulate the economy have failed. Sure, things might not be as bad as they could have been, but at the same time, things might not be as good as they could have been either.

The “jobs deficit” increases every month that employers create fewer than 127,000 jobs, the number needed to keep pace with population growth. As you can see in the chart below, the jobs deficit has increased under Obama’s watch, and has remained virtually unchanged since December of 2009. Aside from the jobs deficit, we are still 4,648,000 jobs short of where we were in December of 2007, partially due to the Great Recession, which ended in June of 2009, but namely due to Barack Obama’s loot-and-plunder economic policies, which were designed to prolong the crisis.

#2 – Not only has the unemployment rate remained above 8.0% for his entire term, but Obama’s ingeniously designed Social Security tax cuts have since created a $500 billion per year shortfall in the Social Insurance Fund accounts. Per the chart below, derived from the Bureau of Economic Analysis, Table 3.14 – Government Social Insurance Funds Current Receipts and Expenditures, the gap between Social Insurance receipts and expenditures is now worse than ever, thanks to Obama. I guess we’ll find out whether or not work pays (i.e. the MWPC), a few years from now, when we discover that our Social Security and Medicare guarantees were squandered away during the Obama years. His looting of an additional $716 billion out of Medicare to fund Obamacare should be le coup de grâce (the final blow).

As you can see in the chart above, the point of no return was actually breached in FY 2001, when Outlays for Social Benefits equaled Insurance Contributions. This was primarily due to an escalation in the number of baby-boomers reaching retirement age. But instead of addressing the obvious dilemma, the federal government allowed it to fester into larger and larger annual deficits. Thus, the “Social Benefits Deficit” eventually reached $177 billion by Fiscal Year 2008. Then along came Obama, who instead of addressing the problem has handed out four consecutive years of Social Security Tax cuts (i.e. loot-and-plunder fairy dust).

In just three years Obama turned a $177 billion annual Social Benefits Deficit into a $500 billion per year morass. Free money! Obamabucks! What were the results? As you can see in the chart above, and in the related table, in Fiscal Year 2009 the gap between Government Social Benefit Expenditures and Contributions swelled to $376 billion, from $177 billion in 2008, or by 112.4%. Those were the consequences of giving both taxpayers and non-taxpayers a reduction in their Social Insurance responsibilities via the MWPC. In Fiscal Year 2010, with the extension of MWPC, the Social Benefits Deficit widened to $411 billion, or by another 9.3%.

As if that wasn’t enough, Obama devised an even more cunning way of plundering America’s future retirement security. Replacing MWPC with his 2.0% Payroll Tax Cut, in 2011, caused the Social Benefits Deficit to widen by an additional 21.4%, to $499 billion. That’s a half-a-trillion dollar shortfall. And it’s not over yet. Since the 2.0% Payroll Tax Cut was extended into 2012, we will find out where Social Insurance Benefits stand, at the close of the fiscal year, on September 30th. But so far, when added together, $376 billion in 2009, $411 billion in 2010, and $499 billion in 2011, equals a total Social Benefits Deficit of $1.3 trillion. That’s the amount Obama has added to the national debt by tampering with our future retirement security, and that’s just a fraction of the $5.3 trillion he’s added to the overall debt.


Between FY 2001 and 2008, Contributions for Government Social Insurance grew by 39.3%, while Social Benefit Expenditures grew by 73.6%. But instead of raising a red flag and solving the problem, Barack Obama proceeded to loot-and-plunder contributions, at a time when the demand for benefits was soaring. This was an amateurish move. Between FY 2009 and 2011, Contributions for Government Social Insurance actually shrank by -6.9%, while Social Benefit Expenditures rose by 22.1%, creating a $1.3 trillion shortfall.

So while gullible far-left loyalists continue to fall for Obama’s pretense, that the Romney-Ryan Ticket and Supply-Side economics would gut Social Security and Medicare, if they took five minutes to look up the facts, they would discover that Obama, through his own brand of loot-and-plunder fairy dust, has already beat them to it. The snake oil Obama is pushing is the same stuff that prolonged the Great Depression. Everyone knows that the federal government didn’t end the Depression, World War II did. That is everyone except for Obama, the unlearned and a few far-left loons.

What folks should be engaged in is bipartisan criticism of the manner in which Barack Obama is destroying our future economic security. We should at least be able to agree that there has to be a more viable alternative. Supply-side economics worked in the Roaring 20’s under Coolidge, in the 1960’s under JFK, in the 1980’s under Reagan, and in the 1990’s through 2007 under Clinton and Bush. That’s right! But according to Barack Obama, “It never worked.” Don’t believe that lie. A quick glance at the following chart, Net Federal Outlays and Receipts since 1980, says it all. Trillion dollar annual deficits are a phenomenon which began with Obama.

Lest we forget, Bill Clinton’s famed tax plan was a package which included tax rates ranging from 15% to 39.6% (i.e. rates were higher at all levels across-the-board), in addition to the Republican-led Tax-Relief and Deficit-Reduction Bill of 1997 (i.e. what actually created the boom of the 90’s). But if you think Obama can cherry-pick just one smidgen of Clinton’s tax policies, apply it to only a fraction of taxpayers, those making more than $250,000 (the equivalent of $157,197 in 1993), and achieve the same results, then you’re not using your brain.

Loot-and-Plunder economics ends when everyone sees their taxes rise by 50% or more across-the-board. That’s the only way the federal government can continue to spend at current levels, and move even halfway towards balancing its budget. When you see the symptoms of a failed economic policy (above), and your candidate boasts, “My plan worked,” that’s when you run!



The third chart (above) purposefully excludes interest contributed towards Social Insurance, since such interest is paid from general government funds. The federal government long ago raided the Social Security Trust Fund spending every dime, and now owes the Social Security Trust Fund $2.5 trillion, per Note 24 of the United States Government’s Notes to the Financial Statements, for the year ended September 30, 2011. From time to time, the federal government pays the Trust Fund interest on its debt, but with trillion dollar deficits for the last four years, it is reasonable to conclude that every dime of the interest paid is borrowed, thus it makes no sense to double count. The chart also excludes administrative expenses.


U.S. GAO | Fiscal Year 2011 Financial Report of the United States Government

Bureau of Economic Analysis | Table 3.14 Government Social Insurance Funds Current Receipts and Expenditures

Chart Data | Google Drive

Obama’s Loot-and-Plunder Theory on Steroids

:: Use It or Lose It: We Can’t Wait

– By: Larry Walker, Jr. –

According to unelected hoodlums within the Obama Administration, from 2003 to 2006, Congress set aside $473 million in earmark transportation funds that have never been spent. “These idle earmarks have sat on the shelf as our infrastructure continued to age and construction workers stood on the sideline,” Transportation Secretary Ray LaHood said in a conference call Friday. “I’m taking that unspent money and giving it right back to the states so they can put it to work on the infrastructure projects that they need most — projects that will put people to work.”

So according to Mr. LaHood he’s going to take (i.e. steal) $473 million that was earmarked for infrastructure projects from 2003 through 2006, and send it right back (i.e. 6 to 9 years after the fact) to the states so they can spend it on the infrastructure projects they need the most (i.e. for purposes other than Congress intended). Aside from the fact that this proposal is felonious, the money Mr. LaHood is referring to no longer exists.

