Liberals NEVER think of the consequences of their actions. They live in a fantasy land. I want them to answer the following charge.
Tuesday, July 27th at 5:00AM EDT
A lot of the media and all of the Democrats seem to forget one simple fact about the Bush tax cuts: they were passed in response to a recession occurring as George W. Bush and Dick Cheney entered office.
Moe Lane wrote an excellent post about the impact of the Democrats not extending the Bush tax cuts, but what about what they actually did.
We should not forget that.
The 2001 Economic Growth and Recovery Tax Act was George Bush’s version of Barack Obama’s stimulus plan. However, instead of creating a bunch of temporary government jobs and subsidizing the expansion of government, it cut tax rates, increased the child tax credit, increased the standard deduction for married couples, and increasing contribution caps for a variety of savings programs. The result? The recession ended in November of 2001. (Source)
But, September 11, 2001, happened as the economy was recovering and throughout 2002, the economy grew at an anemic rate. The Jobs and Growth Tax Relief Reconciliation Act of 2003 revved up the 2001 tax cut package and cut taxes again on dividends and capital gains.
Under George W. Bush’s “tax cuts for the rich” the rich paid more in taxes in 2005 than any time in the prior 20 years. In fact, as the Wall Street Journal noted, thanks to George W. Bush’s tax cuts for the rich, the richest one percent went from paying 25% of all income taxes in 1990 to 39% in 2005. The richest 5% went from paying 44% of all income taxes in 1990 to paying 60% of all income taxes in 2005.
In 1980, when the top income tax rate was 70%, the richest 1% paid only 19% of all income taxes; now, with a top rate of 35%, they pay more than double that share.
More crucially, after the 2001 initial tax cuts, the annual growth rate went from 0.3% in 2001 to 2.5% in 2002. By 2004, GDP growth was the highest in 20 years. (Source)
Likewise, after the 2003 tax cuts, the unemployment rate fell to the lowest level since World War II. Let me repeat that: the Bush economic program created the lowest unemployment level ever. In fact, economists liken it to full employment given the demographic composition of those who were left on the unemployment line.
Why then the collapse? There are lots of reasons for the collapse. For one thing, contrary to what economists would have you believe, they are not scientists and the economy is not a science. There have been upturns and downturns in the economy since economies first developed several millennia ago. But also, massive new regulations in Sarbanes-Oxley and the continuing incursion of the government via Fannie and Freddie into private lending markets forcing private lenders to launch even riskier ventures to stay profitable led to a lot of schemes collapsing in on themselves and taking the economy out too.
That has nothing to do with the Bush tax cuts. The Bush tax cuts, objectively, helped the economy both recovery from the 2000-2001 recession and spur some of the greatest economic activity the nation has ever seen.
In their efforts to end the Bush tax cuts during a prolonged recession, the Democrats risk making the economy worse and introducing greater uncertainty into the market.
July 26, 2010, Vol. 15, No. 42
Last month, we published an editorial under the title “A Period of Consequences.” The phrase was taken from a speech in the House of Commons in late 1936 in which Winston Churchill warned: “The era of procrastination, of half-measures, of soothing and baffling expedients, of delays is coming to its close. In its place we are entering a period of consequences.”
In the editorial, we lamented the procrastination, half-measures, soothing and baffling expedients, and delays that have characterized U.S. policy toward Iran’s nuclear program. We argued that U.S. military action to stop the program was preferable to a nuclear Iran, and urged the Obama administration to keep open (and plan for) the possibility of such action. Reuel Marc Gerecht makes the case in our pages this week that an Israeli strike would also be better than no strike at all. This is certainly the case. Still, American action is preferable, and desirable.
But looking at the world in the summer of 2010, we’re struck that we have entered a period of consequences on many more fronts than just the Iranian nuclear program. Churchill’s words seem to capture all too many aspects of the present moment.
- We’ve been living beyond our means and have failed to come to grips with the problem. The financial crisis has been followed by an irresponsible “stimulus” package that has meant the assumption of more debt, and a financial regulation bill that doesn’t address our core financial problems. A European sovereign debt crisis is bearing down on us as the global economic recovery falters, and our fiscal and monetary policy instruments seem exhausted. Now we are entering a period of consequences that will require an end to procrastination, and that will necessitate both difficult short-term choices, and a fundamental rethinking of a host of government programs and the very structure of our fiscal and monetary policies.
- We’ve allowed—nay, in many cases encouraged—our government to become unlimited in its goals, bloated in its size, and arbitrary in its action. In this respect Obama-care is more the culmination of decades of policy-making than a deviation from them. We’ve indulged in the fatal conceit that we can ask the state to attend to all our cares and invite the government to correct all our perceived problems, without considering either the counterproductive practical consequences (e.g., Obamacare will make health care less effective and more costly) or the enfeebling of the private sector (crony capitalism turns private businesses into supplicants of the state) or the undermining of our capacity for self-government (federal bureaucrats and federal judges govern us rather than carry out and interpret the laws passed by our elected officials). Now we are entering a period of consequences. To restore the idea and practices of limited, energetic self-government will require more than half-measures.
- We’ve hoped that the world might remain reasonably peaceful, friendly, and civilized—while skimping on our defense budgets and our military forces. More recently, we’ve signalled weakness to friends and enemies alike. We’ve pretended that happy talk and “soft power” would suffice in dealing with the hard truths of dictatorships, terror, fanaticism, and weapons of mass destruction. Now we are entering a period of consequences, which will require rejecting soothing and baffling expedients, and will instead demand strength and conviction on behalf of freedom and civilization.
- We’ve allowed our universities to become politically correct, our media to become juvenile, and our entertainments to become ever-more adolescent—and then we wonder why we’re baffled by the difficulties we have as a society in being candid, serious, and grown up. As C.S. Lewis put it, “We make men without chests and expect from them virtue and enterprise. We laugh at honor and are shocked to find traitors in our midst.” Now we are entering a period of consequences in which delaying the decay is no longer enough, and in which the counter-cultural and reconstructive cultural efforts that are underway will not only have to be intensified, but will have to make a difference quickly.
