US economy adds 96K jobs; unemployment rate falls to 8.1 percent
We know that it will take at least 200,000 new jobs per month in order to simply maintain pace with newer/younger generation of workers who wish to enter the workforce, much less get millions of people back to work who have lost their jobs. That will take closer to or greater than 350,000 jobs per month.
Given the current pace of job creation this year (139,000 jobs per month), the unemployment rate will likely remain above 8 percent by Election Day and probably well into next year.
IMPORTANT DETAILS! – The Bureau of Labor Statistics reported for every 1 job created last month 4 people looking for work dropped out of the process – they either ran out of unemployment benefit or simply quit looking for work. These people are not counted in the unemployment number reported yesterday (a figure known at the U-3).
That’s 368,000 people who are old enough, skilled enough, able, willing and wanting to work – who simply quit looking for work.
When comparing the number or working age citizens in our population to the actual number of citizens working – we are at the lowest number/ratio recorded in the last 32 years.
The Full Unemployment Number - what is known as the U-6; has been hovering around 15%. The U-6 is a measurement by the Federal Bureau of Labor Statistics.
PLEASE LISTEN – For those of you who are on the fence about whether to vote for Obama or Romney – the policies Obama has been using have not worked; and they will not work – because every time they have been attempted in our past – they have failed or simply never been as successful as others.
By the Way – Let’s Cut Through Some of the Recent Rhetoric
What President Obama is proposing to do – is simply and absolutely NOT what Clinton did in the 1990’s. I realize that Clinton said they were in his DNC speech the other night – but it is quite simply not true.
(I shared many details on that in previous posts).
Clinton said in his speech the other night – “Let’s look at the scorecard. Jobs created since WWII – Democrats 40 million jobs – Republicans 25 million jobs”
While statistically this is true – he was not lying. But – he was omitting something extremely important. Democrats and Republicans had economic and fiscal policies that were nearly identical to each other until the mid-1960’s. Clinton is also omitting the fact that he worked with and cooperated with fiscal republicans who controlled both the House and the Senate after 1992. Obama is not cooperating with Republicans what so ever.
While the number of jobs created under either party is well and good to look at – what is more important is to know and talk about what policies either party was following that resulted in those jobs.
ALSO – My friends and family who are city, county and state employees – your payroll, benefits and all of the overhead expenses associated with the programs each of you work within – ARE QUITE SIMPLY – dependent on tax payer dollars. If you want to see more available funds for these costs/programs – PLEASE – vote conservative. Under Reagan in the 80’s, and the fiscal policies Clinton continued in the 90’s (Clinton tacked to the middle and cooperated with conservatives in the House and Senate) – the dollars rolling into the Federal, State and local treasuries increased dramatically – PARTICULARLY in the 1980’s.
Your programs WILL benefit from conservative fiscal leadership. When people go back to work, the tax base will broaden and grow - and the total tax dollars flowing to fund programs will increase.
NOW – these are somewhat separate issues from things like Tax Reform – i.e. simplifying the tax code, closing or eliminating loop holes for the wealthy or certain industries and corporations who get politicians to give them tax breaks. We can and should have that conversation as well.
Federal income tax and payroll tax levels Under Reagan
Under Reagan – the wealthy actually did pay more (increased share) while the middle class paid less (a decreased share) – Since we are using the phrase ‘Pay their Fair Share’ so much.
During the Reagan administration, annual federal receipts grew from $618 billion to $991 billion (an increase of 60%); while outlays grew from $ 746 billion to $1144 billion (an increase of 53%). According to a 1996 report of the Joint Economic Committee of the United States Congress, during Reagan's two terms, and through 1993, the top 10% of taxpayers paid an increased share of income taxes (not including payroll taxes) to the Federal government, while the lowest 50% of taxpayers paid a reduced share of income tax revenue. Personal income tax revenues declined from 9.4% GDP in 1981 to 8.3% GDP in 1989, while payroll tax revenues increased from 6.0% GDP to 6.7% GDP during the same period. This represented a more regressive tax regime, with more revenue derived from the flat payroll tax versus the progressive income tax. (Translation – that is a good thing).
