The American worker is in desperate need of help — and Barack Obama has turned a deaf ear.
On Friday, the Bureau of Labor Statistics published the December jobs report, finding that headline unemployment remained “unchanged” at 10 percent as the economy lost another 85,000 jobs.
Beneath this misleading gauge, however, one finds that the number of workers who are so discouraged that they have simply stopped looking for jobs continues to rise as U-6 unemployment rose from 17.2 to 17.3 percent for December.
The U-6 indicator is “Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.” Out of a universe of 156 million (civilian labor + marginally attached), that’s 26.9 million Americans out of work.
Unfazed, Barack Obama hurried out to the cameras on Friday proclaiming that the “road to recovery is never straight” — in spite of his White House projecting that unemployment would stay below 8 percent if his $787 billion “stimulus” plan passed.
It did not, and yet Obama acted as if his Keynesian scheme would create a direct path to recovery. To boot, Obama’s prized bill, H.R. 1, was called the “American Recovery and Reinvestment Act of 2009”.
With millions of more jobs lost since the bill’s passage, Congress is now pushing for yet another “stimulus”: $154 billion from recovered Troubled Asset Relief Program (TARP) funds to bail out bankrupt states and public employees unions. This new $154 billion bill includes $48.3 billion in funds for highway construction unions and other infrastructure (i.e. union-mandated) spending and another $23 billion for public education unions.
Of note, the $787 billion version also contained $53.6 billion to bail out state and local governments, although it did not work. States are still facing unprecedented fiscal crises after growing government too much during the boom years.
Really, the Obama “stimulus” has not done a thing to make it more attractive to invest in the U.S. economy. The dollar was hammered in 2009, and with the national debt set to equal 100 percent of the Gross Domestic Product (GDP) in 2011 at more than $14 trillion, the value of profits will only decline over the coming decade as inflation inevitably kicks in.
Making matters worse, taxes are set to automatically rise in 2011 after the Bush-era, supply-side tax cuts sunset.
Congress could interdict what is certain to be a flight of capital from markets by making permanent the tax cuts of 2001 and 2003. As noted by the Heritage Foundation, if Congress does not act,
- “Tax rates will rise substantially in each tax bracket, some by 450 basis points;
- “Low-income taxpayers will see the 10-percent tax bracket disappear, and they will have to pay taxes at the 15-percent rate;
- “Married taxpayers will see the marriage penalty return;
- “Taxpayers with children will lose 50 percent of their child tax credits;
- “Taxes on dividends will increase beginning on January 1, 2009;
- “Taxes on capital gains will increase, also beginning on January 1, 2009; and
- “Federal death taxes will come back to life in 2011, after fading down to nothing in 2010.”
Instead of being obsessively focused on solidifying government control over the health care, energy, and mortgage industries, it is time for the Obama Administration and Congress to focus on creating jobs. It can start by letting businesses know there will not be penalties for profits in 2011, and by bringing out-of-control spending in Washington under control and restoring confidence in the U.S. dollar.
In short, it is time for Barack Obama to hear the pleas of those whose jobs he has destroyed.