The British economist and businessman Josiah Charles Stamp is said to have remarked, “It is easy to dodge our responsibilities, but we cannot dodge the consequences of dodging our responsibilities.” Stamp, along with his wife and son, was killed in London in 1941 during the Blitz. Those deaths, and tens of millions others, were the result of decent people seeking for too long to dodge their responsibilities and to evade the consequences.
Jul 20 2010, 12:00 PM ET |
The median duration of unemployment is higher today than any time in the last 50 years. That's an understatement. It is more than twice as high today than any time in the last 50 years.
OK, you're saying, but what does this mean? Does it mean we must increase the duration of unemployment benefits to protect this new class of unemployed, or does it mean we need to stop subsidizing joblessness? Does it mean we need to expand federal retraining programs, or does it mean federal retraining programs aren't working? Does it mean we need more stimulus, more state aid, more infrastructure projects, more public works ... or does it mean it's time to stop everything, stand back and let business be business?
You're going to find smart people make a case for all six of the above public policy directions. (I tend to side with the first of each coupling.) It's hard to know for sure how to design public policy for historically unique crises precisely because they are historical orphans, without precedent to show us the right way from the wrong.
One of my first reactions to this graph was: Surely this is why we don't have to worry about inflation for a very, very long time. However, here's evidence that despite the historically inverse relationship between inflation and joblessness, "the long-term unemployed put less downward pressure on inflation." Ultimately, this is a graph that should humble policy makers more than it should scare them into confidently arguing they know exactly how to fix it.
“While some countries deserve to have their creditworthiness doubted, others, including the United States, do not. The United States is not another Greece, and the likelihood of default or any dire consequences from the present run-up of Treasury debt is minimal.
See, this is the argument that is always run. For instance, after WWII it was argued thus.
But what's forgotten is that the post-WWII environment was one of ramping industrial output and thus massive GDP growth. Indeed, during the 1950s we recorded insane growth numbers on an aggregate basis. This, of course, provides tax revenues, which in turn brings the debt-to-GDP numbers into some reasonable resemblance of balance.
But this is no longer true. Now we have massive debt increases and decreasing tax revenues, with no reasonable expectation of 7, 8 or 9% GDP growth to serve as the balance. In other words, the common mantra - "we'll grow out of it" - is bereft of validity this time around because we no longer have the capacity to grow actual output.
We've shipped most of our industrial capacity overseas and that which we do retain - finance, mostly - is parasitic - that is, it exists only by drawing funds from some other productive activity, just as does a tax.
The U.S. Treasury debt is soaring because of a depression, and the budget deficits have been essential in keeping the depression contained, avoiding a disaster worse than the 1930s. During a depression, an economy cannot absorb much if any deficit reduction. History shows deficit-slashing actions during depressions tend to be self-defeating because they so damage the economy that revenue plunges.
It does? Warren Harding would disagree with you. So does history.
Indeed, Harding's "Recession" was extraordinarily deep (reaching 20% unemployment) and deflation was extreme, reaching nearly 15% at the retail and nearly 37% (!) at wholesale levels. Total industrial production fell an astonishing 30%.
Yet in 18 months it was over. The bankrupt were forced to take their medicine and nobody was protected. Interest rates were not tampered with. By 1923 unemployment was around 3% and an astounding 60% production increase had been recorded.
Oh, and did I see the "D" word up there in that cited paragraph? Is someone admitting reality?
"R"s (Recessions) happen because of the mathematical reality of all economic systems where capital can be loaned. Interest requires them - it is a simple function of exponents.
"D"s (Depressions) happen when government can't keep its grubby paws out of an "R" and tries to protect the fools in the economy from their own foibles. This never succeeds in the long run and when the economic forces get distorted to a sufficient degree due to government interference and "protection" of those lenders and borrowers who made bad decisions you build up productive imbalances to the point that the economy is threatened with collapse. Yet even then government interference and intervention is the problem, not the solution.
A high public debt ratio in a high-debt-capacity country tends to shrink rapidly for years after the end of a major war or depression. The conditions presently causing high public debt growth in the United States and other advanced economies are not permanent and will eventually reverse, improving government fiscal situations dramatically.
No it won't. The proof is found in the fact that this isn't three years in the making - the excessive spending and deficits go back to 2003! The same claim - that this would be "reversed" - was made then too, as we were "recovering."
The fact is that it did not happen.
It won't happen this time either, as the jobs are gone and so is the productive capacity, having been sent overseas.
We spent the last ten years producing the illusion of prosperity through credit, which simply pulled forward final demand from tomorrow. But then tomorrow came and we did it again - and again...
If it was just government debt we might be able to get away with this. But it's not. The system is overstuffed with both government and private credit, and as such the "borrow more!" mantra simply won't work. It can't - there is no more credit capacity in the economy.
The 2003 mantra of "low rates and liar loans for everyone" allowed one more extension of idiocy in borrowing - one more "pulling forward" of demand. We doubled outstanding credit during the last decade - about 15% of our so-called "demand" each and every year was in fact false, created out of nothing more than a promise to pay tomorrow.
The "low interest rates" spurred borrowing last time - the reaction was immediate and powerful (if suicidal) - this time it has done nothing, as there is simply no more credit-carrying capacity in the economy.
So the government stepped in and replaced 11% of private final demand with more borrowing as the only able and willing borrower. But that cannot continue forever. Eventually those who lend us capital will discern that we're not going to pay, as that actual private final demand will not recover.
This is in fact precisely the same recognition that led to Greece's problems, and it will come here.
In order to argue the converse - that it will be "ok" - you need to show where we're going to get that 11% of final demand that the government is providing, plus enough additional private final demand to provide a positive actual GDP.
If you can show me how the economy will grow at, say, 15% annually for the next five years, I'll eat part of a page of The Wall Street Journal on Youtube.
That has never happened in the history of Fed Z1 record keeping, and it won't this time either.
Yet that is what has to happen for these "happy projections" put forth in this article to occur.
It's a fantasy folks - pure and simple.
By Ben Stein on 7.19.10 @ 6:08AM
I am sixty-five now. I have lived through many recessions. The first one I remember clearly was in 1958 and the worst one, by far, until now, was the one in the late 1970s stretching into the early 1980s, when we had double-digit inflation and double-digit unemployment simultaneously. That should have been impossible, but thanks to union Cost of Living Adjustment contracts and skyrocketing oil prices, it was indeed possible.
