By Scott W. Winchell and Denise Simon – Last Friday, the Bureau of Labor Statistics released the March ‘joblessness‘ report. It showed that the unemployment rate dropped as 140,000 new jobs were created. That in and of itself is curious, since in February, the rate stayed the same, but almost twice as many jobs were filled. Funny thing statistics…if they do not include certain data, what good is the report?
Now, we see four other factors or ‘strikes’ are indicating that the so-called recovery is also bunk.
Strike 1 -Recovery? What Recovery? Over 4 years after central banks have progressively injected over $7 trillion in liquidity into the global markets (and thus, by Fed logic, the economy), and who knows how many trillion in fiscal aid has been misallocated, to halt the Second Great Depression which officially started in December 2007, the US “recovery” is the weakest in modern US history! How many more trillions will have to be printed (and monetized) before the central planners realize that fighting mean reversion by using debt to defeat recore debt, just doesnt’t work? Our guess – lots.
Why? Because the United States credit score was just downgraded, again.
Strike 2 – Credit rating agency Egan Jones downgraded the United States Thursday on concern over the sustainability of public debt. Egan Jones is one of the most important ratings firms in the world; they lowered our credit level from AA+ to AA. The firm reduced America from AAA to AA+ in July 2011, just before Standard & Poor’s did the same.
On top of this, GDP is now surpassed by our debt. That’s right, the total products and services created of the USA in one year is less than its debt. We now owe more than we are worth on an annual basis.
Strike 3 – According to many analysts, the United States now faces a debt as big as the nation’s entire economic output for a year. That means it would take every American dollar produced in an entire year to just barely pay off the current debt.
“The consequences are grave moving forward because not only is the debt high, but according to the Congressional Budget Office and all the experts who are looking at it, there’s no plan in place to change that any time in the near future,” Sen. Marco Rubio, R-Fla., said.
Now, another impending slice of the pie of doom approaches – “Taxmageddon”!
Strike 4 – “Taxmageddon is a $494 billion tax increase that strikes at the beginning of 2013,” Dubay writes in his report. “Under current law, tax policies in seven different categories will expire, and five of the 18 new tax hikes from Obamacare will begin.”
That is four more strikes… Credit rating drop, no recovery, Debt vs. GDP, and Taxmageddon – how many more does Obama get? Five, six…hundreds?
Then today, the stock market dropped 130 points as news the job market is not responding and the Friday report was very “disappointing“, and likely will get worse…came out on the floor of the NYSE.
Wait….that’s five more strikes, in four days since the job report was released alone… Six strikes in all! SUA thinks the umpire just shouted the call; “You’re outta here..!”
UPDATE – 6:21 PM PDT
Here’s another strike:
Amid disappointing unemployment numbers that fell 80,000 jobs short of projections, another number is raising eyebrows: the number of Americans not in the labor force has hit a record high 87,897,000.
This figure explains why overall unemployment dropped from 8.3% to 8.2%, as the Department of Labor’s unemployment figure does not include people who have given up hope and are not actively seeking employment.
See six other disastrous economic facts here.
By William Bigelow – Big Government
Credit rating agency Egan Jones downgraded the United States Thursday on concern over the sustainability of public debt. Egan Jones is one of the most important ratings firms in the world; they lowered our credit level from AA+ to AA. The firm reduced America from AAA to AA+ in July 2011, just before Standard & Poor’s did the same.
Egan Jones warned. “Without some structural changes soon, restoring credit quality will become increasingly difficult . . . without some structural changes soon, restoring credit quality will become increasingly difficult.” They added that there was a 1.2% probability of U.S default in the next 12 months. The company cited the fact that the US’s total debt, which now equals its total GDP, is rising and soon will eclipse the national GDP; the company sees the debt rising to 112% of the GDP by 2014.
The debt grew 23.6% the first two years of Obama’s presidency. When the debt is more than 100% of the GDP, treasury notes fall, which is a problem because they are used for transactions between financial institutions. This, in turn, could raise rates on mortgages and other loans, which would discourage growth in the economy, as well as state and local governments feeling the pinch, which could eliminate more services.
Paul Ryan has offered a debt reduction plan which would reduce the current six federal income tax rates to just 2 — 10% and 25%. His plan would also reduce the federal corporate income tax rate from 35% to 25%, the same rate as the international average. Because of the additional revenue accrued from economic growth as a result of the tax reductions, federal revenues could double over the next 10 years; the added revenue would be more than the entire GDP of almost every other country in the world.
Meanwhile, President Obama continues to vilify Ryan’s ideas, saying they are, “a Trojan horse, disguised as deficit-reduction plans . . . thinly veiled social Darwinism.” And White House projections show the federal debt’s ratio to gross domestic product growing to a record 124 percent in 2050 under Obama’s plan.
Obama’s malfeaseance or Ryan’s responsibility? If the country is to survive, it’s not hard to choose.