The idea of taking funds earmarked towards specific projects, which were deemed unworthy of pursuit during a previous administration, and shifting them towards other purposes today is felonious. What does the term “earmarked funds” mean? It means if Congress passes legislation to repair a certain bridge, the money to repair that bridge is “set aside”. But following Mr. LaHood’s gangster logic, ‘fictitious’ funds earmarked towards certain projects, six to nine years ago, may now be used to fund projects such as California’s Bullet Train to Nowhere. Perhaps a pair of handcuffs is in order.

Common sense dictates that if a bridge still needs fixing, and if the funds still exist and are not barred by the statute of limitations, then it should be fixed. But if the bridge doesn’t need fixing, if it was subsequently replaced by another project, or if the statute of limitations has expired, then the funds, assuming they still exist, should be returned to the Treasury. The notion of “use it or lose it” in this matter is felonious. According to Mr. LaHood, States now have around 45 days, or until October 1st, to identify projects for which they plan to use the money, or else they will lose it. In other words, the funds were not lost after sitting idle for 6, 7, 8 and 9 years, but suddenly there is an arbitrary 45-day deadline. Who passed that law? What is the statute of limitations for spending on earmarked transportation projects – 9, 8, 7, or 6 years? Is there one, or do bureaucrats just get to make up the rules as they go along?

Where’s the Money?

The following analysis from John A. Swinford on his blog, People, Places, News and Other Stuff, answers a key question: Where’s the money?

“Sounds reasonable, right? Hold on to your horses; remember this is a politician speaking. According to Transportation Secretary Ray LaHood, “These idle earmarks have sat on a shelf…” Well, OK, they were authorized but not used. I get that, but what happened to the funding for those earmarks…where is the money…in a lock box or a savings account…or somewhere else? Secretary Hood claims the earmarks were authorized during a period between 2003 and 2006 but not actually spent and therefore, the cash is still available.”

“Before you buy that explanation consider the difference between a budget and cash accounting. If you go to the St. Louis Federal Reserve Bank website you can pull up the actual Federal cash receipts and outlays. In each of the years to which Secretary Hood refers, the cash deficits ran $378 billion, $413 billion, $318 billion and $248 billion respectively (in current dollars). OMG, Washington spent more cash than it took in…What a surprise… But if that is so how could there possibly be some extra loose cash sitting around. Answer… there is none. The only way to fund “Use It or Lose It” is what? You guessed it…more borrowing.”

In fact, according to the Bureau of Economic Analysis, in real terms, the federal government operated at deficits of -1,955.2 billion from 2003 to 2008, and another -4,678.1 billion from 2009 to 2012 (shown in Constant FY 2005 Dollars). So not only was there nothing leftover, the money was never there to begin with.

The annual deficits shown in the chart above and listed below are shown in billions of constant (FY 2005) dollars. Note that the federal budget was nearly balanced in FY 2007.

  • 2003 -402.6
  • 2004 -427.9
  • 2005 -318.3
  • 2006 -239.7
  • 2007 -151.0
  • 2008 -415.7
  • 2009 -1,274.4
  • 2010 -1,153.0
  • 2011 -1,127.6
  • 2012 -1,123.1 (estimate)

The chart below summarizes receipts and outlays as percentages of Gross Domestic Product. Notice how the budget gap has widened dramatically since 2009.

Obama’s ideas on the economy are nothing more than classic Loot-and-Plunder, trickle-up, middle-out snake oil. In other words, borrow now – pay never. It didn’t work during the Great Depression, it hasn’t worked since 2009, it has never worked and it never will. Proposing to implement 1/16th of President Clinton’s 1990’s tax policies, while ignoring the fact that back then, income tax rates were higher on every American across-the-board, isn’t a serious plan for either growing the economy or balancing the budget. It’s a notion that most certainly fails to justify the felonious borrowing conjured up by Transportation Secretary LaHood just yesterday.

It’s time to return to supply-side economics which proved itself during the Roaring 20’s, the 1960’s, the 1980’s, the 1990’s and most of the 2000’s (through 2007). Obama has no plan to pay down the $5.3 trillion (in current dollars) which he’s added to the national debt, let alone the $16 trillion overall balance. Yet he seems to have no problem borrowing another $500 million under the guise that it’s somehow Bush’s fault. That’s right! Expect the extra $500 million in borrowing to magically be credited to George W. Bush, while Obama continues to promote the obvious lie that spending hasn’t increased on his watch.

But as each of the above charts show, whether in terms of current dollars, constant (FY 2005) dollars, or as percentages of GDP, Obama has allowed spending to skyrocket while revenues have continued to suffer due to a weak economy and high unemployment, symptoms of his failed economic policies. It’s time to put an end to this churlish presidency. Borrow It or Save It? We can wait – all the way to November 6th.

“The debt and the deficit is just getting out of control, and the administration is still pumping through billions upon trillions of new spending. That does not grow the economy.” ~ Paul Ryan


During 2008 the Highway Trust Fund required support of $8 billion from general revenue funds to cover a shortage in the fund. This shortage was due to lower gas consumption as a result of the recession and higher gas prices. Further transfers of $7 billion and $19.5 billion were made in 2009 and 2010 respectively.

^ Weiss, Eric M. (September 6, 2008). “Highway Trust Fund Is Nearly Out of Gas“. The Washington Post. Retrieved May 4, 2010.

^ “President Signs Bill Providing 9-Month Extension, $19.5 Billion for Highway Trust Fund“. The Washington Post. March 19, 1010. Retrieved August 15, 2011.




Trickle Up Economics | Peter Schiff

Chart Data: Spreadsheet | Google Drive

Understanding Obama’s Loot and Plunder Theory

A.K.A. Trickle-up, or Trickle-sideways

– By: Larry Walker, Jr. –

The ignorance of one voter in a democracy impairs the security of all.” ~ John F. Kennedy –

“Trickle-down theory” is a pejorative term in United States politics which refers to the idea that tax breaks or other economic benefits provided by government to businesses and the wealthy will benefit poorer members of society by improving the economy as a whole. In the real world, and called by its proper name, supply-side economics has never failed. In fact, in spite of the ignorance of a few, any improvement in our economy since the end of the Great Recession can be attributed directly to the remaining bands of supply-side tax policies left over from the Bush Tax Cuts, which are scheduled to expire on December 31st.

In the 1980’s what was known as Reaganomics was pejoratively referred to by RINO’s and the far-left as “trickle-down” or “voodoo” economics. But they were wrong. Supply-side economics worked then and it will work now. Yet according to our clueless president, Barack Obama, it’s just “fairy dust”. We have to remind the far-left, including our clownish president (act like a clown and you get called one), that the four pillars of Reagan’s economic policy were to reduce growth of government spending, reduce income taxes and capital gains taxes, reduce government regulation of the economy, and control the money supply to reduce inflation. Now if that’s just “fairy dust” to you, then perhaps like Mr. Obama, back in your college days, you took one drag too many off a marijuana cigarette.

