by Daniel Gardner
How bad is the U.S. economy and outlook? Brace yourself!
Overall unemployment rate in the U.S. is 7.6 percent, essentially the same as when President Obama assumed office in January 2009 (7.8 percent). Perhaps a more realistic figure is the U6 rate that includes those working part-time who want to work full time: currently 14.3 percent. In other words, lots of folks working part-time who want to work full time.
The labor force participation rate is 63.5 percent, down from 65.7 percent in January 2009, and we haven't seen such low numbers since the late 1970s under President Carter's failed economic policies.
According to Sentier Research analysis of Labor Department data as reported in the New York Times: "February's median annual household income was 5.6 percent lower than it was in June 2009, the month the recovery technically began; 7.3 percent lower than in December 2007, when the most recent recession officially started; and 8.4 percent lower than in January 2000, the earliest date that this statistical series became available." In other words, we've been making less and less money since 2000.
Couple these low numbers with another high number, inflation, and we learn that something that cost $20 in 2000 costs $27.12 today, a cumulative rate of 35.6 percent inflation. And, we're not even talking about how much gasoline and groceries have gone up since these costs are not included in the government's calculation of inflation.
Federal spending continues to grow the size of government. We're approaching the $17 trillion debt limit, and continue to spend record amounts of deficits every year. Meanwhile our economy continues to limp along at 1.8 percent for the first quarter of 2013. In other words, our economy is not growing enough to produce jobs or higher income and the government is broke.
Have you heard about Detroit kicking the can down the road for the past 40 years? The city finally ran out of credit (other people's money) and their bills came due. Detroit declared bankruptcy. About half of their bills are pension payments due to retired city workers. Some estimate retired city workers in Detroit could see their monthly pension checks cut in half.
The federal government has been following the same fiscal policies as Detroit. What happens when those who lend money to Uncle Sam say "no more"? What happens in a society when those depending on pension checks see severe cuts in those checks?
Unfortunately, some among us believe Uncle Sam can continue to give "free money" to recipients without facing any consequences. Uncle Sam cannot give "free money" to anyone without taking it from someone else or borrowing it.
While the mainstream media are swamping the airwaves and newspapers with questions of racial profiling, the rest of us are dealing with trying to pay our own bills every day with less money, and Washington continues to play political shell games spending more and more "free money" to garner votes for reelection.
Brace yourself. The bills are coming due and we're out of credit.