First: September 17, 2012
Last: September 17, 2012
The Republicans think if they keep repeating the same lies over and over again people will br hypnotized into believing them.If you look at the numbers, Obama is dealing with a stacked deck. First due to the failed economy and unnecessary tax cuts Federal revenues dropped 17% between 2008 and 2009. They are slowly recovering. Also to save the economy from collapsing extreme measures were required. Although I don’t agree with how it was incorporated, when you have disagreement in Congress on how to proceed and something needed to be done quickly you’re not going to get the best solution. If you look at the chart below you can see that the deficit exploded significantly under Obama but if you look at the 1930’s (depression) and 1940’s (war) you can see that this explosion in the deficit is historically not new or unexpected. If you look at the future estimates you can see that the deficit is returning to the levels of the 1970’s thru early 1990’s. Although that is good, it isn’t good enough. However, there is a time to reduce spending and a time not to reduce spending. This is not the time to create a balanced budget.
From the chart below it can be seen that unemployment went from the high 4% level in 2007 to 10% in 2009. Thanks to actions taken, the exploding unemployment rate was brought under control and now is slowly recovering coming down to the low 8% levels. Not that 8% is the goal but due to all the economic infrastructure that was destroyed due to the history making recession it cannot recover quickly. The damaged infrastructure needs to be rebuilt. That can’t happen overnight or even in a couple of years. It at least requires the housing sector recover. Also, as is typical of major recessions, it take time to work through the economy. First banks, housing and investors took the brunt of the hits. Next general employment took the hit with businesses either failing or scaling back. Next was public employees as now governments at all levels cut back due to decreasing revenues. Part of the drop off in job creation in the summer of 2010 seen in the chart below was due to local governments and schools laying off.
The foreclosed housing inventory peaked in the summer of 2009 and is slowly recovering. Until that inventory comes down to normal levels unemployment levels will stay elevated.
One other thing is going to be changing. To achieve the goal of a balanced budget and to also trying a reduce the deficit there is a price to pay. Higher unemployment. If you look at the chart below at the unemployment rate over the last few decades you can see that it averaged a low of about 3% (WWII) to a high of about 11%. If you had to pick an average it would appear to be about 5%. The price to pay for a balanced budget – higher unemployment – probably in the 6-7% range as the new normal.
What all the charts are showing is that the economy is recovering. No matter who is at the helm in the next 4 years they are going to benefit from the actions taken during this 4 years. In my opinion another 6 years is required to get back to some sense of normalcy and that can only occur if no major disruptions occur during that time frame.
What the country needs is for everyone to act like Americans. This is not the time or the place for partisan politics. It’s time for American action and an American voice!