Mitt Romney’s five-point plan is the closest platform on the ballot to Reagan’s four pillars. Romney’s policies would also cut the deficit, reduce income taxes and capital gains taxes, reduce the number of government regulations, and would create a Reagan Economic Zone to strengthen free-enterprise and the U.S. Dollar world-wide. We call this supply-side economics. What’s the alternative? Does Obama have a better plan? Economist George Reisman, a proponent of tax cuts, said the following:

“Of course, many people will characterize the line of argument I have just given as the ‘trickle-down’ theory. There is nothing trickle-down about it. There is only the fact that capital accumulation and economic progress depend on saving and innovation and that these in turn depend on the freedom to make high profits and accumulate great wealth. The only alternative to improvement for all, through economic progress, achieved in this way, is the futile attempt of some men to gain at the expense of others by means of looting and plundering. This, the loot-and-plunder theory, is the alternative advocated by the critics of the misnamed trickle-down theory.”

On the other side of reality is Barack Obama’s one-point plan, also known as Obamanomics, “trickle-up”, “trickle-sideways” or “loot-and-plunder theory”. Under the Obama hypothesis, the deficit isn’t cut, income and capital gains taxes are hiked on those making over $250,000 while remaining static on those making less, the number of government regulations on the economy continue to expand, and nothing is done to improve the U.S. trade deficit or to strengthen the dollar. In other words, his one-term plan lacks a growth catalyst. Raising taxes on businesses and the wealthy isn’t an economic growth strategy, not even according to its chief proponent, Barack Obama. It’s merely a futile attempt of some men to gain at the expense of others by means of looting and plundering.

The Ends of Obama’s Loot-and-Plunder Theory

There are many countries with top tax rates higher than the 35% paid by the wealthiest Americans. In fact, the U.S. is ranked #23 in terms of top marginal tax rates among the 96 countries surveyed by KPMG in 2011. In the U.S. the top rate kicks in at around $388,350 of taxable income in 2012. Workers are also mandated to pay social security taxes of 4.2% (10.4% if self-employed) on the first $110,100 in wages, plus another 1.45% (2.9% if self-employed) on an unlimited amount of earned income. The U.S. tax on capital gains is currently 15%. The top U.S. corporate tax rate also clocks in at a healthy 35%, in addition to a matching portion of social security and Medicare taxes (6.2% of the first $110,100 and an unlimited 1.45%) on wages paid.

Among nations with the highest tax rates in the world, Ireland ranks #10. Its top tax rate of 48% kicks in at about $43,900 USD of taxable income (including a Universal Social Tax of 7.0%). Other notable taxes include a capital gains rate of 30%, and a pay related social insurance tax of 4% (also 4% if self-employed, with a 10.75% employer match). But while its personal tax rates are high, it has among the lowest corporate tax rates in Europe at just 12.5%.

The country with the #1 tax rate in the world is the Dutch territory of Aruba. Its top marginal rate of 58.95% kicks in at around $165,000 USD of taxable income, but the 35% rate kicks it at around $38,500 USD. Other notable taxes include a capital gains tax of 25%, a 1.6% (9.5% if self-employed) health insurance tax, a 4.0% (13.5% if self-employed) pension and accident insurance tax, and a 3% national sales tax. While its individual tax rates are the highest in the world, Aruba levies a flat corporate tax rate of just 28%, which is better than in the U.S.

A quick analysis of nations with the highest tax rates in the world reveals one common thread. Once a populace is conned into loot-and-plunder theory and tax rates begin to rise, it’s not long before tax brackets fall to a level where top tax rates affect almost everyone except for those below the poverty line. The top tax rate of 48% in Ireland kicks in at around $43,900 USD of taxable income and a tax rate of 35% kicks in at around $38,500 USD in Aruba. And that’s not including social insurance, health care, and VAT or national sales taxes which always follow. Where loot-and-plunder theory ends is when every middle-class worker is forking over 40% or more of their income to the government.

Live by the sword, die by the sword. If you’re in favor of hiking taxes on businesses and the wealthy, then you’re in favor of having your own and everyone else’s taxes hiked as well. That’s the deal. That’s the choice. The only one on the ballot offering a 20% across-the-board tax rate cut on every American is Mitt Romney. The only one offering not to tax interest, dividends or capital gains for those making less than $200,000 is Mitt Romney. The only one offering to eliminate the Alternative Minimum Tax and the Death Tax is Mitt Romney. The only one offering to cut the top corporate tax rate to 25% is Mitt Romney. The only pro-growth, deficit reduction plan on the ballot is Mitt Romney’s. The only things standing in the way are the clueless clown and part-time president Barack Obama (no I’m not laughing), and the ignorance of a few.

“Our tax system still siphons out of the private economy too large a share of personal and business purchasing power and reduces the incentive for risk, investment and effort – thereby aborting our recoveries and stifling our national growth rate.” ~ John F. Kennedy, Jan. 24, 1963, message to Congress on tax reduction and reform, House Doc. 43, 88th Congress, 1st Session


Oxford English Dictionary

“The General Benefit from Reducing Taxes on the ‘Rich'”.Capitalism: A Treatise on Economics. p. 308. ISBN 978-0915463732

Countries With the Highest Income Tax Rates | CNBC

Aruba Tax Rates

Ireland Income Taxes and Tax Laws 2012

Obama’s Economic Fallacy: The Not-To-Do List

Small Business Goals, Rewards and Incentives

* By: Larry Walker, Jr. *

“Contrariwise, if it was so, it might be; and if it were so, it would be; but as it isn’t, it ain’t. That’s logic.” ~ Lewis Carroll *

In his latest weekly address, Mr. Obama outlined a mirage of goals, rewards and incentives which he says Congress ‘must’ act upon immediately. But for the most part, what he proffered are just more of the same tried and failed policies, conjured from the same line of illogical reasoning we’ve heard, time and time again, over the last four years. Therefore, what Mr. Obama coined as a “Congressional To-Do List” should rather be endorsed as the official “Not-To-Do List”. Why? Well, let’s test the logic of just one item on the, so called, ‘To-Do List’.

Mr. Obama said, “Third, Congress should help small business owners by giving them a tax break for hiring more workers and paying them higher wages. Small businesses are the engine of economic growth in this country. We shouldn’t be holding them back – we should be making it easier for them to succeed.”

In order to understand why Mr. Obama’s argument is fallacious, one must understand what an argument is. Very briefly, an argument is an attempt to persuade someone of something, by giving reasons or evidence for accepting a particular conclusion. It consists of one or more premises followed by a conclusion. In a logical argument, the premises support the conclusion. When we place Mr. Obama’s argument in its proper order we arrive at the following:

Premise 1 – Small businesses are the engine of economic growth in this country.

Premise 2 – We (the government) shouldn’t be holding them back – we should be making it easier for them to succeed.

Conclusion – Congress should help small business owners by giving them a tax break for hiring more workers and paying them higher wages.

No one in their right mind would disagree with either premise. Yes, small businesses are the engine of economic growth in the USA. And no, the government shouldn’t be holding us back, but should rather get out of our way, and off of our backs, so that we may succeed. However, the premises Mr. Obama presented do not support his conclusion.