But the current recession, which really started with some very tense days in late 2007 and began in deadly earnest when Hank Paulson, possibly the most incompetent Treasury Secretary of all time, allowed Lehman Brothers to fail, has been the most upsetting for several reasons.
For one, it has hit the people closest to me the hardest. Until now, I never had a friend who was truly in financial extremis from a recession. When recessions happened, they happened to people in Ohio or Illinois or Michigan. Now, they have hit hard in California and in the law field where so many of my friends work and in Washington, D.C. (yes, even in D.C.) where I am from. I never had a friend lose his house until this recession and now I am sad to say I have many pals who have either lost their homes or are in process of losing their homes.
Next, because this recession hit employment so hard, but also hit home values so hard, many of my friends, who thought they were rolling in real estate equity, find themselves without work and also upside down on their homes, with lofty mortgages to pay, and no ability to sell their homes.
This is not happening to people in faraway places. This is happening to people very near me. Extremely near me.
Because the correction has hit hiring, real estate, and also stock prices so desperately hard, formerly upper middle class people find themselves very short of assets for retirement, owing more on their homes than the homes can fetch, and either jobless or underemployed. They are truly afraid on a scale I never expected to see.
In a word, I am seeing real desperation, which I have never seen before up close and personal. This is especially true of those facing retirement.
I see it even in the very tony neighborhoods where I hang out, like Beverly Hills and Rancho Mirage and Malibu. Older people and even younger people are scared.
However, as the economist I am, I try to not only watch and wring my hands, but to draw lessons and rules from the experience. Here are a few of them:
1. People who bought guaranteed income in the form of annuities from insurance companies have been saved. As far as I am aware, no insurers have failed to make the guaranteed payments they were contracted to make. People who bought variable annuities with value floors and guaranteed incomes and inflation riders have been able to laugh at the economic tornadoes. There are many people who hate insurers, but for those who put their trust in insurance companies to guarantee their old age comfort, there has been security.
2. The people who have been laid off and cannot find work are generally people with poor work habits and poor personalities. I say “generally” because there are exceptions. But in general, as I survey the ranks of those who are unemployed, I see people who have overbearing and unpleasant personalities and/or who do not know how to do a day’s work. They are people who create either little utility or negative utility on the job. Again, there are powerful exceptions and I know some, but when employers are looking to lay off, they lay off the least productive or the most negative. To assure that a worker is not one of them, he should learn how to work and how to get along -- not always easy.
(This brings to mind an idea I have long had: that high schools and colleges should have a course on "how to get along" and "how to do a day’s work." This would include showing up in clean clothes, smelling well, having had a good breakfast, dressed in a businesslike way, calling the other employees "sir" or "ma'am" and not talking back. This would include a teaching of the fact that the employee is not there for amusement, but to help the employer make money and to get a job done. It would include the idea that once you are at work, you are not at play. It is an idea whose time has come.)
Productive workers with real skills and real ability to get along are also sometimes unemployed, but they will be the last fired and the first hired.
3. Simple habits of prudence will almost save the day, even in a bad recession. People who have meaningful savings, insured retirement plans, diversification of assets, people who do not buy what they cannot afford, people who do not simply assume the money will materialize out of thin air for their next purchase, people who add and subtract and see life plain, these people rarely get in desperate trouble. It is amazing how old-fashioned habits of buying modestly and living within one’s means, and planning for bad times as well as good times, can get one through earth shaking events.
When men and women do not do this, their lives become horrible in bad times. In a recession like this, with unemployment high, home prices devilishly low, and stock prices falling, rising, then falling, lives can be turned upside down in a hurry if they have not been lived with at least a modicum of prudence.
I see this around me constantly. People in desperation (that word again!), women selling their bodies, men turning to drugs, families torn apart -- all because they allowed themselves to be ruled by magical thinking that things would be all right because the wisher happened to wish that they be all right. I get letters and e-mails from friends of decades standing asking for money every single day. Their common denominator is that they lacked prudence and lived in a dream world. I pray that I am not as much like them as I often think I am.
This has been a recession that has hit wishful thinking very hard, and has rewarded prudence lavishly.
This week, many of our largest corporations reported robust earnings – a positive sign of growth.
This last week large banks reported the rape of the public once again, with "profits" that came from skimming off pieces of production from common Americans. Every dollar a bank "makes" is one it takes from a productive person in this country, just as every dollar the government taxes is one it takes from a productive person.
But too many of our small business owners and those who aspire to start their own small businesses continue to struggle, in part because they can’t get the credit they need to start up, grow, and hire.
Capital formation does not come from borrowing. It comes from savings. But your policies, along with those of George W. Bush and the Federal Reserve under both you and he, have intentionally destroyed the return available on savings.
Therefore, you have sought to intentionally and willfully destroy capital formation, which is the source of entrepreneurship and small business formation.
This is a fact and no amount of spin will change it.
You have chosen to protect those who made bad bets in their lending through government largesse and manipulation of the markets.
You have permitted banks to lie about the quality of their alleged "assets" by getting rid of mark-to-market accounting and nightly collateral and margining for OTC derivatives.
Instead of allowing the market to enforce discipline, you have tampered with the market, protecting those "big businesses" and their revenue siphons which have bled the economy dry.
The problem is not the absence of government "help". It is the presence of government interference which has stifled small business growth and formation, and no amount of further tampering will make the situation better.
Three times, the Senate has tried to temporarily extend that emergency assistance. And three times, a minority of Senators – basically the same crowd who said “no” to small businesses – said “no” to folks looking for work, and blocked a straight up-or-down vote.
Some Republican leaders actually treat this unemployment insurance as if it’s a form of welfare.
It IS welfare.
Only the first 26 weeks of unemployment is actually a self-insurance program paid for by employees in the form of lower wage offers from their employers, compulsorily taxed (through both direct taxes and compulsory insurance payments) into an alleged fund that is then disbursed when one loses their job.
The entire rest of the so-called "EUC" benefit - second and third tier - is indeed WELFARE. It is a transfer payment from the general fund of the government to a person, not a payment of insurance upon loss, but rather a direct transfer.
