Obamanomics--Income and Minimum Wage

Income Levels

In September of 2009, Obama promised that "many middle-class families will see their incomes go up by about $3,000.00 because of the Recovery Act, getting back much of what they lost due to this recession." (See HERE)

That would have been very nice.

However, real median household income has dropped each year that Obama has been in office--from about $52,000 to $50,000. (See HERE)

So, instead of an increase of $3000.00, Obamanomics produced the Leftist LUNC of a loss of $2,000.00.

For a more detailed analysis, please see my articles on "Income Inequality": Equal Pay for Equal Work and Divide Between Rich and Poor.

[Update 10/26/2015: "1 in 2 Workers Make Less Than $30,000 a Year]

Minimum wage:

Minimum wage laws have been around since liberals, like FDR, first enacted them in 1938  (See HERE)

"Over the years, Congress has significantly expanded the coverage and increased the minimum wage rate...Since 1938 the federal minimum wage has been raised 22 times. From 1949 to 1968 the real value of the minimum wage (in 2011 dollars) rose rapidly from $3.78 to $10.34. At $7.25 per hour, the minimum wage today in real dollars is 85 percent greater than the original benchmark, and just below its average for the past 60 years of $7.59. Since the 1970s, the federal minimum wage has fluctuated around roughly 40 percent of the average private sector hourly wage." (ibid.)

Individual states have also enacted minimum wage laws, and they are enforce as long as they exceed the federal requirement.

In July of 2007, as Obama was ramping up his first presidential campaign, he pledged: "I won't wait 10 years to raise the minimum wage. I'll guarantee that it goes up every single year." (Reported HERE) And, while several increase took place in accordance with a 2007 act of Congress 9which Obama had little to nothing to do with), the last raise occurred in 2009, Obama's first year in office. (See HERE) This means that he failed in his pledge over the last three years.

Then, in March of 2013, liberal Democrats drafted legislation to increase the minimum wage by 28% (from $7.25. to $10.10), and to index the minimum wage to inflation, (See HERE) That bill failed, And, now in August of that same year, five years after making his promise (see HERE), President Obama scaled back on the earlier increase and proposed raising the minimum wage to just $9. (See HERE and HERE)

His proposal would effectively raise federal minimums well above all the states except Washington. (ibid.)

One of the intents behind raising the minimum wage was to "addresses the country’s yawning levels of income inequality, which the White House has tried to reduce with targeted tax credits, a major expansion of health insurance, education and other proposals" (See HERE and also HERE)

This seems compassionate.

What makes this intent of interest is the fact that since the last time the minimum wage was increased (i.e. July of 2009, where it went from $6.55 to $7.25), for the first time in decades, income levels in all but one quintile began to decline. Only the very rich got richer, and everyone else got poorer. (See HERE) The Leftist LUNC here, then, is that, in spite of, or perhaps in part because of, the increase in minimum wage, incomes became more unequal.

Another intent was alluded to in Obama's State of the Union address in February of 2013: “Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong, Let’s declare that in the wealthiest nation on earth, no one who works full time should have to live in poverty.” (See HERE)

Again, this seem very compassionate. 

However, as with income inequality, the poverty rate has continued to climb ever since 2009 when the minimum wage was last increased. (See HERE) Again, the Leftist LUNC here is that in spite of, or perhaps in part because of, the increase in minimum wage, poverty has increased rather than decreased.

Even some people on the Left get that the President's current proposal wont work as planned. An article in the Huffington Post suggests that Obama's proposal will have little effect on the poverty level: "A recent report by the Brookings Institute, a nonprofit research organization, has found that a $9-per-hour minimum wage would increase the earnings of low-income households by only 7 percent, jumping to $11,828 from $11,047 on average. Any family of four earning $23,550 or less per year is defined as impoverished, according to the Census Bureau." (See HERE)

Still other liberals believe that a far more cost-effect way to help the poor than increasing the minimum wage would be to raise the Earned Income Tax Credit. (See HERE and HERE)

What some leftist seem to forget is that the jump in minimum wage isn't free. Someone has to pay for the artificial increased cost of labor. During good economic times, the increased cost is often born mostly by low-skilled teenage workers, and this in the form of lay-offs and/or reductions in work hours and/or heightened production expectations. Whereas, during hard economic times, like over the last half-decade, where business have already strained their productivity and profit margins, this cost to teens may well be even higher--which is disturbing given that unemployment today for teens is already more than double the general population (16.3 percent for teens as a whole, and 28.2 percent for black teens). (See HERE and HERE) 

Granted, depending upon the economic model of choice and the timing and scope of the study, economist are divided over the effects of raising minimum wages on employment and hours worked and the economy (see HERE and HERE and HERE and  HERE and HERE), though most view it as negative. (ibid. See also HERE)

Nevertheless, following the last increase in 2009, not only has income inequality and poverty increased, but the ratio of part-time to full-time jobs has skyrocketed, unemployment has gone up among low-skilled workers, and the workforce partition rate over all has gone down. (See HERE) So, at best, even if these LUNCs can be attributed to other things, increasing the minimum wage had no generally positive economic impact, and at worse it had a negative impact just as most economist supposed.

