Commentary by James Shott
Even though the recession officially ended in June of 2009, America’s economy continues to languish:
- The national debt will have grown from $10.7 trillion at the end of 2008 to $15.8 trillion by the end of 2012 – that’s about $51,000 for every American citizen (adults and children) – and will exceed total Gross Domestic Product for the first time in the nation’s history.
- Of every dollar the federal government spends, 40 cents is borrowed.
- The unemployment rate has been above 8 percent since February of 2009.
- As of this July 13.4 million Americans were unemployed, and nearly 21 million others were underemployed or have given up looking for work, about 22 percent of the workforce, altogether.
- At July's rate of job growth – 163,000 new jobs – it would take more than eight years to get back to full employment.
- Gross Domestic Product was negative for several months and has been mostly 1.0 to 2.5 percent for the last three years. In only two of the last 13 quarters has GDP been what is regarded as relatively strong growth of 4 percent or more.
- The United States’ economic freedom score of 76.3 puts it in 10th place in the 2012 Index. Its score is 1.5 points lower than last year, reflecting deteriorating scores for government spending, freedom from corruption, and investment freedom. The U.S. is among 23 countries rated “mostly free.”
- Social Security owes $11.3 trillion more in benefits than it will receive in taxes. That includes $2.7 trillion to repay special-issue bonds and $6.5 trillion for benefits after the trust fund is exhausted in 2033. That is an increase of $2.2 trillion from last year’s report, and is the largest one-year drop in the program’s finances in nearly two decades. The system ran a deficit for 2011 of $11.5 billion.
- The U.S. Senate has not acted on proposed budgets in over three years.
- One of every three Americans – more than 100 million of us – receives some form of support from the government, and nearly half of American workers pay nothing to support the federal government.
In 1992, when Bill Clinton was running for president against incumbent George H.W. Bush in a much stronger economy than we have today, the major focus of Democrats was, “It’s the economy, stupid.” That is not their focus today. Mitt Romney’s tax returns are far more important to them.
If you are one of those wondering about Mr. Romney’s tax returns, ask yourself this question: If the tax laws are written to encourage people to do certain things that limit their tax liability through deductions or credits (such as charitable contributions), and if a high earner like Mitt Romney does some or all of those things the tax laws encourage taxpayers to do, and by doing those thing he pays little or no taxes to the federal government, why should anyone be concerned about that, or try to make Mitt Romney out to be some sort of un-American tax-dodger?
The answer, of course, is that Democrat’s record provides nothing for them to talk about. They have made little if any progress against the nation’s substantial economic problems.
Actually, if it was just that Democrat policies haven’t improved things, we would be better off than we are. But Democrat policies have made things worse, and more bad news is on the horizon.
A July survey by the National Federation of Independent Business revealed that the top three concerns of small businesses were taxes, regulations, and poor sales. These concerns pose a significant problem, because small businesses are America’s job creators, the engine of the American economy. The Small Business Administration estimates that small businesses create about 65 percent of the nation's net new jobs, or jobs created minus jobs eliminated.
There are 1.2 million small businesses that employ workers and make more than $200,000 a year, and which pay taxes as individuals. The expiration of the “Bush tax cuts” raises their taxes and Ernst & Young estimates that more than 700,000 jobs will be lost.
The Heritage Foundation reports that "During the first three years of the Obama Administration, 106 new major federal regulations added more than $46 billion per year in new costs for Americans. Hundreds more regulations are winding through the rulemaking pipeline as a consequence of the Dodd–Frank financial-regulation law, the Patient Protection and Affordable Care Act, and the Environmental Protection Agency's global warming crusade, threatening to further weaken an anemic economy and job creation."
Businesses are also suffering from reduced sales, since so many people are out of work, and further impacted by rising fuel prices. This forces businesses either to raise prices to recoup the additional costs, which further discourages sales, or to absorb the costs, affecting profitability. Higher costs discourage hiring, and lower profits put businesses at risk of closing.
But let’s not let these dire circumstances cause us to take our eye off the ball. As the election approaches, we have to focus on Mitt Romney’s tax returns and other similar less significant things than the horrible economic and jobs pictures.
Cross-posted from Observations