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All Da King's Men

The State Of The Economy

By David King Published: June 11, 2013

With so many scandals flying around the Obama administration, the state of the economy has been pushed to the background lately.

So let's check in with the economy.

There are a few positive signs to report.

The Dow-Jones average is over 15,000. It has recovered from the Great Recession and is now slightly higher than it was in 2007. This deserves a golf clap.

Housing prices have ticked upward, but are still nowhere near their pre-recession levels.

The federal deficit for FY2013 was projected by the CBO to be "only" $642 billion. This marks the first time during the Obama administration that the deficit wasn't over a trillion, but $642 billion still stinks, and the deficit is projected to go back up in the coming years.

So much for the good news.

The national unemployment rate is 7.6%. That stinks, considering that the Great Recession officially ended four years ago. Things are even worse if you look at the labor participation rate, which is lower than it's been since the mid-1980's. Millions are leaving the workforce.

Even though corporate profits are way up for the S&P 500, wages are stagnant. That's because the way big business is turning profits is largely by holding down labor costs, not by big rises in demand (see: 7.6% unemployment rate).  Most of the jobs created during the Obama years have been low-wage jobs. As of March, 2013, median household income was still down 7.3% since the recession started. Both nominal and real median incomes are way below pre-recession levels, even though costs continue to rise. That means inflation is eroding more and more of the falling wealth of Americans.

The national debt will soon top $17 trillion, and Obama has no plan to balance the budget...ever.

Health care costs continue to rise, and the (un)Affordable Care Act (ObamaCare) will go into effect next year, raising health insurance costs significantly, and adding millions and millions more people to our already overburdened and underfunded entitlement rolls. The Ohio Department of Insurance estimated Ohio health insurance costs will rise by 88% due to Obama's Affordable Care Act. Weren't we sold on ObamaCare as a way to REDUCE costs ? I'm sure I remember the President making that claim repeatedly.

All this leads to a predictable outcome. According to the Census Bureau, we have the highest poverty rates since the mid 1960's, when LBJ launched the War On Poverty. Fifty million Americans live below the poverty line. Nearly 50 years of entitlement expansion, with entitlement participation greater than ever, and we're no better off than when we started. Record numbers of people are on food stamps. Record numbers are on disability. We have more people dependent on the government than ever before, nearly half the nation, and that is going to begin increasing dramatically next year when ObamaCare goes into effect. Almost 70% of the 2012 budget went to dependency programs, and those programs are about to grow by leaps and bounds as the baby boomers retire.

Why haven't all these anti-poverty programs resulted in less poverty ? To me, there is one obvious reason. Anti-poverty programs don't lift anyone out of poverty. They might keep you from becoming completely destitute, but even if you take advantage of every government entitlement program in existence, you are still poor. We don't need more entitlement programs. We need to get people off entitlement programs, and back to becoming productive again.

President Obama keeps saying things are getting better. That may be true in some respects, but the way I see it, things have hardly ever been worse, not in my lifetime, and signs tell me things are about to get worse yet in the coming years.

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