Two years of these payments - 99 weeks - is more than enough. Indeed, that is a sufficient amount of time for someone to earn an associates degree in a local community college - if they bothered to do so.
But through the last year we have seen repeated "sob stories" of people who are on their last dollar as the EUC welfare ceases. And what do all of these sob stories have in common?
$100 cell phone plans, $75 cable television and Internet bills, $300 electric bills blasting air conditioning into the summer heat.
You would think that when someone loses their job they would immediately cut back on these non-necessary purchases. Purchases that nobody needs. You and I grew up in a world without cable TV, cell phones and in many cases (including mine) air conditioning.
That's five hundred dollars a month in many of these households that is being spent unnecessarily.
Oh sure, it's nice to have those things. And when one has a job, one can afford those things. But when one does not have a job it is not government's responsibility to cover the comforts that employment brings to one's personal situation.
Wake up Mr. President.
Your policies, just as those of the previous President Bush, are the reason there is no capital formation in this country.
YOU, ALONG WITH BERNANKE AND CONGRESS, HAVE INTENTIONALLY AND WILLFULLY DESTROYED CAPITAL FORMATION IN THE UNITED STATES WITH YOUR INCESSANT BAILOUTS AND HANDOUTS.
This is something I just got in my email, which I had to share with you all. Read it and get a new perspective on the new millenium’s parenting – which suddenly doesn’t seem so great after all.
TO ALL THE KIDS WHO SURVIVED the 1930’s 40’s, 50’s, 60’s and 70’s !!
First, we survived being born to mothers who smoked and/or drank while they were pregnant.
They took aspirin, ate blue cheese dressing, tuna from a can, and didn’t get tested for diabetes.
Then after that trauma, we were put to sleep on our tummies in baby cribs covered with bright colored lead-based paints.
We had no childproof lids on medicine bottles, doors or cabinets and when we rode our bikes, we had no helmets, not to mention the risks we took hitchhiking.
As infants & children, we would ride in cars with no car seats, booster seats, seat belts or air bags.
Riding in the back of a pick up on a warm day was always a special treat.
We drank water from the garden hose and NOT from a bottle.
We shared one soft drink with four friends, from one bottle and NO ONE actually died from this.
We ate cupcakes, white bread and real butter and drank koolade made with sugar, but we weren’t overweight because WE WERE ALWAYS OUTSIDE PLAYING !
We would leave home in the morning and play all day, as long as we were back when the streetlights came on.
No one was able to reach us all day and we were O.K.
We would spend hours building our go-carts out of scraps and then ride down the hill, only to find out we forgot the brakes. After running into the bushes a few times, we learned to solve the problem.
We did not have Playstations, Nintendo’s, X-boxes, no video games at all, no 150 channels on cable, no video movies or DVD’s, no surround-sound or CD’s, no cell phones, no personal computers, no Internet or chat rooms…….
WE HAD FRIENDS and we went outside and found them!
We fell out of trees, got cut, broke bones and teeth and there were no lawsuits from these accidents.
We ate worms and mud pies made from dirt, and the worms did not live in us forever.
We were given BB guns for our 10th birthdays, made up games with sticks and tennis balls and, although we were told it would happen, we did not put out very many eyes.
We rode bikes or walked to a friend’s house and knocked on the door or rang the bell, or just walked in and talked to them!
Little League had tryouts and not everyone made the team. Those who didn’t had to learn to deal with disappointment. Imagine that!!
The idea of a parent bailing us out if we broke the law was unheard of. They actually sided with the law!
These generations have produced some of the best risk-takers, problem solvers and inventors ever!
The past 50 years have been an explosion of innovation and new ideas.
We had freedom, failure, success and responsibility, and we learned
HOW TO DEAL WITH IT ALL!
If YOU are one of them . . . CONGRATULATIONS!
You might want to share this with others who have had the luck to grow up as
kids, before the lawyers and the government regulated so much of our lives for our own good
And while you are at it, forward it to your kids so they will know how brave (and lucky) their parents were.
Kind of makes you want to run through the house with scissors, doesn’t it?!
The quote of the month is by Jay Leno:
“With hurricanes, tornados, fires out of control, mud slides, flooding, severe thunderstorms tearing up the country from one end to another, and with the threat of bird flu and terrorist attacks….Are we sure this is a good time to take God out of the Pledge of Allegiance?”
Fast Company Blog ^ | Wed Oct 22, 2008 | Norman Wolfe
Posted on Monday, July 12, 2010 10:46:32 AM by Kerretarded
A friend of mine sent me a wonderful piece called “Catching the Wild Pig”. For those of you who have never heard this parable (and I hadn’t until now), here it is:
A chemistry professor at a large college had some exchange students in the class. One day while the class was in the lab the Professor noticed one young man (exchange student) who kept rubbing his back, and stretching as if his back hurt. The professor asked the young man what was the matter. The student told him he had a bullet lodged in his back. He had been shot while fighting communists in his native country who were trying to overthrow his country's government and install a new communist government.
In the midst of his story he looked at the professor and asked a strange question. He asked, 'Do you know how to catch wild pigs?' The professor thought it was a joke and asked for the punch line. The young man said this was no joke. 'You catch wild pigs by finding a suitable place in the woods and putting corn on the ground. The pigs find it and begin to come every day to eat the free corn. When they are used to coming every day, you put a fence down one side of the place where they are used to coming. When they get used to the fence, they begin to eat the corn again and you put up another side of the fence. They get used to that and start to eat again.
You continue until you have all four sides of the fence up with a gate in the last side. The pigs, who are used to the free corn, start to come through the gate to eat; you slam the gate on them and catch the whole herd. Suddenly the wild pigs have lost their freedom. They run around and around inside the fence, but they are caught.
Soon they go back to eating the free corn. They are so used to it that they have forgotten how to forage in the woods for themselves, so they accept their captivity.
The young man then told the professor that is exactly what he sees happening to America. The government keeps pushing us toward socialism and keeps spreading the free corn out in the form of programs such as supplemental income, tax credit for unearned income, tobacco subsidies, dairy subsidies, payments not to plant crops (CRP), welfare, medicine, drugs, etc. While we continually lose our freedoms -- just a little at a time.
