Tag Archives: political parties

Our Economic Recovery

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The Congressional Budget Office had some remarks last Thursday.

More than four and a half years after the end of the recession, employment has risen sluggishly—much more slowly than it grew, on average, during the four previous recoveries that lasted more than one year.  At the same time, the unemployment rate has fallen only partway back to its prerecession level…and a significant part of that improvement is attributable to a decline in labor force participation that has occurred as an unusually large number of people have stopped looking for work….  Moreover, the rate of long-term unemployment—the percentage of the labor force that has been out of work for more than 26 consecutive weeks—remains extraordinarily high.

And

CBO estimates that GDP was 7½% smaller than potential (maximum sustainable) GDP at the end of the recession; by the end of 2013, less than one-half of that gap had been closed.  With output growing so slowly, payrolls have increased slowly as well—and the slack in the labor market that can be seen in the elevated unemployment rate and in part of the reduction in the rate of labor force participation mirrors the gap between actual and potential GDP.

And [emphasis in the original]

Employment at the end of 2013 was about 6 million jobs short of where it would be if the unemployment rate had returned to its prerecession level and if the participation rate had risen to the level it would have attained without the current cyclical weakness. Those factors account roughly equally for the shortfall.

Any questions about the effectiveness of the Obama administration’s economic policies?

Defense Cut “Drivers”

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Here are a couple of types of spending increases that will appear in upcoming Federal budgets:

[A] CBO report finds that mandatory spending, which includes Social Security, Medicare, and Medicaid, is projected to rise $85 billion, or 4%….

And

Interest on the debt is worse.  It is projected to increase 14% per year, almost quadrupling in dollar terms between 2014 and 2024.

DoD Secretary Chuck Hagel’s proposed budget cuts Defense spending by $75 billion over the next two years.

The “mandatory” spending problem could be cured over those same two years, with a proper reform package.

From $416 billion in interest payments in 2013, that 14% increase for 2014 comes to $58 billion; for 2015, the first year of President Barack Obama’s budget proposal (which includes that “mandatory” spending and Hagel’s cuts in the Defense budget), that interest payment increase comes to $65 billion.

Our debt debacle, with its required interest payments, will take considerably longer than two years to redress, and that puts a premium on getting started now on the necessary spending cuts.  This is made even more difficult, though, by the enormous size of our debt coupled with the national survival need to preserve our military capacity.

But the Democrats won’t allow entitlement reform in any direction except expansion—and more spending.  And they refuse to take our debt seriously, demanding ever more (non-defense) spending, and not just for the “mandatory” stuff.  Go figure.

Are We Retreating from Engagement?

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William Kristol in The Weekly Standard:

Kiev is ablaze.  Syria is a killing field.  The Iranian mullahs aren’t giving up their nuclear weapons capability, and other regimes in the Middle East are preparing to acquire their own.  Al Qaeda is making gains and is probably stronger than ever.  China and Russia throw their weight around, while our allies shudder and squabble.
…
Having withdrawn from Iraq, and seeing it now fall apart, the administration is nonetheless determined to get out of Afghanistan.  Its Russia “reset” is a joke, and its “pivot to Asia” an empty slogan.  Secretary of State John Kerry huffed and puffed when Bashar al-Assad used chemical weapons last year, and asserted it was a Munich moment.  How right he was! Kerry came back brandishing a piece of paper, and Assad remains in power.

Indeed.  But it’s OK, because—look! Shiny!

Kerry now says that global climate change may be the weapon of mass destruction we should most fear.

It’s going to be a hard two years.  And it’s going to be harder, for many more than just two, repairing the damage.

Susan Rice…Has No Regrets

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Susan Rice, currently President Barack Obama’s National Security Advisor, said this on Sunday to NBC Meet the Press‘ David Gregory:

[W]hat I said to you that morning, and what I did every day since, was to share the best information that we had at the time.  The information I provided, which I explained to you, was what we had at the moment.  It could change.  I commented that this was based on what we knew on that morning ….

Compare that with this transcript of a conference call in which a State Department official described real-time reporting of the events in Benghazi by folks present in and during the attack.

State knew the truth in real-time, as that transcript demonstrates.  And Susan Rice, then State’s Ambassador to the UN, surely knew, also, at least by the time she went on those Sunday talk shows a week after the attack and murders.  She knew at the least because she was, and is, a highly intelligent, dedicated woman who would have moved to corroborate the talking points she was given and not simply have parroted them.  She knew because, of course, State would have passed along the above transcript for her review before sending her out on the talk tour.

Minimum Wage and Collateral Damage

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The CBO, the other day, looked into the Democrats’ proposal—demand, really—to raise the Federal minimum wage to $10.10 from the present level of $7.25 per hour.

The CBO found two key outcomes from such a hike.  The first is that the increase is almost certain to cost jobs, to increase unemployment.  While acknowledging that the headline number of jobs lost—500,000—is only an estimate, the CBO said quite clearly that the range of the number of jobs that will be lost from this forced wage increase runs from a “very slight decrease” in jobs to 1 million jobs lost.  Notice that.  No increase at all in job availability will ensue.  A “very slight decrease” in jobs is a decrease in jobs.  Full stop.

The other key finding is this: the

increase to $10.10 an hour by July 2016 would eliminate 500,000 jobs, but lift 900,000 Americans out of poverty from the total of 45 million projected to be living in poverty in 2016.

900,000 Americans will be able to use the wage increase to climb out of poverty.  But 500,000 Americans will be forever locked out of that opportunity, will be sacrificed in favor of those others.  Low-wage jobs—minimum wage jobs—are low skilled jobs, are entry level jobs, in which the worker can accrue experience with which to earn promotion, gain needed skills for better jobs, bring extra money home to the family so the family as a whole can have a chance to climb out of poverty.  These jobs are how teenagers, just starting out, can begin to learn a work ethic, can start earning some money for college or for a car, or just earn some walking around money.

These folks, though, apparently are just necessary collateral damage on the way to equal outcomes for the survivors.

So much for equality of opportunity.

The CBO’s full report can be seen here.