Will the act of offering or failing to offer the reward of tax breaks to small businesses, that hire more workers and pay higher wages, make them any more, or less, the engine of economic growth in America? Will the act of passing additional governmental laws, rules, regulations and loopholes make it any easier for small businesses to succeed?

As a small business owner myself, I can state first hand, that offering my company a reward for hiring more workers and paying them higher wages won’t help my company in the least. That’s because nowhere in my mission statement will you find the stated goals of hiring more workers and paying them higher wages.

How many small business owners do you know that are in business for the purpose of hiring more workers and paying them higher wages? I’m in business to provide a top quality, affordable service, and to hopefully make a profit in the process, not to hire more workers and pay higher wages.

In my world, hiring more workers and paying higher wages are by-products of increased demand. But since demand is still a far cry from where it was in 2007, why would I suddenly alter my goals toward hiring more workers and paying them higher wages? If demand were to suddenly increase, I might be forced to hire more workers and/or offer higher wages, but I would not do so to receive a deficit-financed government reward.

If, and when, I decide to hire another employee, the decision will be solely based on demand. But as long as the economy remains in its present lackadaisical state, if enacted, Mr. Obama’s proposed reward will wind up just like the 17 other so called tax cuts he has offered to small businesses over his failed term – another waste of paper and ink. If anything, what small business owners lack is an incentive to succeed, not more rewards for jumping through narrowly defined governmental hoops.

Goals, Rewards and Incentives

In order to understand how illogical Mr. Obama’s proposal is, one must have an understanding of goals, rewards and incentives. A goal is simply the purpose toward which an endeavor is directed. And while a reward is a positive reinforcement granted after the performance of a desired behavior, an incentive is an expectation of reward, offered in advance, in order to induce action or motivate effort.

Goal: The purpose toward which an endeavor is directed; an objective.

Reward: The return for performance of a desired behavior; positive reinforcement.

Incentive: An expectation of reward that induces action or motivates effort.

In the matter at hand, an incentive would be something offered upfront to motivate small business owners to reach their own goals. But what Mr. Obama has proposed is to reward small business owners after they achieve a government-imposed goal.

According to Mr. Obama, the measure of success for a small business lies in the number of persons it employs. What’s wrong with this theory? The main problem is that it fails to align with the realistic goals of most small businesses. Following is a list of goals for my small business. As you can see, hiring more workers and paying them higher wages isn’t on the list.

  1. Offer top quality services at affordable prices.

  2. Make a profit.

  3. Control costs.

  4. Maintain sufficient demand to remain viable.

  5. Meet all current obligations with current revenue.

  6. Payoff existing debt without incurring more.

  7. Build and maintain a prudent reserve.

  8. Achieve moderate growth, in-line with current resources.

Hiring more workers and paying them higher wages might be Obama’s goal for business owners, but what business has he ever run? Common sense dictates that hiring more workers and paying higher wages are by-products of successful business practices, not primary objectives. It is only when small business owners meet their goals that business activity, hiring and wages increase. So instead of offering a reward for something low on the priority list of small business owners (not even on my list), Congress could do better by offering an incentive to help small businesses reach their true goals. Number one on that list is, indisputably, a reduction of individual income tax rates.

Lower Individual Income Tax Rates

Like me, since most small business owners are taxed at the individual level, lowering individual income tax rates will support small businesses in the following ways:

  1. Helps small businesses keep prices level by not forcing them to raise prices to meet higher income tax obligations.

  2. Enables small companies to maintain the same effective profit margin, in the present unstable economy, without raising prices or slashing expenses.

  3. Makes it easier to control costs without raising prices, or laying-off existing workers.

  4. Helps small companies stay in business in the face of lower demand, which is the by-product of oppressive government taxing and regulatory policies.

  5. Allows small businesses to meet current obligations without incurring additional debt.

  6. Enables small companies to pay down existing debt without incurring more.

  7. Allows small companies to build prudent reserve accounts to meet obligations in the face of future business cycle downturns.

  8. Helps small companies achieve moderate growth in-line with existing resources.

In addition, lowering individual income tax rates will enable increased consumer demand for the products and services offered by small businesses, since a rate cut would apply to everyone across-the-board. Lower income tax rates are therefore a win-win for the economy.

Who asked you anyway?

The only one asking for tax breaks for small businesses that hire more workers and pay them higher wages is Barack Obama. No small business owner that I know has requested any such nonsense. But on the other hand, everyone that I know would benefit from the incentive of lower individual income tax rates. If we can’t agree on this, can we at least agree not to raise individual income tax rates?

Raising tax rates on small business owners on January 1, 2013, which is what’s really on the table, will not help them reach their goals, nor will it achieve Mr. Obama’s fallacious goal. Raising taxes will rather have the opposite effect. Even if the proposed carrot on a stick, tax breaks for those who hire more workers and pay higher wages, is offered, the pending tax hikes will negate that reward, leaving both those who take the bait, and those who don’t in jeopardy.

Arbitrarily hiring more workers and paying higher wages, in a stagnant economy, will force small businesses to raise prices on existing customers, and raising prices, without regard to demand, will have the effect of reducing demand, as customers seek lower cost alternatives. The resulting drop in demand, in the face of higher costs, will lead to further price hikes, in order to meet current obligations. In effect, pursuing the third item on Mr. Obama’s ‘To-Do List’ would land most small businesses – out-of-business – in double-time.

I am frankly sick and tired of all the special interest gimmicks conjured from the illogical mind of an amateur. What Mr. Obama ought to do at this point is simply surrender the keys, and let someone who knows what they’re talking about manage the economy. That’s what I call a logical conclusion.

“Companies are not charitable enterprises: They hire workers to make profits. In the United States, this logic still works. In Europe, it hardly does.” ~ Paul Samuelson


Picture via: Christ, My Redeemer



War on Wealth III | National Debt Review

* Great Debt Spikes in American History: 1792 to 2014 *

By: Larry Walker, Jr. –

By the end of 2012, the national debt per citizen will reach $52,222 for every man, woman, and child in the United States of America. But even more sobering and significant is the fact that the national debt per U.S. taxpayer will reach $144,539 for each and every American taxpayer. So while Mr. Obama portends to be fighting wealth disparity, what he has accomplished in all his efforts has only made every American citizen poorer.

The public debt of the United States can be traced back as far as the American Revolution. In 1776, a committee of ten founders took charge of what would become the U.S. Treasury, and they helped secure funding for the war through “loan certificates” (equivalent to bonds) with which they borrowed money from France and the Netherlands. This committee morphed over the next decade into the Department of Finance. Robert Morris, a wealthy merchant and Congressman was chosen to lead the new Department of Finance in 1782. On January 1, 1783, the public debt of the new United States totaled $43 million.

By 1792 the public debt had climbed to $80 million. The debt ratio, as a percentage of Gross Domestic Product (Debt-to-GDP), stood at just 34.6% in 1792. However, as of February 26, 2012, the gross public debt of the United States now totals $15.4 trillion, and the Debt-to-GDP ratio equals more than 100%. Of all the wars America has fought, none has been more costly than Obama’s War on Wealth. So what is the War on Wealth? How costly is this campaign compared to other wars? And when will it end?

