Sunday, November 25, 2012
Employment Level Growth Lowest Since Great Depression
Note: I wrote this before the election. Still there are things here worth your consideration.
Very, very interesting. This chart is from the Bureau of Labor Statistics. It's very bad news for Obama. If Obama hadn't been so unfriendly to businesses by increasing regulatory burdens, he would have higher growth than Bush. Plus he didn't decrease spending, which has a dragging effect upon the economy. I find it telling that the times of Big Government (compared spending to GDP growth rates) is the time of lowest growth. Post WWII with Eisenhower doesn't hardly compare to the past 12 years of rapid growth in government. The only reason that Clinton isn't sandwiched between the two Bushes is that Gingrich forced him to balance the budget, thus limiting the growth of government, as seen in the next chart below.
Yes, government spending does have that much of a drain on the overall health of the economy, not that this paints the whole picture since it doesn't reflect the tax rates and regulatory burdens on businesses and individuals. I do also find it interesting that the Iraq and Afghan wars haven't made as nearly as big of a bump in government spending as WWII and WWI, though they do seem big relative to Vietnam and Korea. I also find it interesting that lowering tax rates alone doesn't necessarily predict economic growth: it must be coupled with decreases in government spending - which are very rare. Meaning we haven't experienced the kind of growth we could otherwise. This translates into personal incomes in decline.
As a reminder, the Congressional Budget Reform Act of 1974 basically ensured that government spending would never again stagnant from year to year. Ever since then, federal budgets have automatically increased annually regardless of necessity or revenue, by as much as 10%. Any talk of cutting those automatic increase rates in federal budgets have Democrats crying "Draconian cuts!" even though the departments would still have more money than the year before.
Now, some other correlating charts about growth: Government continues growing and spending our money which they do not have (last chart), and total spending is looking exponential (second to last chart) - a really bad sign that a collapse is inevitable unless we change course. And of course, the chart immediately below shows our growth is suffering. I know there are those that argue that government spending is not the cause of lower growth, but I think they're related, as well as the regulatory and tax burdens upon individuals and businesses.
The rate of spending is high enough that taxing individuals and businesses at 100% (leaving nothing left over for reinvestment and growth) doesn't solve our total federal deficit. Spending cuts are the only answer. That is what real "austerity" measures mean: not tax increases, which still don't solve the spending problems - as is all too evident in Europe. This is what the Tea Party stands for: fiscal responsibility. Why demonize that, leftists?