Peace Through Strength and American Pride vs. “Enemy-Centric” Policy
Wednesday, June 30, 2010 at 5:56pm
Earlier this week, I spoke at the Freedom Fest in Norfolk, Virginia; and, evidently, the media was asked to leave – not by me, that’s for sure. I want my message out, so despite reporters making up a story about “Palin people kicking us out” (uh, the “Palin people” entourage would consist of one person – my 15-year-old daughter, Willow – and I have no doubt she could take on any reporter, but I know for certain she didn’t “kick ‘em out” of the event). Anyway, here are some of the key issues I spoke about.
It takes a lot of resources to maintain the best fighting force in the world – especially at a time when we face financial uncertainty and a mountain of debt that threatens all of our futures.
We have a federal government that is spending trillions, and that has nationalized whole sections of our economy: the auto industry, the insurance industry, health care, student loans, the list goes on – all of it at enormous cost to the tax payer. The cost of Obamacare alone is likely to exceed $2.5 trillion dollars.
As a result of all these trillion dollar spending bills, America’s going bust in a hurry. By 2020 we may reach debt levels of $20 trillion – twice the debt that we have today! It reminds me of that joke I read the other day: “Please don’t tell Obama what comes after a trillion!”
Something has to be done urgently to stop the out of control Obama-Reid-Pelosi spending machine, and no government agency should be immune from budget scrutiny. We must make sure, however, that we do nothing to undermine the effectiveness of our military. If we lose wars, if we lose the ability to deter adversaries, if we lose the ability to provide security for ourselves and for our allies, we risk losing all that makes America great! That is a price we cannot afford to pay.
This may be obvious to you and me, but I am not sure the Obama Administration gets it. There isn’t a single progressive pet cause which they haven’t been willing to throw billions at. But when it comes to defense spending, all of a sudden they start preaching a message of “fiscal restraint.” Our Defense Secretary recently stated the “gusher” of defense spending was over and that it was time for the Department of Defense to tighten its belt. There’s a gusher of spending alright, but it’s not on defense. Did you know the US actually only ranks 25th worldwide on defense spending as a percentage of GDP? We spend three times more on entitlements and debt services than we do on defense.
Now don’t get me wrong: there’s nothing wrong with preaching fiscal conservatism. I want the federal government to balance its budget right now! And not the Washington way – which is raising your taxes to pay for their irresponsible spending habits. I want it done the American way: by cutting spending, reducing the size of government, and letting people keep more of their hard-earned cash.
But the Obama administration doesn’t practice what it preaches. This is an administration that won’t produce a budget for fear that we discover how reckless they’ve been as fiscal managers. At the same time, it threatens to veto a defense bill because of an extra jet engine!
This administration may be willing to cut defense spending, but it’s increasing it everywhere else. I think we should do it the other way round: cut spending in other departments – apart from defense. We should not be cutting corners on our national security.
THE U.S. NAVY
Secretary Gates recently spoke about the future of the US Navy. He said we have to “ask whether the nation can really afford a Navy that relies on $3 to $6 billion destroyers, $7 billion submarines, and $11 billion carriers.” He went on to ask, “Do we really need... more strike groups for another 30 years when no other country has more than one?”
Well, my answer is pretty simple: Yes, we can and, yes, we do because we must. Our Navy has global responsibilities. It patrols sea lanes and safeguards the freedoms of our allies – and ourselves. The Navy right now only has 286 ships, and that number may decrease. That will limit our options, extend tours for Navy personnel, lessen our ability to secure our allies and deter our adversaries. The Obama administration seems strangely unconcerned about this prospect.
OBAMA’S FOREIGN POLICY INHERITANCE
When George W. Bush came into office, he inherited a military that had been cut deeply, an al Qaeda that had been unchallenged, and an approach to terrorism that focused on bringing court cases rather than destroying those who sought to destroy us. We saw the result of some of that on 9/11.
When President Obama came into office, he inherited a military that was winning in Iraq. He inherited loyal allies and strong alliances. And thanks to the lamestream media pawing and purring over him, he had the benefit of unparalleled global popularity. What an advantage! So their basic foreign policy outlines should have been clear. Commit to the War on Terror. Commit to winning – not ending, but winning the war in Afghanistan. Commit to the fight against violent Islamic extremism wherever it finds sanctuary. Work with our allies. Be resolute with our adversaries. Promote liberty, not least because it enhances our security. Unfortunately, these basic principles seem to have been discarded by Washington.
THE WAR ON TERROR
His administration has banned the phrase “war on terror,” preferring instead politically correct nonsense like “overseas contingency operations.” His Homeland Security Secretary calls acts of terrorism “man-caused disasters.” His reckless plan to close Guantanamo (because there’s no place to go after it’s closed) faces bipartisan opposition now.
The Attorney General just announced that a decision about where to try terrorists like 9/11 master mind Khalid Sheikh Mohammed would not be announced until after the mid-term elections. Is there something he’s afraid to tell us?
The President’s new National Security Strategy does not even use the word “Islamic” when referring to violent extremism. Does he think the ideology of those who seek to kill Americans is irrelevant? How can we seek to defeat an enemy if we don’t acknowledge what motivates them and what their ultimate goals are? President Obama may think he is being politically correct by dropping the term, but it flies in the face of reality. As Senator Joe Lieberman noted, refusing to use the word Islamic when describing the nature of the threat we face is “Orwellian and counterproductive.”
In Afghanistan, it is true that President Obama approved deploying additional forces to the conflict – most, but not all the troops requested by commanders on the ground. But it took months of indecision to get to that point, and it came at a very high price – a July 2011 date to begin withdrawal.
This date was arbitrary! It bears no relation to conditions on the ground. It sends all the wrong signals to our friends and to our enemies. We know our commanders on the ground are not comfortable with it.
As that great Navy war hero, Senator John McCain recently put it: “The decision to begin withdrawing our forces from Afghanistan arbitrarily in July 2011 seems to be having exactly the effect that many of us predicted it would: It is convincing the key actors inside and outside of Afghanistan that the United States is more interested in leaving than succeeding in this conflict.”
