This is an older post that we have purposely withheld to see where the fiscal cliff negotiations would end. As suspected, there was no cut in spending, just increased taxes for EVERYONE that works. Those who do not work, will not see their taxes go up, however, we are sure their benefits will! So the workers of this country get to pay more in taxes to support an ever growing underclass. This is not the America into which we were born!
In contrast to the title of this article, we are not glad that Obama won. If he only is President for another four years (we think he will be there for another 24), the damage done to the viability of this country will be so great, that it probably will never recover. One only has to look at the data in the article below to see that 75% of the employees hired since June 1 are government employees. Government employees contribute nothing to the economy, it is total drag. However, we expect that this will be the way of the future in the Obama Administration. We are not glad.
Conservative Tom
In contrast to the title of this article, we are not glad that Obama won. If he only is President for another four years (we think he will be there for another 24), the damage done to the viability of this country will be so great, that it probably will never recover. One only has to look at the data in the article below to see that 75% of the employees hired since June 1 are government employees. Government employees contribute nothing to the economy, it is total drag. However, we expect that this will be the way of the future in the Obama Administration. We are not glad.
Conservative Tom
Better Be Glad Obama Won
December 14, 2012 by Chip Wood
OFFICIAL WHITE HOUSE PHOTO BY PETE SOUZA
I’m beginning to think it doesn’t much matter whether this country plunges over the so-called fiscal cliff in two weeks. Regardless of whether Congress and the President reach some sort of accommodation over how much the “rich” will be taxed, a financial train wreck looks almost unavoidable.
Consider a few of the warning indicators that are flashing.
The Bureau of Labor Statistics just reported that 847,000 new jobs were created in the United States in the past six months. While that’s not enough to make a meaningful dent in the unemployment numbers, it’s at least a step in the right direction, right?
Not when you read the fine print in the BLS report. When you do, you’ll discover that73.3 percent of those new jobs are in government. That’s right; of all the new jobs created in the United States since June 1, the Labor Department says only one in four were in private enterprise. All of the rest are new government employees. No wonder government spending is going through the roof.
Speaking of government spending, in the first two months of Fiscal 2013 (which began Oct. 1), the Federal government spent $638 billion. But it collected only $346 billion in revenue. This means that it borrowed 46 cents for every dollar it disbursed.
Some of that money went to all the people who have been added to the food stamp rolls —more than 1 million in August and September alone. I haven’t seen the numbers for November yet, but I doubt if they’ll be much better. The Labor Department reports that some 350,000 people left the workforce last month — nearly three times the number who actually got jobs.
The short-term picture doesn’t look very good, does it? Well, I’m sorry to tell you that the longer-term picture is even more alarming.
The latest estimates from the Congressional Budget Office are that Federal deficit spending will surpass 100 percent of the gross domestic product of this country by 2025. And that it willdouble from there after another 12 years, reaching almost 200 percent of GDP by 2037.
But don’t worry about these astronomical levels of government spending. We’ll never reach them. Long before that can happen, the economy is going to crash. As former British Prime Minister Margaret Thatcher said: “Socialist governments traditionally do make a financial mess. They always run out of other people’s money.”
The Federal behemoth will run out of “other people’s money” long before it is gobbling up 200 percent of our GDP.
So what happens when the feathers hit the fan? What happens when unemployment soars and tax revenues fall? What happens when it becomes obvious to everyone and his brother that our massive entitlement programs can’t be sustained?
The Federal government won’t be able to borrow its way out of the mess it’s created. And it won’t be able to print its way out, either.
Oh, sure, for a while it will try to do both. That’s why I’m so certain that the dollar will continue to decline in value, while tangible assets (with gold and silver leading the list) will continue to climb.
But sooner or later, things are going to get really messy. And when they do, I hope there will be a massive repudiation of the tax-and-tax, spend-and-spend policies that brought us there.
Sadly, that’s not what happened during our last economic catastrophe. The Great Depression got blamed on capitalism. As a result, the country took a massive turn to the left under Franklin Roosevelt and his comrades.
But even the talking heads on MSNBC will have a hard time blaming the coming crisis on the right. When that day comes, conservatives should be very glad that Barrack Hussein Obama won re-election in November.
That’s why it’s so vital that we conservatives hold our ground, that we continue to defend and promote the principles we know are true and that we do everything in our power to explain the economic facts of life to our families, friends and neighbors.
At a time when the future looked even bleaker than it does today, George Washington said: “Let us raise a standard to which the wise and honest can repair; the rest is in the hands of God.”
That’s the best advice I can offer today to help sustain you in the difficult days that lay ahead.
Oh, and one more thing. Until next time, keep some powder dry.
–Chip Wood
ReplyDeleteThe June to November 621,000 increase in public sector employment needs to be viewed from the perspective of where it had fallen during the Great Recession….
"A notable aspect of the July employment report is the decline in public-sector employment. In fact, public-sector employment (i.e. federal, state, and local government jobs) declined in 10 of the past 12 months, in sharp contrast to 29 consecutive months of private-sector job growth. Indeed, falling public employment has been among the largest contributors to unemployment in the United States since the end of the Great Recession."