The War on Wealth

The War on Wealth (2009 – Present) is a political, philosophical, and mostly rhetorical war launched within the United States in 2009, by the Progressive Party leader, and part-time President of the United States, Barack Obama. The war is in essence a Second Civil War, except this time there are no slaves to free, and no States to Unite. The war was instead launched to pit poor Americans against middle class Americans, and both groups against wealthy Americans, its main theme being “fairness”. Some of its top tenets include the following:

  1. The rich must pay the same effective income tax rate as the poor and middle class. Another way of stating this would be simply, “There should be a flat tax levied on everyone based on gross income.” But in the War on Wealth, this is not the goal. What Obama really means is that the rich should pay a higher percentage of taxes, while 50% of working Americans pay none.

  2. The unemployed must be paid government benefits for up to three years or longer, at the expense of the federal government. The main problem with this theory is that it’s not the federal government that pays, but instead small business employers and working taxpayers have to pick up the tab. For example, under the 2011 Federal Unemployment Credit Reduction Rule, a $21 per employee tax was levied on employers in most states, while Michigan employers paid the highest rate at $63 per employee, the funds being used to pay for the last unemployment extension. I didn’t at all appreciate having to pay $21 for each active employee, to cover the unemployed who never worked for my company, especially since Georgia had already chosen to charge my company the maximum rate for State unemployment taxes. Of course, an even bigger problem with this theory is that every extension of unemployment benefits directly increases the duration of unemployment.

  3. The federal government must provide health insurance benefits for everyone. Once again, the main problem with this is that it’s not the federal government that pays, but rather it’s those who (if they are lucky) are barely able to afford to take care of their own health care needs, who are now being asked to pay even more to help those who can’t afford to pay for their own care. I can’t afford health insurance right now, because it costs too much. But I don’t want you to pay for my care; I want the government to get out of the market and increase free-market competition so that I will be able to afford it. For the time being, I am paying the cost of my own health care needs without insurance.

  4. The government must ensure that everyone who works hard should do well enough to raise a family, own a home, send their kids to college and put a little away for retirement. What’s wrong with this tenet? Well, first of all, how does one define the term “hard work”? Did a high school drop-out who works at McDonald’s work as hard to reach his or her goal as a PhD? Is everyone who has a job considered a “hard worker”? Based on my own work experience, I know that not everyone who works does so at the same level of responsibility, complexity or productivity. If all work were created equal, then when I was a low level accounting manager, I should have been paid just as much as the Comptroller and CFO, right? And when I was a mail clerk at a top accounting firm back in the 1980’s, I should have been paid just as much as the senior accountants and all the partners, right? Nonsense.

    And then, who’s to say that everyone wants to raise a family, own a home, or even has kids to send to college? I chose to get married and raise a step-son and three children of my own, but my next door neighbor has never been married and doesn’t have children. I later got divorced from my first wife and then chose to remarry and to help raise another three step-children in addition to my three kids. And I’m sorry to tell you this, but I’m afraid there are no shortcuts. Every individual is responsible for figuring out such matters on their own, just like my family, and our forefathers before us.

    My suggestion for anyone who wants to raise a family, own a home, and send their kids off to college, is that you take all of this into consideration while planning your future. And if you fail to plan, or if your plan fails, then don’t look to me or anyone else to bail you out, because we have our own lives to contend with. Our lives haven’t exactly been a piece of cake, but rather about making choices and then taking personal responsibility for our actions, the good, the bad, and the ugly.

How much has the War on Wealth cost?

Thus far, the War on Wealth has added another $6.4 Trillion (USD) to the national debt, which is more than any other debt spike in U.S. history. Yet this record level of borrowing and spending has delivered next to nothing in terms of results. Thus far, the war has sent our nation’s Debt-to-GDP ratio soaring from 69.9% at the end of 2008, to 104.8% in 2012. In fact, the last (and only) time that the United States’ debt-to-GDP ratio exceeded 100% was during World War II. But it only took 4 years to win the Second World War, while the War on Wealth has no end in sight.

The War on Wealth won’t end until the government runs out of other people’s money. But once that happens, it will also spell the end of the United States of America. However, thankfully the War on Wealth appears to be backfiring. Recently, the focus has shifted from a feeling of guilt for failing to help the poor and needy, to most Americans, even many on the left, now inquiring as to where the $6.4 trillion, which Mr. Obama has borrowed, was spent. Where’s the money? That’s what Americans want to know.

What Obama’s grand achievement has amounted to is a $20,329 increase in the per capita share of the national debt for every man woman and child in America, and even worse, an increase of $56,266 for every U.S. taxpayer. Has your personal income increased by $20,329, over the last four years (for each person in your household)? Probably not, but irrespective of whether it did, as a U.S. taxpayer, your share of future income taxes just went up by $56,266 courtesy of Obama’s War on Wealth.

Barack Obama will have borrowed and spent $6.4 trillion during his 4 year presidency, which is more than any other president in U.S. History. He has borrowed and spent more than was required to fight any war America has fought in her great history, and many times more than was spent even during the Great Depression. Yet nothing has changed, no victory has been won, and no American is better off than they were 4 years ago. So just how bad is Obama’s deficit spending from a historical perspective? Let’s go back in time and compare.

The War of 1812

The War of 1812, also known as the Anglo-American War (1812 – 1815), was a military conflict fought between the forces of the United States of America and those of the British Empire. America declared war in 1812 for several reasons, including trade restrictions due to Britain’s ongoing war with France, the impressment of American merchant sailors into the Royal Navy, British support of American Indian tribes against American expansion, and outrage over insults to national honor after humiliations on the high seas.

From a Debt-to-GDP Ratio of 5.8% in 1812, the ratio peaked at 16.2% in 1817 before subsiding, ultimately reaching a trough of 0.0% in 1835. During this period, the national debt increased from $50 million in 1812, to $120 million by 1817, but was subsequently wiped out entirely by 1835. In fact, the national debt was negligible from 1834 through1842, totaling between $0 to less than $10.0 million, an amazing feat considering that there was no income tax during the era.

The Civil War

The American Civil War (1861–1865) was a civil war fought in the United States of America. In response to the election of Abraham Lincoln as President of the United States, 11 southern slave states declared their secession from the United States and formed the Confederate States of America (“the Confederacy”); the other 25 states supported the federal government (“the Union”). After four years of warfare, mostly within the Southern states, the Confederacy surrendered and slavery was outlawed everywhere in the nation.

From 1.9% in 1861, the Debt-to-GDP ratio peaked at 32.9% in 1869 before subsiding. It would ultimately reach a trough of 7.3% in 1916. During the era, the national debt increased from $90 million in 1861, to $2.6 billion in 1869, and would ultimately reach $3.6 billion by 1916. Although the national debt had increased by 1916, the Debt-to-GDP ratio was lower due to a surge in GDP following the war. What’s interesting to note is that although a temporary income tax was imposed to pay for the war, it only existed between the years of 1862 and 1872. In fact, no income tax was imposed on American citizens from the founding of the nation until 1862, and no income tax existed between the years 1873 and 1912.