For a more in-depth analysis, see my Minimum Wage Series. as we;; as these articles: HERE and HERE and HERE and HERE.

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For an explanation of why these Leftist LUNCs may occur, please see: Gov: Wrong tool for the Right Job:  Strength in Numbers, Cold Nanny, and The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting. Other explanations will be added as they are posted.

Obamanomics--Taxes

As a candidate for the presidency in 2008, and throughout his first term, Barak Obama repeatedly guaranteed that he wouldn't raise taxes on the middle class or those making less than $250K a year. (See HERE)  He is quoted as saying: "'I can make a firm pledge' that 'no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes....If your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime.'"(See HERE) During his presidency he said: “'For the last few days, leaders in both parties have been working toward an agreement that will prevent a middle-class tax hike from hitting 98 percent of all Americans starting tomorrow,' he said. 'Preventing that tax hike has been my top priority, because the last thing folks, like the folks up here on this stage, can afford right now is to pay an extra $2,000 in taxes next year.'”(see HERE)

Better yet, Obama has remarked: "I have not only pledged not to raise their taxes, I've been the first candidate in this race to specifically say I would cut their taxes." (See HERE)  In fact, he committed to cut taxes for 95% of working families. (See HERE and HERE and HERE)

Isn't that fantastic?

Specifically, his tax pledges included: a $500 tax cut for workers and $1000 for working couples; $4,000 American Opportunity Tax Credit for college; a 10% mortgage interest tax credit for struggling homeowners, elimination of Income Taxes for seniors making less than $50,000; "reform the Child and Dependent Care Tax Credit by making it refundable and allowing low-income families to receive up to a 50 percent credit for their child care expenses;" triple earned income tax credit; and the introduction of health care tax credits. (ibid.)

However, contrary to what Obama had promised, taxes have been raised on "ordinary folks:"

• Payroll taxes: like Social Security withholding, increased from 4.2% to 6.2%, which averages out to about $1,600 a year per middle-class family. (see HERE and HERE), 
• Income taxes: Because of the "chained CPI" that determines inflation: "On the tax side, all income tax brackets are subject to inflation. Slowing down the inflation rate slows down the annual rate of growth in all income tax brackets. This means the Obama budget contains a tax increase on 100 percent of middle class taxpayers—anyone who pays the federal income tax. Many other tax provisions—the standard deduction, the personal exemption, PEP and Pease, IRA and 401(k) contribution limits, and many others—are also tied to how CPI is measured. Chained CPI as a stand-alone measure (that is, not paired with tax relief of equal or greater size) is a tax increase and a Taxpayer Protection Pledge violation. Various reports peg the tax increase amount as exceeding $100 billion over the next decade." (See HERE and HERE and HERE and HERE) "The president’s proposal to change the way inflation is calculated means that benefits like the earned income tax credit would grow at a slower pace. His proposed deduction cap would hit people with taxable income as low as $183,000." (See HERE) Obama's 2014 budget contains a "tax proposals that would raise more than $800 billion over a decade," 15% of which will come from households making less than $200k. (See HERE)  "The non-partisan Tax Policy Center on Monday said poor households making less than $10,000 a year would face an average of $18 more in taxes in 2015 if Obama's budget were enacted. Households making as little as $30,000 a year would pay an average of $61 more in 2015 and $54 in 2023....upper middle class taxpayers making between $100,000 and $200,000 per year will see a 0.2 percent tax increase of an estimated $382 by 2023." (See HERE) 
• Estate Tax: In 2010 it was at zero, and in 2011 it went back up to 55%.(See HERE)
• Cigarette taxes: "One of President Obama’s first acts as President in February of 2009 was to more than double the taxes on tobacco products. This affected about 60 million Americans and disproportionately hurt poor and middle class families." (see HERE and HERE and HERE) And, "policy experts say the budget plan to raise taxes on cigarettes is regressive." (See HERE) Obama's "proposed increase in the tobacco tax would disproportionately affect low- and moderate-income taxpayers, who spend a bigger share of their income on cigarettes than the wealthy." (See HERE)
• Health Insurance and Obamacare: "As the Supreme Court has now authoritatively ruled, the Obamacare individual mandate, requiring workers to purchase the health insurance the government specifies each family must buy, is a tax. And that tax applies to the middle class and working people. CBO estimates that health insurance will cost $15,000 per year on average for families soon after Obamacare is fully implemented, rising rapidly from there. That is the individual mandate tax on the middle class and working people." (See HERE) "Obamacare imposes a penalty—or tax increase—on Americans who do not purchase health insurance. The Congressional Budget Office estimates that most of those paying these taxes are middle-class individuals and families making less than 500 percent of the federal poverty level: $59,000 for an individual and $120,000 for a family of four. Three million lower-income and middle-class Americans will pay an estimated $2 billion in these 'mandate taxes.'” (See HERE) "As shown in the chart above, this new tax – defined as such by the Supreme Court, which ruled it constitutional under Congress’s taxing power – hammers not just the middle class, but roughly 600,000 Americans whose incomes fall below the federal poverty line, according to a recent report from the Congressional Budget Office." (See HERE) "A second anti-consumer tax was found in ObamaCare and it levied a 10% tax on tanning bed services, affecting about 30 million Americans. Obviously, a vast majority of these users fall below the richest 1% and make less than $250,000 per year.,,,,In addition to severely limiting the contribution amounts to Flexible Spending Accounts, Obama also raised the limit where families become eligible to write off medical expenses. This ObamaCare provision increases the write-off threshold by 25% to 10% of adjusted gross income. Not surprisingly, this also almost exclusively affects those making under $250,000...individuals making $200,000 per year will see their Medicare taxes increase by 66%, to 2.35%, while self-employed individuals will pay a Medicare rate of 3.8%." (See HERE)(See also HERE and HERE)