It is worth noting the ‘Total Federal Deficit (debt)’ did increase under Reagan as he tried to navigate out of the worst economy since the great depression. While this is similar to what is happening under Obama it is not the same because Reagan’s deficits was NOT due to long-term increases in spending. Rather, it was due to an attempt to maintain some needed federal programs while we waited for his policies to turn our economic ship – which it did with great success over his eight years in office. Maintaining programs while at the same time lowering tax rates and clearing away troublesome regulations, created temporary increases in total deficits. While the increase in Total Federal Debt under Obama is growing at the fastest rate in our history, it is not on a temporary continued growth trajectory – according to the CBO it is on a long-term and continual growth trajectory. Put another way, while Obama has dramatically increased short term spending with Stimulus – his policies will not (and provable are not), actually creating long-term job growth. This is why so many can say that four more years of Obama will with absolutely not fix our problems. (Please see the article titled – ‘President Obama, the Biggest Government Spender in World History” – Forbes).
ESSENTIALLY – we need to grow the breadth and width of the ‘Tax Base’ by putting people back to work. First and foremost that means getting leadership in Washington that will see the private sector as good and essential – leadership that will not antagonize the private sector and put fear into the private sector. Put more succinctly – we need a President and leaders who see the private sector as a greater source for answers to our economic problems than government.
I work in the private sector and in private sector finance. LISTEN CAREFULLY – I have hundreds of colleagues from Healthcare Finance, Banking, Consumer Credit, etc. I also serve as the V.P. of a Business to Business Professional Collaboration group in the greater Charlotte NC Metro Area. This group works with many different companies – Marketing, Telecommunications, Business Coaching, Managed IT Services, Architecture, Construction, Financial Planning, Human Resources, Recruiting - on and on.
HUNDREDS OF BUSINESS PEOPLE – NONE OF THEM HAVE SAID ANYTHING THAT INDICATES THEY ARE HAPPY WITH OBAMA’S POLICIES. Those who have spoken out (and it is a majority), have clearly said THEY FIND THE OBAMA ADMINISTRATIONS POLICIES AS HARMFUL.
To make it clear – we are quite simply at a place where we need some voters to change their mind from the 2008 election to the 2012 election. It’s time for Obama to go; and to bring to office someone better. No leader is perfect – but the Romney’s Ryan 5 Point Plan is nearly identical to the Reagan plan in the 1980’s. He is the first candidate I have seen in a decade or more who is promoting Reagan like Policies.
The rhetoric that has been coming from the DNC – that Romney / Ryan will gut programs; end Medicare, welfare, housing, etc. – THIS RHETORIC SIMPLY NOT TRUE. These are the very same fear tactics that were used in the Reagan Carter Election. These programs will be ‘Reformed’ and preserved and will become viable long term under the Romney Ryan plan. These men are not trying to destroy these programs – they are trying to protect and preserve them. THE MOST ESSSENTIAL WAY TO PROTECT AND PRESERVE these programs is to generate more tax dollars. Growing the TAX BASE - rather than increasing tax rates - has consistently generated more dollars than any other Federal Fiscal structure since the end of the Great Depression.
Please – Vote Conservative.
There is no true freedom without real economic freedom – and true economic freedom has only been at its best with limited government intrusions, combined with sound tax and spending policies, and reasonable government regulations in Washington.
We will put millions back to work – grow the tax base, reducing unemployment, reduce the number of people who need welfare or government assistance – and simultaneously increase funding for local, state and federal programs that we need to preserve and protect.
The Road to Freedom - How to Win the Fight for Free Enterprise; by Arthur C. Brooks
The American Enterprise Institute - http://www.aei.org/
For Countries who have actually followed these policy in very recent years.
5 Ways to get America Working Again
Understanding America - Why Does Economic Freedom Matter?
For a clear understanding and contrast between the policies of Reagan and Obama – and to make a judgment as to whether or not Obama’s policies have been or will be successful; here is a resource from Forbes.