World War I

World War I (1914 – 1918) was a major war centered in Europe that began on July 28, 1914 and lasted until November 11, 1918. It involved all the world’s great powers, which were assembled in two opposing alliances: the Allies (based on the Triple Entente of the United Kingdom, France and Russia) and the Central Powers (originally centered around the Triple Alliance of Germany, Austria-Hungary and Italy). These alliances both reorganized (Italy fought for the Allies), and expanded as more nations entered the war. Ultimately more than 70 million military personnel, including 60 million Europeans, were mobilized in one of the largest wars in history. More than 9 million combatants were killed, largely because of great technological advances in firepower without corresponding advances in mobility. It was the sixth deadliest conflict in world history, subsequently paving the way for various political changes such as revolutions in the nations involved.

In January 1917, Germany resumed unrestricted submarine warfare. The German Foreign Minister, in the Zimmermann Telegram, told Mexico that U.S. entry was likely once unrestricted submarine warfare began, and invited Mexico to join the war as Germany’s ally against the United States. In return, the Germans would send Mexico money and help it recover the territories of Texas, New Mexico, and Arizona that Mexico had lost during the Mexican-American War 70 years earlier. Wilson released the Zimmerman note to the public, and Americans saw it as a cause for war.

President Wilson spoke before Congress, announcing the break in official relations with Germany on February 3, 1917. After the sinking of seven U.S. merchant ships by submarines and the publication of the Zimmerman telegram, Wilson called for war on Germany, which the U.S. Congress declared on April 6, 1917.

From 7.2% in 1916, our Debt-to-GDP ratio peaked at 32.6% in 1921 before subsiding. The debt would ultimately reach a trough of 16.3% of GDP in 1929. During the era, the national debt increased from $3.6 billion in 1916 to $23.9 billion by 1921, before resting at $16.9 billion in 1929. The national debt actually declined between 1921 and 1929 along with the debt ratio. The primary reason for this phenomenon was that GDP soared after implementation of the Mellon Tax Bill, which lowered the top personal income tax rate from 73% in 1919 to just 25.0% from 1925 through 1931.

The Great Depression

The Great Depression, although not a war, was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930’s or early 1940’s. It was the longest, most widespread, and deepest depression of the 20th century.

The Great Depression is commonly used as an example of how far the world’s economy can decline. The depression originated in the U.S., starting with the fall in stock prices that began around September 4, 1929 and became worldwide news with the stock market crash of October 29, 1929 (known as Black Tuesday). From there, it quickly spread to almost every country in the world.

The Great Depression had devastating effects in virtually every country, rich and poor. Personal income, tax revenue, profits and prices dropped, while international trade plunged by more than 50%. Unemployment in the U.S. rose to 25% and in some countries rose as high as 33%. Some economies started to recover by the mid-1930’s. But in many countries, the negative effects of the Great Depression lasted until the start of World War II.

From 16.3% in 1929, the Debt-to-GDP ratio peaked at 50.0% in 1940 before subsiding. The debt would ultimately reach a trough of 45.4% of GDP in 1941. During the era, the national debt increased from $16.9 billion in 1929 to $50.7 billion by 1940, before resting at $57.5 billion in 1941. Although the national debt continued to increase from 1940 to 1941, Debt-to-GDP declined from 50.0% to 45.4% due to an increase in GDP related to the pre-war buildup.

World War II

World War II was a global conflict that was underway by 1939 and ended in 1945. It involved most of the world’s nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis. It was the most widespread war in history, with more than 100 million military personnel mobilized. In a state of “total war”, the major participants placed their entire economic, industrial, and scientific capabilities at the service of the war effort, erasing the distinction between civilian and military resources.

Marked by significant events involving the mass death of civilians, including the Holocaust and the only use of nuclear weapons in warfare, it is the deadliest conflict in human history, resulting in 50 million to over 70 million fatalities. The United States didn’t formally enter the war until the Japanese bombing of Pearl Harbor on December 7, 1941.

From 45.4% in 1941, the Debt-to-GDP ratio peaked at 121.9% in 1946 before subsiding. The debt would ultimately reach a trough of 31.8% of GDP in 1981. During the era, the national debt increased from $57.5 billion in 1941 to $270.9 billion by 1946, before resting at $994.8 billion in 1981. Although the national debt increased almost 4-fold from 1946 to 1981, growing from $270.9 billion to $994.8 billion, the Debt-to-GDP ratio declined from 121.9% to 31.8%. The decline in the debt ratio was due to an increase in GDP following the war. In fact, over this period, GDP increased 14-fold – growing from $222.2 billion in 1946 to $3.1 trillion by 1981.

[It’s notable that top personal income tax rates were increased from 25% in 1931 to as high as 94% in 1944 -1945, but were later reduced to just 70% from 1965 through 1981 by John F. Kennedy’s, Tax Reduction Act of 1964. Thus it was the post-war boom coupled with tax cuts which caused GDP to surge, leading to a decline in the Debt-to-GDP ratio.]

The Cold War

The Cold War (approx. 1945-1991) was a continuing state of political and military tension between the powers of the Western world, led by the United States and its NATO allies, and the communist world, led by the Soviet Union, its satellite states and allies. This began after the success of their temporary wartime alliance against Nazi Germany, leaving the USSR and the US as two superpowers with profound economic and political differences.

The Soviet Union created the Eastern Bloc with the eastern European countries it occupied, maintaining these as satellite states. The post-war recovery of Western Europe was facilitated by the United States’ Marshall Plan, while the Soviet Union, wary of the conditions attached, declined and set up COMECON with its Eastern allies. The United States forged NATO, a military alliance using containment of communism as a main strategy through the Truman Doctrine, in 1949, while the Soviet bloc formed the Warsaw Pact in 1955. Some countries aligned with either of the two powers, whilst others chose to remain neutral with the Non-Aligned Movement.

In the 1980s, the United States increased diplomatic, military, and economic pressures on the Soviet Union, at a time when the nation was already suffering economic stagnation. In the late 1980s, Soviet President Mikhail Gorbachev introduced the liberalizing reforms of perestroika (“reconstruction”, “reorganization”, 1987) and glasnost (“openness”, ca. 1985). This opened the country and its satellite states to a mostly peaceful wave of revolutions which culminated in the collapse of the Soviet Union in 1991, leaving the United States as the dominant military power.

From 32.8% in 1981, the Debt-to-GDP ratio peaked at 66.1% in 1996 before subsiding. The debt would ultimately reach a trough of 56.4% of GDP in 2001. During the era, the national debt increased from $994.8 billion in 1981 to $5.2 trillion by 1996, before resting at $5.8 trillion in 2001. Although the national debt increased from $5.2 trillion in 1996 to $5.8 trillion in 2001, the Debt-to-GDP ratio declined from 66.1% to 56.4%. The decline in the Debt-to-GDP ratio was primarily due to a rise in GDP, which had grown from $3.1 trillion in 1981 to $10.2 trillion by 2001. The growth in GDP was primarily due to Ronald Reagan’s Tax Reform Act of 1986.

The War on Terror

The War on Terror, also known as the Global War on Terror or the War on Terrorism (2002 to January 20, 2009), is a term commonly applied to an international military campaign led by the United States and the United Kingdom with the support of other NATO as well as non-NATO countries. Originally, the campaign was waged against al-Qaeda and other militant organizations with the purpose of eliminating them.