Middle-class individuals and families weren't the only one's to whom Obama made tax promises. He also reached out to small businesses. As a candidate, he said: "I will eliminate capital gains taxes for the small businesses and the start-ups that will create the high-wage, high-tech jobs of tomorrow." (See HERE)

Yet, "'Once again, President Obama has made a major policy speech without offering anything of substance to the real engine of the U.S. economy – small business,' Dan Danner, the president of the National Federation of Independent Business, said in a statement. 'A corporate-only approach to tax reform will ensure that small business shoulders a much greater tax burden than mega-corporations that have been gaming the system for years' Danner said that the vast majority of all small businesses are structured as pass-through entities, so their owners pay taxes at the individual rates. Consequently, those firms would not stand to gain from the president’s concession to lower the corporate rate from 35 percent to 28 percent.
Instead, by lowering the corporate rate and leaving the individual rate untouched, it would put small firms at an even greater disadvantage to large corporations, Danner said." (See HERE) (See also HERE and HERE)

Fox News provides a list of the Top Five Worst Tax Hikes on Small Businesses.

As if that weren't enough, Dan Kish, Senior Vice-President of the Institute for Energy Research, has said regarding regarding the government allowing energy development on federal-controlled lands and water: A pro-growth approach would spin-off revenues that would dwarf those the government is seeking from increased energy taxes. Yet the present administration always seems to turn to taxes as a solution to chronic economic shortfalls…a failed strategy with exactly opposite consequences." (See HERE)

So, another Leftist LUNC of Obamanomics was that the middle-class and poor and small businesses were told one thing about taxes, only to receive the opposite.

[Update 08/30/15: Obama's Promises on Taxes, How they are Holding Up]

[Update 11/11/2015: Shhhh...Liberals Want this Kept Secret, The date in the meme below should read 2013.]

See this video: HERE

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For an explanation as to why this Leftist LUNC has occurred, please see: Gov: Wrong Tool for the Right Job - Strength in Numbers and Cold Nanny,, and  The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting, The Politics of Spending--Intro, The Politics of Spending--Debt, The Politics of Spending--Public vs. Private, The Politics of Spending--Crony-ism, The Politics of Spending--Education, and The Politics of Taxing the Rich. [the unlinked topics will be posted later as they are completed]

Obamanomics--Poverty

Liberals in general, and President Obama in particular, have long had a soft-spot in their hearts for the poor.

I respect this immensely, and share their concern.

Following the passage of the "stimulus package" in February of 2009, President Obama promised that the package would lift 2 million people from poverty. (See HERE)

Who wouldn't have wanted to see that happen?