Does the President really believe the Taliban and al Qaeda won’t be empowered by his naming of a starting date for withdrawal? They now believe they can beat him simply by outlasting us. What sort of effect does he think this will have on the morale of our troops – and of our allies?
ALIENATING OUR ALLIES
It’s not the only area where the Obama administration has failed our allies. They escalated a minor zoning issue in Jerusalem into a major dispute with our most important ally in the Middle East, Israel. They treated the Israeli Prime Minister shabbily in Washington. When a Turkish sponsored flotilla threatened to violate a legal Israeli blockade of Hamas-run Gaza, the Obama Administration was silent. When Israeli commandos were assaulted as they sought to prevent unmonitored cargoes from being delivered to Hamas terrorists, the Obama Administration sent signals it might allow a UN investigation into the matter – an investigation that would be sure to condemn our ally Israel and bemoan the plight of Hamas. Loyal NATO allies in central Europe were undermined by the cancellation of a missile defense program with virtually no warning. At the same time, Russia and China are given preferential treatment, while remaining silent on their human rights violations.
Meanwhile, the Obama Administration reaches out to some of the world’s worst regimes. They shake hands with dictators like Hugo Chavez, send letters to the Iranian mullahs and envoys to North Korea, ease sanctions on Cuba and talk about doing the same with Burma. That’s when they’re not on one of their worldwide apology tours.
Do we get anything in return for all this bowing and apologizing? No, we don’t. Yes, Russia voted for a weak sanctions resolution on Iran, but it immediately stated it could sell advanced anti-aircraft missile to Iran anyway, and would not end its nuclear cooperation. In response to North Korea’s unprovoked sinking of a South Korean Navy ship, China warned us not to take part in military exercises with our ally.
And while President Obama lets America get pushed around by the likes of Russia and China, our allies are left to wonder about the value of an alliance with the U.S. They have to be wondering if it’s worth it.
AN “ENEMY-CENTRIC” FOREIGN POLICY
It has led one prominent Czech official to call Obama’s foreign policy “enemy-centric.” And this “enemy-centric” approach has real consequences. It not only baffles our allies, it worries them. When coupled with less defense spending, it signals to the world that maybe we can no longer be counted on, and that we have other priorities than being the world leader that keeps the peace and provides security in Europe, in Asia and throughout the world.
Together with this enemy-centric foreign policy, we see a lessening of the long, bipartisan tradition of speaking out for human rights and democracy. The Secretary of State said she would not raise human rights with China because “we pretty much know what they are going to say.” Democracy promotion programs have been cut. Support for the brave Iranians protesting their government was not forthcoming because President Obama would rather try to cut a deal with their oppressors.
When the world’s dictators see the United States unconcerned with human rights and political freedom, they breathe a sigh of relief, because they know they have a free hand to repress their own people.
This goes against the very ideals on which our republic was founded. There is a long bipartisan tradition of speaking out in favor of freedom – from FDR to Ronald Reagan. America loses something very important when its President consigns human rights and freedom to the back burner of its international priorities.
A DIFFERENT VIEW OF AMERICA
We have a President, perhaps for the very first time since the founding of our republic, who doesn’t appear to believe that America is the greatest earthly force for good the world has ever known.
When asked whether he believed in American exceptionalism, President Obama answered, “I believe in American exceptionalism, just as I suspect that the Brits believe in British exceptionalism and the Greeks believe in Greek exceptionalism.” Amazing. Amazing.
I think this statement speaks volumes about his world view. He sees nothing unique in the American experience? Really? Our founding, and our founding mothers and fathers? Really? And our history over the past two and half centuries?
Really? He sees nothing unique in an America that fought and won two world wars and in victory sought not one inch of territory or one dollar of plunder? He sees nothing unique in an America that, though exhausted by conflict, still laid the foundation for security in Europe and Asia after World War II? He sees nothing unique in an America that prevailed against an evil ideology in the Cold War? Does he just see a country that has to be apologized for around the world, especially to dictators?
President Obama actually seems reluctant to even embrace American power. Earlier this year when he was asked about his faltering Middle East peace process, he said “whether we like it or not, we remain a dominant military superpower.” Whether we like it or not?! Really? Mr. President, this may come as news to you, but most Americans actually do like it. And so do our allies. They know it was our military might that liberated countless millions from tyranny, slavery, and oppression over the last 234 years. Yes, we do like it. As a dominant superpower, the United States has won wars hot and cold; our military has advanced the cause of freedom and kept authoritarian powers in check.
It is in America’s and the world’s best interests for our country to remain the dominant military superpower, but under President Obama’s leadership that dominance may be slipping away. It’s the result of an agenda that reeks of complacency and defeatism.
(I went on from there to talk about our need to end the negative, defeatist attitudes of those in leadership. I spoke further on American exceptionalism, and Willow and I ended a great evening with some great patriots. Sorry the media chose to report anything other than what actually happened at the event.)
- Sarah Palin
The United States of America is in great peril. Absent drastic and immediate intervention, America as we know it will cease to exist. Americans are quite adept at the art of denial. But, if we don’t begin to recognize the gut-wrenching truth that we screwed things up by putting an illegitimate usurper in the most powerful office on Earth and that said usurper has been systematically dismantling and destroying our economy, military, middle-class, social structure and Constitution, it’s game over.
The numbers don’t lie. While Obama spins rising GDP and a falling unemployment rate as proof that his economic policies are making our economy stronger, the Thief-In-Chief is engaging in a campaign of bald-faced lies and he knows it. Our economy is essentially dying, the victim of institutionalized chaos and growing uncertainty. The only thing keeping it alive at this point is money seized from those who earned it and given to those who didn’t, while the government coerces them into buying cars, or appliances to prop up the federal government, or its major propagandists and campaign contributors at General Electric and SEIU.
No matter how hard Obama tries to deflect criticism to his predecessor or blame foreign markets, millions of Americans whose jobs have evaporated, whose small businesses have been shuttered and whose taxes will increase next year to pay the trillions in debt he put on the nation’s balance sheet know better. While government continues to spend, small businesses continue to stagnate or die, jobs continue to disappear, debt continues to rise, the American people continue to lose confidence, and the warnings become more dire. Economists are now openly discussing the very real possibility of a “double-dip” recession. While technically correct, this explanation of what’s happening to our economy is far too simplistic.