The origins of al-Qaeda as a network inspiring terrorism around the world and training operatives can be traced to the Soviet war in Afghanistan (December 1979 – February 1989). In May 1996 the group World Islamic Front for Jihad Against Jews and Crusaders (WIFJAJC), sponsored by Osama bin Laden and later reformed as al-Qaeda, started forming a large base of operations in Afghanistan, where the Islamist extremist regime of the Taliban had seized power that same year. In February 1998, Osama bin Laden signed a fatwa, as the head of al-Qaeda, declaring war on the West and Israel, later in May of that same year al-Qaeda released a video declaring war on the US and the West.

Following the bombings of US embassies in Kenya and Tanzania, US President Bill Clinton launched Operation Infinite Reach, a bombing campaign in Sudan and Afghanistan against targets the US asserted were associated with WIFJAJC, although others have questioned whether a pharmaceutical plant in Sudan was used as a chemical warfare plant. The plant produced much of the region’s anti-malarial drugs and around 50% of Sudan’s pharmaceutical needs. The strikes failed to kill any leaders of WIFJAJC or the Taliban.

It was the 2000 millennium attack plots, including an attempted bombing of Los Angeles International Airport, the bombing of the USS Cole in October 2000, followed by the September 11, 2001 attacks, which led to a declaration of war. The War on Terror officially ended on January 20, 2009, when it was reduced to an Overseas Contingency Operation, and with commencement of the War on Wealth.

From 56.4% in 2001, the Debt-to-GDP ratio peaked at 69.9% in 2008. During the era, the national debt increased from $5.7 trillion in 2001 to $9.9 trillion by 2008. The debt has since skyrocketed as a result of the new War on Wealth. Although the gross public debt increased by $4.2 trillion, from 2001 through 2008, expanding from $5.7 to $9.9 trillion, it has subsequently burgeoned by another $6.4 trillion in half the time, since the commencement of the War on Wealth. From 2009 through 2012, the federal debt will have ballooned from $9.9 trillion to $16.3 trillion. The debt will ultimately reach a peak of 104.8% of GDP by the end of 2012, and is expected to increase to 107.8% by the year 2014.

Summary of Federal Borrowing

  • War of 1812 – Increase in Federal Debt: $70 million

  • American Civil War of 1861 – Increase in Federal Debt: $2.5 billion

  • World War I – Increase in Federal Debt: $20.3 billion

  • The Great Depression – Increase in Federal Debt: $33.8 billion

  • World War II – Increase in Federal Debt: $213.4 billion

  • Cold War – Increase in Federal Debt: $4.8 trillion

  • War on Terror – Increase in Federal Debt: $4.2 trillion

  • War on Wealth – Increase in Federal Debt (to date): $6.4 trillion


What is significant about all of these great debt spikes in American history is that it took 189 years (1793 to 1981) for the national debt to reach $994.7 billion, an average increase of $5.2 billion per year. From there on it took just 20 years (1982 to 2001) for the debt to rise by another $4.8 trillion, an average increase of $238.7 billion per year. Subsequent to that, it took a mere 7 years (2002 to 2008) for the debt to grow by another $4.2 trillion, an average increase of $602.3 billion per year. Compared with the former eras, the federal debt has surged by another $6.4 trillion just since January of 2009, which amounts to an average increase of $1.6 trillion per year.

With federal borrowing now completely out of control, one can only wonder who’s really benefiting from the War on Wealth, and when it will come to an end. What Obama’s grand achievement has amounted to is a $20,329 increase in the per capita share of the national debt for every man woman and child in America, and even worse, an increase of $56,266 for every U.S. taxpayer. Has your personal income increased by $20,329, over the last four years (for each person in your household)? Probably not, but irrespective of whether it did, as a U.S. taxpayer, your share of future income taxes just went up by $56,266 courtesy of Obama’s War on Wealth.

By the end of 2012, the national debt per citizen will reach $52,222 for every man, woman, and child in the United States. But even more sobering and significant is the fact that the national debt per taxpayer will reach $144,539 for each and every American taxpayer. So while Obama portends to be fighting wealth disparity, what he has accomplished in all his efforts has only made every American citizen poorer.

Well, we have a choice, we can either wait for the next recession, or the next genuine war, either of which will surely bankrupt our nation, or we can end the War on Wealth once and for all, in November of 2012, by simply voting Obama out. It’s time to stop playing games and time to get serious about America’s future.

War on Wealth, Part II | Keeping Our Foot on the Gas

* Pieces of the Keystone XL pipeline await construction in South Dakota. Via: North Platte Post *

By: Larry Walker, Jr. –

When Mr. Obama visited the padlock maker Master Lock in Milwaukee, on February 15, 2012, he drew the following conclusions. He said, “Manufacturing is coming back. Companies are starting to bring jobs back. The economy is getting stronger. The recovery is speeding up. We’re moving in the right direction. And now we have to do everything in our power to keep our foot on the gas.” So in keeping with my fact based approach, I have to ask, Are Mr. Obama’s claims reasonable? Let’s run down the list.

“Manufacturing is coming back. Companies are starting to bring jobs back.”

First of all, in my last post, War on Wealth | Obama Visits Master Lock, I pointed out that the United States has lost more than 6.0 million manufacturing jobs since 1990, and almost 1.0 million of those have been lost since Obama’s inauguration (see chart above). That’s hardly indicative of a manufacturing boom. And since Master Lock only brought back an alleged 100 jobs from China, that’s hardly proof of companies bringing jobs back. It would have been more accurate to state, although less of a reason to re-elect Mr. Obama, that one U.S. company brought back 100 jobs from China.

“The economy is getting stronger. The recovery is speeding up.”

Next, according to the Bureau of Economic Analysis, GDP declined at an annual rate of (3.5%) in 2009, increased at an annual rate of 3.0% in 2010, and then slowed to an annual rate of just 1.7% in 2011 (as of 1/27/2012). So since our economy declined from an annual growth rate of 3.0% in 2010, to an annual growth rate of just 1.7% in 2011, does this mean the economy is getting stronger? Not in my book. So instead of backing Obama’s claim, that the recovery is speeding up, the facts show that the recovery is actually slowing down (see chart above).

“We’re moving in the right direction.”

Are we moving in the right direction? Well, in terms of deficit spending, the government is borrowing at the highest rate of GDP since World War II, as shown in the chart (above). The national debt as a percentage of GDP has skyrocketed from 69.9% in 2008 to 104.8% in 2012, and is projected to reach 107.8% by 2014. The last time our debt-to-GDP ratio surpassed 100% was in 1945, when the federal debt climbed to 116.6% of GDP, peaking at 121.9% in 1946.

We know where the money was spent during the Second World War, but where’s the $5 trillion Obama borrowed and spent? For God’s sake, we could have cured cancer, or built a colony on the Moon with that kind of dough.

In terms of the near record debt-to-GDP ratio, coupled with the continuing loss of manufacturing jobs and the year-over-year decline in GDP, I conclude that the United States is moving in the wrong direction.

“And now we have to do everything in our power to keep our foot on the gas.”

