Obama Sticks Knife Into Back of Economy

Discussion in 'Politics' started by pspr, May 16, 2013.

  1. pspr


    Per capita personal disposable income, adjusted for inflation, remains over $1,000 below its prior peak.

    There are 2.5 million fewer people employed now than in early 2008 while at the same time the U.S. population has grown by 12 million.

    What happened to economic growth?

    Typically when an economy comes out of a recession (the last one ended in June 2009) it will have several years of above-average growth, a snapback as it returns to longer run trend growth. That didn't happen this time. In the first 15 quarters of the current expansion, economic growth, after inflation, increased 8.3%.

    In the first 15 quarters of the prior three expansions economic growth, after inflation, increased on average by over 15%. This economic expansion has only been slightly more than half as fast as the average expansion. There are various factors holding it back.

    One is ObamaCare. Outgoing senator Max Baucus, who helped write ObamaCare, thinks its implementation may resemble a "train wreck."

    Too Many Dollars

    ObamaCare is holding back business formation and expansion as employers don't know what the cost will be or how it should be interpreted but are afraid as the IRS is involved.

    ObamaCare might have been conceived as a method to cover the uninsured, but it has ended up as an albatross for the entire economy and is slowing growth in the standard of living.

    Another policy holding back growth is the mind-numbing increase in gross federal outstanding debt from $10 trillion at end of 2008 to $16 trillion at the end of 2012, as shown in White House budget tables.

    Taxpayers regard bond-financed government spending as future tax liabilities and spend less, which acts to offset any positive effect that bond-financed government spending might have on increasing growth.

    The maximum possible return on that incremental increase in outstanding sovereign debt that anyone can muster is $0.25 for each dollar of deficit spending.

    The increase in sovereign debt has effectively been wasted at an enormous cost in future tax liabilities which holds back private sector growth. Yet the increase in deficit spending marches on.

    Another knife in the back of the U.S. economy is the astronomical increase in the money supply. The monetary base increased from approximately $850 billion in August 2008 to over $2.9 trillion in March 2013. This averages out to an increase in monetary base of over $37 billion per month.

    What has been the result? Slow growth.