Public sector recovery has lagged private sector job growth. In fact, the private sector has steadily added jobs as the public sector declined. The private sector has added 5.1 million jobs since February, 2010.
Check their graph "Ratio of Government Employment to Population"….
http://www.brookings.edu/blogs/jobs/posts/2012/08/03-jobs-greenstone-looney
As you can see, from 1980 to 2000 the ratio averaged 9.6%. It was 9.7% for 2001-07. It dropped to 9.0% in the recession, which equals about 1.7 million fewer government jobs than if it had just stayed at the historical average of 9.6%. So, the 621,000 government jobs since June represents local, state, and federal government hiring back less than half of the jobs lost in the recession. I don't see how it is so bad that at least some of the teachers, police, fire fighters, etc. laid off in the recession are finally getting off unemployment compensation and returning to work.
--David
costs for government employees is higher than private industry. http://research.stlouisfed.org/fredgraph.png?g=9xe
ReplyDeleteWhat is your point? Do you want teachers and police working for $7.25 an hour like service sector workers at places like Wal-Mart or McDonald's?
ReplyDeleteHere is the larger issue...
"Recent debates about whether public- or private-sector workers earn more have obscured a larger truth: all workers have suffered from decades of stagnating wages despite large gains in productivity. The current public discussion illogically pits state and local government employees against private workers, when both groups have failed to sufficiently benefit from the economic fruits of their labors. This paper examines trends in the compensation of public (state and local government) and private-sector employees relative to the growth of productivity over the past two decades.
This paper finds:
• U.S. productivity grew by 62.5% from 1989 to 2010, far more than real hourly wages for both private-sector and state/local government workers, which grew 12% in the same period. Real hourly compensation grew a bit more (20.5% for state/local workers and 17.9% for private-sector workers) but still lagged far behind productivity growth.
• Wage stagnation has hit high school–educated workers harder than college graduates, although both groups have suffered—and a bit more so in the public sector. For example, from 1989 to 2010, real wages for high school-educated workers in the private sector grew by just 4.8%, compared with 2.6% in state government. During the same period, real wages for college graduates in the private sector grew 19.4%, compared with 9.5% in state government....The typical worker has had stagnating wages for a long time, despite enjoying some wage growth during the economic recovery of the late 1990s. While productivity grew 80% between 1979 and 2009, the hourly wage of the median worker grew by only 10.1%, with all of this wage growth occurring from 1996 to 2002, reflecting the strong economic recovery of the late 1990s."
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Pitting public sector against private sector wages diverts attention from these facts. Corporate profits hit a record high in 3rd quarter 2012 -- aided in large part by shipping jobs to China and keeping real wages stagnating in the U.S. That is what we ought to be talking about here. Even more specifically, the crooks who destroyed our economy (Wall Street) racked up $37 billion in profits last quarter (thanks to the trillions in virtually free money they get from the Federal Reserve to buy their toxic MBSs or giving them "money for nothing" to buy U.S. Treasuries and pocket the interest rate difference at zero risk. Hey, give Tom and me some of that money and we'd be instant multi-millionaires!
--David
David, you know that is a red herring to insist that teachers and police should be paid $7.50 per hour.
ReplyDeleteWe have too many government employees because our government is too big, that is the real issue. We can argue about profits, but the government does not even contribute one centella to the taxes, except for employee taxes. At least the private sector (except Obama friends like GE) pay taxes.
Even those evil Wall Street guys pay taxes. None are paid by government.
As far as money going to Wall Street from government--you know we are completely against that. No bailouts, let the chips fall where they might.
Red herring? You brought up the subject, saying "costs for government employees is higher than private industry." What costs? I was asking, "How much would you like to lower public sector wages to get them as low as private sector wages?" As noted, wages in both sectors have lagged far behind productivity and corporate profits for decades.
ReplyDeleteYou say, "We have too many government employees because our government is too big, that is the real issue."
"Too big" relative to what? The private sector is 134 million employees, and the public sector is 22 million (which is still less than it was a year ago). Do you want to keep all the teachers, police, firefighters, etc. who were laid off in the recession unemployed? Why? As the article states, 261,000 of them have been able since June to get off unemployment and get back to work. Why is that worse than keeping them on unemployment rolls? I don't see the logic.
Let's break down the 22 million government employees…
Local government = 14 million (64% of all government workers)
State government= 5 million (23% of all government workers)
Federal government= 2.8 million (13% of all government workers)
Is it your argument that public sector workers in education, law enforcement, public transportation, etc. are not providing any valuable service to society? Or is that cities and states have too many of them? How so? The ratio public sector employees to population is the lowest in 30 years (9.0%) because of the Great Recession, and most of them remain unemployed.
You wrote, "…the government does not even contribute one centella to the taxes, except for employee taxes."
This is an odd statement. Private and public sector employees both pay taxes. I might add, they both collect unemployment and add to the deficit when they are unemployed. Naturally, the government does not pay taxes to itself. That would be as pointless as transferring money from your right pocket to your left pocket. However, government does pay wages to public employees who pay taxes. To that extent, some of the revenue paid out comes back full circle to government in taxes. Government also pays TRILLIONS to the evil Wall Street guys (and other corporate subsidies to oil companies, etc,), and some of that comes back in taxes.
--David