Recession is defined as negative economic growth for two consecutive quarters. So, while Obama can technically claim that we’re out of recession and in recovery, the growth is all redistributed tax revenue that Democrats are seizing from you and I and giving away like LSD and Sexually Transmitted Diseases at Woodstock.
Keynesian economics has been a failure wherever implemented. Government priming of the economic pumps has never worked and has inevitably led to banana republics and rivers of blood when the populace is finally purged of wealthy, productive citizens to tax. Nobody could be stupid enough to believe that continuing down this path will lead anywhere but to financial ruin. All of this chaos and uncertainty is intentional and the Obamacrats are engaging in the wholesale overthrow of our free market system.
Make no mistake. We are at war. Although no shots have been fired and no bombs have been dropped, the casualties are mounting, the budget keeps bleeding, and the Democrats keep spending.
Many people look to November for salvation, but an election won’t save us from economic ruin.The only thing that can put this nation back on the path to anything resembling prosperity is to seize power back from the government and shrink this behemoth back to the point of such weakness it can never grow strong enough threaten our God-given liberties again.
This once-great nation is now speeding down the road to ruin, driven there by an entire generation of ambulance-chasers who hold in their hearts nothing but contempt for our founding principles. Joe Biden’s recent comments to a Wisconsin custard shop manager who chided the VP to lower his taxes provide a glimpse of the institutionalized arrogance embodied by the Obama Administration and provide some insight into the pickled brains of corrupt, morally bankrupt politicians, who sanctimoniously attack their own constituents, force-feed us their moral degeneracy, violate their oaths of office, and whose greasy palms have somehow still managed to remain free of handcuffs all these years.
Sunday, July 4th at 5:00AM EDT
When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. — Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.
He has refused his Assent to Laws, the most wholesome and necessary for the public good.
He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.
He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.
He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their Public Records, for the sole purpose of fatiguing them into compliance with his measures.
He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.
He has refused for a long time, after such dissolutions, to cause others to be elected, whereby the Legislative Powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.
He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.
He has obstructed the Administration of Justice by refusing his Assent to Laws for establishing Judiciary Powers.
He has made Judges dependent on his Will alone for the tenure of their offices, and the amount and payment of their salaries.
He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance.
He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.
He has affected to render the Military independent of and superior to the Civil Power.
He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:
For quartering large bodies of armed troops among us:
For protecting them, by a mock Trial from punishment for any Murders which they should commit on the Inhabitants of these States:
For cutting off our Trade with all parts of the world:
For imposing Taxes on us without our Consent:
For depriving us in many cases, of the benefit of Trial by Jury:
For transporting us beyond Seas to be tried for pretended offences:
For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies
For taking away our Charters, abolishing our most valuable Laws and altering fundamentally the Forms of our Governments:
For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.
He has abdicated Government here, by declaring us out of his Protection and waging War against us.
He has plundered our seas, ravaged our coasts, burnt our towns, and destroyed the lives of our people.
He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation, and tyranny, already begun with circumstances of Cruelty & Perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.
He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.
He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.
In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince, whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.
Nor have We been wanting in attentions to our British brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.
We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these united Colonies are, and of Right ought to be Free and Independent States, that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. — And for the support of this Declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our Lives, our Fortunes, and our sacred Honor.
— John Hancock
Josiah Bartlett, William Whipple, Matthew Thornton
John Hancock, Samuel Adams, John Adams, Robert Treat Paine, Elbridge Gerry
Stephen Hopkins, William Ellery
Roger Sherman, Samuel Huntington, William Williams, Oliver Wolcott
William Floyd, Philip Livingston, Francis Lewis, Lewis Morris
Richard Stockton, John Witherspoon, Francis Hopkinson, John Hart, Abraham Clark
Robert Morris, Benjamin Rush, Benjamin Franklin, John Morton, George Clymer, James Smith, George Taylor, James Wilson, George Ross
Caesar Rodney, George Read, Thomas McKean
Samuel Chase, William Paca, Thomas Stone, Charles Carroll of Carrollton
George Wythe, Richard Henry Lee, Thomas Jefferson, Benjamin Harrison, Thomas Nelson, Jr., Francis Lightfoot Lee, Carter Braxton
William Hooper, Joseph Hewes, John Penn
Edward Rutledge, Thomas Heyward, Jr., Thomas Lynch, Jr., Arthur Middleton
Button Gwinnett, Lyman Hall, George Walton
Good call Ambrose. This is a depression, it is not a recession of either the "single dip" or "double dip" variety. It didn't start with Obama, but everything he and his Democrat colleagues (and Brown when in power) have done, just like FDR, has made things worse.
Start from the very simple proposition: It is the real private sector, and only the private sector, that creates wealth and sustainable jobs (jobs in the public sector are only sustainable if there is private sector wealth being created to support them). In addition, government debt is only ever repaid with wealth taken from the real private sector (no lenders expect to take delivery of the output of government bureaucrats). The more government debt, the more that will be taken from the real private sector.
And, in this regard, the real private sector does not include those parts dependent on government directly (eg "green" industry) or indirectly (eg much of the accounting and legal professions which exist to interpret and apply government regulations, or to find ways around them, or lobbyists, or most of what is now euphemistically called "banking", which exists to separate wealth from its creators, and in its current form is only sustainable on the implicit guarantee of government bailouts each time it fails.), all of which have had explosive growth, driven by government.
For decades, government has consistently encouraged the growth of both government and its dependents in the faux private sector, all at the expense of the real private sector. Fannie Mae and Freddie Mac were essential parts of this in the US. Paulson's TARP extended it. The Democrat's confiscation of the property of bondholders as part of the nationalisation of GM and crony capitalist bailout of Chrysler, Obamacare with its massive cost impositions on business (leaving aside its doubtful constitutionality), the "stimulus" which was essentially a payoff to Democrat supporters (public sector unions, ACORN and the like, crony businesses) all to be paid for by the real private sector, the continuous intrusion of Obama's czars with ever more costly, obstructive, regulation, the threat of cap and tax legislation, are all compounding deterrents to private sector investment, without which the economy cannot re-engineer itself for growth.