Wait a minute; did Mr. Obama dare mention the word gasoline in his delusional tirade? When I first heard this, I wondered for a minute whether he really meant to say, ‘And now we have to do everything in our power to keep our boot on the neck of U.S. oil and gas producers.’

According to the U.S. Energy Information Administration (EIA), gasoline prices have risen from an average price of $1.61 in the week ending December 29, 2008, to $3.52 through the week ending February 13, 2012 (see chart above).

So since gasoline prices have risen by 118.6% under the Obama Administration, perhaps we should be doing everything in our power to remove the federal government’s dead cold foot from the gas pedal. Gasoline prices are expected to rise further, to $4.50 per gallon by this summer, which may give Mr. Obama a temporary victory in his War on Wealth, but fortunately for America, his chance of re-election will simultaneously run out of gas.

To the contrary, instead of being a time to continue recklessly forward, our foot glued to the accelerator, now is the time for America to pull over to the pits for refuelling, new tires, repairs, mechanical adjustments, and a driver change. The replacement of Mr. Obama with a truly Conservative POTUS is imminent. And just so you don’t get the wrong idea, no, I’m not suggesting as a substitute the severely moderate Mitt Romney. [But I’ll back Mr. Romney in a heartbeat over another four years of Obama.]


A Crude Hit to the Recovery

18 Statistics That Prove That the Economy Has Not Improved Since Barack Obama Became President


War on Wealth | Obama Visits Master Lock

Manipulation 201: Playing With Unemployment

Drill Here, Drill Now | Facebook Petition

War on Wealth | Obama Visits Master Lock

:: By: Larry Walker, Jr. ::

Mr. Obama visited the padlock maker Master Lock in Milwaukee, Wisconsin on Wednesday, but wasn’t joined by Republican Gov. Scott Walker, who greeted the president upon arrival, but canceled his escort duties. Hey, so he was already sick to his stomach, and hanging out with Obama would have surely made matters worse.

During the event, after taking full credit for the whopping 100 jobs that Master Lock has brought back to Wisconsin from China, one of Obama’s many fabrications for the day, he added, “For the first time since 1990, American manufacturers are creating new jobs.”

However, according to the Bureau of Labor Statistics (BLS), there were 17,881,000 manufacturing jobs in the United States at the beginning of 1990, and only 17,395,000 by the end of that year (as seasonally adjusted). And by the end of the year 2000, the number had declined to 17,178,000 (shown graphically above).

Following the decline through to the end of the year 2008, the number of manufacturing jobs had fallen all the way to 12,849,000. In fact, by January of 2012, the latest statistics available prior to Obama’s speech, the BLS reported that the number of manufacturing jobs had fallen to just 11,862,000, which is almost one million fewer than when Obama first implemented his vision for America. So Obama is still delusional. What else is new?

Obama then continued with his own brand of manufacturing; the truth that is. He said, “It’s time to stop rewarding companies that ship jobs overseas and start rewarding companies that are creating jobs right here in the United States of America.”

So was it a reward that caused Master Lock to bring an entire 100 jobs back from China to Wisconsin? Did the company’s actions have anything remotely to do with Obama’s tax and regulatory policies? Obviously not, since Obama has yet to do anything to encourage such behavior. What has he done other than threaten companies with higher income taxes, Obamacare taxes, and more regulations? Not much to speak of, other than bailing out big banks and the GSE’s, and subsidizing the auto industry and the soon to be bankrupt Green Energy sector.

He rambled on, “Manufacturing is coming back. Companies are starting to bring jobs back. The economy is getting stronger. The recovery is speeding up. We’re moving in the right direction. And now we have to do everything in our power to keep our foot on the gas… And the last thing we can afford to do is go back to the same policies that got us into this mess.” YeeHa!

Man, that’s a lot of hoopla over 100 jobs. Studying the chart above, and considering Obama’s pedal to the metal analogy, if manufacturing is coming back, and if this alleged comeback is attributable to his Administration, then it looks like the government just needs to borrow and spend another $10 trillion (or so) and that should be enough get us back to where we left off in 1989. Keep on dreaming Mr. Obama!

Now as far as the policies that got us into this “mess”, I’m not sure which mess he’s referring to. Does he mean the mess we’re in now (i.e. $16 trillion in debt), or the mess that got us into the mess, that got us into the mess we’re in now? Does he mean that the policies of the relatively high tax era were bad, or the two relatively low tax eras which surrounded it? Or does he mean that the free-trade policies implemented in the 1990’s are the problem? I don’t think Obama even knows what he means. Not that anyone really cares what he says anymore.

Most of us are more focused on the $5 trillion the government has borrowed over the last three years, in this massive effort to get us virtually nowhere. What about that Mr. Obama? I think Congress should appoint an independent auditor to determine exactly where all that money went. I mean Obama has squandered a heck of a lot of money, and we have next to nothing to show for it.

Who knew? Maybe our future lies in padlocks. I suppose we’re going to need lots of locks just to keep our stuff safe from this new breed of fair share politicos. And in the meantime, it wouldn’t hurt to place one of those gigantic Master Locks on the U.S. Treasury.

The Great, Obama Unemployment Rate Scam | LibertyWorks

The Great, Obama Unemployment Rate Scam *

February 9, 2012 | By BoomerJeff *

Political communication in America is largely an effort to influence the perceptions of those who pay little attention to politics by stripping complex concepts and issues down to easily understood statistics and simplistic soundbites. In each of his first 33 months in office President Obama suffered because the easily understood Unemployment Rate remained very high. But over the past four months it fell from 9% to 8.3% and Obama and his media supporters are making the most of it. They tell us the economy has improved so much it is no longer an election issue and the President is no longer at risk of losing.

But it turns out that the Unemployment Rate statistic is misleading. It turns out that another statistic, the “Labor Force Participation Rate” has also declined. [Continued below the chart]

  • The Labor Force is the sum of all persons who have jobs plus all who are officially classified as “unemployed.”

  • The unemployment rate is computed by dividing the number of unemployed by the the labor force.

  • The labor force participation rate is the percentage of all working age adults who are officially counted as “in the labor force.”

Today, there are millions of people who want jobs but don’t qualify as “unemployed” by meeting government criteria and are thus counted as “not in the labor force.” We know this to be true because, as the chart shows, the participation rate has steadily declined for three years. Excluding people from the labor force artificially lowers the unemployment rate.

The chart above shows that the decline in the unemployment rate coincides with a decline in the labor force participation rate. The next chart shows what would have happened to the unemployment rate if the labor force participation rate had not not changed since the beginning of 2009. [Continued below the chart]

The last chart below tracks labor force participation and unemployment during the Reagan Administration. The labor force grew by 9% or 15.5 million people during the Reagan years. Participation grew from 63.9% to 66.1%. This chart is the picture of successful economic policies that increased liberty and decreased taxes and government intervention in the economy. Millions of new people entered the labor force but after the severe Recession Reagan inherited the unemployment rate declined because employers were able to replace all the jobs lost in the recession and hire the millions of people who entered the labor force. Reagan’s unemployment rate was not artificially reduced by excluding millions from of the labor force calculation and he was rewarded with reelection to a second term by the largest Electoral College landslide in American history.

Via: LibertyWorks – The Great, Obama Unemployment Rate Scam

I concur!