In 1992, the Nation was recovering from a recession. Few believed it was over, though the experts said it was. The question asked of voters was: "Are you better off now than you were 4 years ago. Statistically, the answer was yes. Wages had grown 21% on top of the 35% they had grown under Reagan. 6.5 Million jobs had been added to the 7.1 Million added under Reagan, but it didn't feel like things were getting better. Inflation had eaten up the increases in income, not by much, but by enough.
In 2012, we face an era of growing inflation. The effects of the first round of Quantitative Easing are reaching the economy. It's a fancy way of saying the Government started printing money. It's a typical 3rd World way of paying interest on the debt of the government, and nearly always results in inflation. If there were only $500,000 in print, you'd have to work many weeks to earn a dollar. If we tripled the number of dollars in print, you'd need to earn (and likely would) $100+k a year, and still not be able to buy as much.
Inflation has already reduced the value of your money by 8.64% (cumulative inflation rate since Jan 2009, excluding the cost of gas). If you made $38,376/year in 2008, you would need to make $41,692/year today, just to break even, before you pay for gas to get to work. If you drive the typical 15,000 miles/year at 25 miles per gallon, the increase in gasoline alone costs you an additional $1,470/year due to an increase of the price $2.45 per gallon. Since that's not included in inflation calculations, you would need to make $43,162/year to equal an income of $38,376 in 2008.
According to the Bureau of Labor Statistics, there are 5.5 Million fewer people working now than in December 2008. There are 4.8 Million more in the unemployment lines than in 2008. And yet, the Administration is telling us that it added 4 Million jobs to the economy and that the unemployment rate is going down. How could that be? Despite an increase in 5.8 Million in working age Americans, 6.5 Million are no longer counted as being in the Labor Force. They've been looking for work for so long that they either gave up, or the government quit counting them. The net result: 670,000 fewer Americans are counted as being part of the labor pool, despite increases in those that should have a job. Of working age adults, 1.9% fewer people are working than in 2008.
Unemployment has hit Veterans particularly hard, and the Administration is asking Congress to throw another 100,000 Troops into the unemployment lines. This is added to the 100,000 workers laid off in the F-22 program alone. It doesn't include how many other workers have lost their jobs when other equipment such as ships and planes and armored vehicles were cancelled.
The Department of Defense budget has been slashed under the current Administration, and yet the Federal Deficit is triple the records set in 2008. More than 1/3 of the current Federal Debt has been added since the last inauguration. It took 232 years for the other $10 Trillion in debt to be accumulated. The annual deficit now exceeds the first 207 years of accumulated debt, incurred during a Civil War, the War for Independence, two World Wars, and numerous "small wars."
In deflecting attention to the gravity of the debt, many will say that there was more overall debt in 1946 than today. In 1946, after World War II, there was $268.9 Billion in Federal Debt. Adjusted for inflation, that would be $2.6 Trillion in 2008 and $2.8 Trillion in 2011. In inflation adjusted dollars, the debt today is $12.6 Trillion more than after this Nation had borne the burden of fighting World War II. The unemployment rate was 1.9% in 1946, but the percentage of spending on war and the Military is far below that of 1946.
The Administration blames the Bush tax cuts for a deficit that the current Administration put in place, but from 1998 to 2008, revenue from Income taxes grew 29.7%, by $371 Billion, Corporate Income Tax grew by 41.6%, or $130.9 Billion, and Social Security taxes grew by $316.2 Billion or 34.1% indicating that those making less than $90,000/year saw greater increases in income, percentage wise, than those above that amount.
All told, the Federal Government had $840.8 Billion more money to spend at the end of 2008, than at the end of 1998. It has $737 Billion more to spend now than it did when the Gingrich Congress balanced the budget with Clinton (though the Federal Debt was still there) in 1998. Even adjusted for inflation, that's $13.39 Billion more. Adjusted for inflation, there was $291.7 Billion more in tax revenue in 2008 than in 1998. In other words, the Bush tax cuts resulted in increased tax revenue, while the Obama spending increases have resulted in increased inflation and Federal deficits, as well as fewer jobs.
The current Administration has increased taxes in non-transparent ways. It hasn't managed to raise income taxes, but it has raised excise taxes and corporate taxes. Still, the revenue from Income Tax has decreased by $109 Billion or 8.7% and Social Security tax revenue has decreased by .2%, because American Workers are making less money, even at the inflated rate, and hence fewer are paying less income tax.
But the problem isn't that the Administration has managed to decrease tax revenue, while increasing taxes on doing business. It is that they've also increased spending on everything but the National Defense & Veterans. It has increased spending by $737 Billion while decreasing Federal Revenue by $103.8 Billion, just since 2009. That's the problem with spending money like a drunken college student with daddy's credit card while throwing Americans into the unemployment lines.
Ronald Reagan once said: "A recession is when your neighbor loses his job. A depression is when you lose your job. And a recovery is when the President loses his job."
Americans seem to be more self-centered than at any time during my life. Today, they complain that jobs are moving to China, while buying the cheaply made, lead painted trinkets Chinese serfs put together at a few bucks an hour, failing to realize that they are directly contributing to that migration of jobs to China, since they aren't buying products made by their neighbors.
The Administration hails itself for the recovery of the "Big 3" though it sold Chrysler to the Italians, lost money, and the combination of an earthquake and tsunami knocked Japanese auto production down several notches. The recovery of the "Big 3," an American Auto company (Ford), a government auto company (GM), and an Italian Auto company (Fiat-Chrysler) can be attributed to catastrophe knocking out Japanese production more than it can to anything the government did. Consumers had a (temporary) choice of buying from the Big 3 or delaying the car purchase.
When I've discussed the Buffett tax on Military Retirees, i.e. the Obama Plan to tax Military Retirees (less than 1% of Our Nation) and Troops(less than 1% of Our Nation), with fees on retirement benefits and inflation based pay cuts, with those that will be unaffected, they seem uncaring. While the Buffett tax is marketed as a tax on the rich, it's primary source of new taxes are Military Retirees, Farmers(less than 2% of Our Nation), and the Elderly. When the Occupy Movement claims they are the 99%, they may be referring to not being Farmers or Veterans or Troops, rather than not being the 1% top wage earners, since they count so many of the 1% wage earners in their numbers, like George Soros, Michael Moore, and so many others of Hollywood, as well as people like Nancy Pelosi, whose wealth has accumulated by Millions more than the rate of inflation.
Many seem more concerned with forcing religious organizations to pay for insurance coverage for things the Church believes to be a sin, than protecting the contract their government made to their Troops. So many seem more concerned with eventually getting "free" health insurance, than with honoring the contract they made through their politicians with the Troops. Many seem more interested in the latest antics of Hollywood stars, than the malfeasance of the politicians they elected. Too many in America today, seem to have an attitude of "I got mine," until it is theirs that is taken away. When their cry for help goes out, they then seem surprised it is as unheard as when they didn't hear the cry of others.
But pull out your 2008 tax return. Multiply your 2008 income by 1.0864, add $1470 to that and find out for yourself if you're better off than you were 3 years ago. And realize, that the first round of Quantitative Easing (printing money) is just beginning to effect the inflation rate. You're going to need to get some raises to match the inflation storm that is coming. If you're an average driver with an average car making an average wage, you're now working 3 weeks a year just to drive, mostly to work, to pay the taxes on your income. As inflation rises, the costs of necessities always rises before the wages paid to workers. As inflation lags a couple of years behind the printing of money, the effects of "Quantitative Easing" will continue into the next presidential term.
Are YOU better off than you were 3 years ago?
Stumble It!