In addition, the vast trade imbalances which were not just incidental to the growth of government. The offshoring of jobs to China and the borrowing of funds from it to pay for the cheap goods it produced with western technology and know how were actually essential to support the continuous growth of government and its intrusion while still giving the community a sense that its standard of living was OK or even increasing, albeit as we now see just temporarily. Had that temporary subsidy not been available, and the pain made more immediate, the US electorate would have called a halt to the growth of government much earlier.
Central to this policy has been hollowing out the manufacturing and inventive capacity of the west. Note, these two things are linked. For a brilliant, real world, exposition see the article by Andy Grove, ex Intel CEO, at http://www.bloomberg.com/news/2010-07-01/how-to.... The fundamental issues he raises of scaling and industry dynamics over decades are totally lacking from macro-economists' analysis and advice, and certainly from the appreciation and actions of "bankers", politicians and bureaucrats.
There are a few matters over which national governments have clear and unambiguous responsibility. Defense and border security is one. International trade is another. Western governments, unlike those of China and other Asian countries, have failed to manage international trade in the interests of their own country. In so doing, they have greatly damaged their national productive capacity.
This cannot be reversed quickly. It certainly cannot be reversed until indigenous business in the real private sector has not just lukewarm support, but absolutely enthusiastic support from government, which consists not of handouts, but shrinking the public sector and its costs, and removing most of the restrictions placed on business by government, including the threat of future profit confiscation; as well as managing international trade in the national interest, so foreign competitors are not given unfair advantages.
The British Government is starting to do some of this, but only some. The US Government has not, and it will not as long as Obama and his minions believe that they, not the private sector, magically create wealth in the economy. As they will never change their views, this US depression will certainly last at least as long as they are in power.
By Ambrose Evans-Pritchard
Published: 9:33PM BST 04 Jul 2010
People queue for a job fair in New York. The share of the US working-age population with jobs in June fell from 58.7pc to 58.5pc. The ratio was 63pc three years ago. Photo: EPA
"The economy is still in the gravitational pull of the Great Recession," said Robert Reich, former US labour secretary. "All the booster rockets for getting us beyond it are failing."
"Home sales are down. Retail sales are down. Factory orders in May suffered their biggest tumble since March of last year. So what are we doing about it? Less than nothing," he said.
California is tightening faster than Greece. State workers have seen a 14pc fall in earnings this year due to forced furloughs. Governor Arnold Schwarzenegger is cutting pay for 200,000 state workers to the minimum wage of $7.25 an hour to cover his $19bn (£15bn) deficit.
Can Illinois be far behind? The state has a deficit of $12bn and is $5bn in arrears to schools, nursing homes, child care centres, and prisons. "It is getting worse every single day," said state comptroller Daniel Hynes. "We are not paying bills for absolutely essential services. That is obscene."
Roughly a million Americans have dropped out of the jobs market altogether over the past two months. That is the only reason why the headline unemployment rate is not exploding to a post-war high.
Let us be honest. The US is still trapped in depression a full 18 months into zero interest rates, quantitative easing (QE), and fiscal stimulus that has pushed the budget deficit above 10pc of GDP.
The share of the US working-age population with jobs in June actually fell from 58.7pc to 58.5pc. This is the real stress indicator. The ratio was 63pc three years ago. Eight million jobs have been lost.
The average time needed to find a job has risen to a record 35.2 weeks. Nothing like this has been seen before in the post-war era. Jeff Weninger, of Harris Private Bank, said this compares with a peak of 21.2 weeks in the Volcker recession of the early 1980s.
"Legions of individuals have been left with stale skills, and little prospect of finding meaningful work, and benefits that are being exhausted. By our math the crop of people who are unemployed but not receiving a check amounts to 9.2m."
Republicans on Capitol Hill are filibustering a bill to extend the dole for up to 1.2m jobless facing an imminent cut-off. Dean Heller from Vermont called them "hobos". This really is starting to feel like 1932.
Washington's fiscal stimulus is draining away. It peaked in the first quarter, yet even then the economy eked out a growth rate of just 2.7pc. This compares with 5.1pc, 9.3pc, 8.1pc and 8.5pc in the four quarters coming off recession in the early 1980s.
The housing market is already crumbling as government props are pulled away. The expiry of homebuyers' tax credit led to a 30pc fall in the number of buyers signing contracts in May. "It is cataclysmic," said David Bloom from HSBC.
Federal tax rises are automatically baked into the pie. The Congressional Budget Office said fiscal policy will swing from
a net +2pc of GDP to -2pc by late 2011. The states and counties may have to cut as much as $180bn.
Investors are starting to chew over the awful possibility that America's recovery will stall just as Asia hits the buffers. China's manufacturing index has been falling since January, with a downward lurch in June to 50.4, just above the break-even line of 50. Momentum seems to be flagging everywhere, whether in Australian building permits, Turkish exports, or Japanese industrial output.
On Friday, Jacques Cailloux from RBS put out a "double-dip alert" for Europe. "The risk is rising fast. Absent an effective policy intervention to tackle the debt crisis on the periphery over coming months, the European economy will double dip in 2011," he said.
It is obvious what that policy should be for Europe, America, and Japan. If budgets are to shrink in an orderly fashion over several years – as they must, to avoid sovereign debt spirals – then central banks will have to cushion the blow keeping monetary policy ultra-loose for as long it takes.
The Fed is already eyeing the printing press again. "It's appropriate to think about what we would do under a deflationary scenario," said Dennis Lockhart for the Atlanta Fed. His colleague Kevin Warsh said the pros and cons of purchasing more bonds should be subject to "strict scrutiny", a comment I took as confirmation that the Fed Board is arguing internally about QE2.
Perhaps naively, I still think central banks have the tools to head off disaster. The question is whether they will do so fast enough, or even whether they wish to resist the chorus of 1930s liquidation taking charge of the debate. Last week the Bank for International Settlements called for combined fiscal and monetary tightening, lending its great authority to the forces of debt-deflation and mass unemployment. If even the BIS has lost the plot, God help us.