However, the following year this was reported: "2010 U.S. Census data...showed that 46.2 million Americans were living in poverty. Worse still, child poverty has increased, rising to 21.6 percent. Many middle class Americans, unable to find work or decent wages, have fallen below the poverty line in recent years. It's the most tragic cost of this prolonged economic nightmare." (See HERE) "The poverty rate in 2010 was the highest poverty rate since 1993." (See HERE and HERE) This occurred in spite of: "Demos estimates that 40 million Americans were kept out of poverty due to food stamps, the Earned Income Tax Credit, Medicaid, and other programs in 2010." (See HERE) "In 2010, 46.2 million people in the US were living in poverty and the nation’s official poverty rate was 15 percent, up from 14.3 percent in 2009, according to the US Census Bureau. That figure appears to be the highest number seen in the 52 years for which poverty estimates have been recorded." (See HERE)

Two years after President Obama promised to take 2 million people off the poverty rolls, things didn't improve. "In 2011 extreme poverty in the United States, meaning households living on less than $2 per day before government benefits, was double 1996 levels at 1.5 million households, including 2.8 million children. This would be roughly 1.2% of the US population in 2011." (See HERE)

The last year of Obama's first term wasn't any better. "In November 2012 the U.S. Census Bureau said more than 16% of the population lived in poverty in the United States, including almost 20% of American children...Poverty rates remain high among children in the United States and continue to affect their health, education and safety, a new federal report shows. 'Nearly a quarter of children in the United States are living in poverty.'" (See HERE)

To summarize, in 2009 there were 43.6 million people in the U.S. living below the poverty level, or 14.3 percent of the population. (See HERE)  Whereas, in 2012, "there were nearly 50 million Americans, more than 16 percent of the population...struggling to survive." (See HERE)

By my calculation, this means that instead of the 2009 "stimulus package" lifting 2 million people out of poverty as promised by President Obama, there was the Leftist LUNC where greater than 6 million more people fell into poverty during his first term. (See HERE and HERE and HERE) And, poverty is poised to rise to its highest level since the 60's. (See HERE)

Or, in shorts, Obamanomics resulted in Trickle-Up Poverty.

[Update 7/26/15: Three Million More Children in Poverty Under Obama]

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For an explanation as to why this Leftist LUNC has occurred, please see: Gov: Wrong Tool for the Right Job - Strength in Numbers and Cold Nanny,, and  The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting, The Politics of Spending--Intro, The Politics of Spending--Debt, The Politics of Spending--Public vs. Private, The Politics of Spending--Crony-ism, The Politics of Spending--Education, and The Politics of Taxing the Rich. [the unlinked topics will be posted later as they are completed]

Obamanomics--Food Stamps

Work-related entitlements aren't the only welfare programs to proliferate because of the down economy and Obamanomics.  Under Obama, food stamp enrollment--or Supplimental Nutrition Assistance Progream (SNAP)--jumped 70 percent (see HERE ), adding 11.133 recipients a day (see HERE), going from 26.3 million in 2007 to around 45 million in 2011. (See HERE and HERE)  The increase during Obama's four years in office was greater than during the eight years of the Bush presidency. (See HERE)

Coincidence?

It is expected that the rate of food stamp usage would increase during hard economic times like what the U.S. has experienced over the last four years. However, the rate of increase seems disproportional to other economic factors. According the the Bureau of Labor Statistics, the unemployment rate has been dropping since the middle of 2009 (see HERE and HERE), while the number of food stamp recipients and average benefits per person has gone up. How can that be?

Apart from what I explained HERE about how unemployment figures can hide negative economic factors, there may be other things contributing to the alarming rise in food stamps.

It is one thing to feed the hungry when they are really in need. This is commendable.

However, it is a whole other thing to actively encourage people, including illegal aliens, to take advantage of the food stamp program, making it all the more vulnerable to abuse (see HERE and HERE and HERE and HERE and HERE), and this when the nation has high unemployment, declining workforce, and is struggling and can't afford to pay for but two-thirds of what it has already committed to, not to mention that the SNAP program doesn't work to curb hunger (see HERE) and is wrought with problems (see HERE).

Yet, such is the Leftist LUNCs of Obamanomics. (see HERE and HERE and HERE and HERE and HERE) The alarming rise in food stamps is, in part, due to the Obama administration fomenting government dependency rather than self reliance, and using food stamps as a handout to get elected.

Were that not inane enough, according to former Speaker, Nancy Pelosi, "the program’s multiplier effect –the amount of money generated in the local economy as the result of the subsidy– far exceeds the nearly $60 billion spent this year by the federal government and is a sure-fire way to stimulate the economy. For every dollar a person receives in food stamps, Pelosi said that $1.79 is put back into the economy. The U.S. Department of Agriculture cites an even higher figure of $1.84...It is the biggest bang for the buck when you do food stamps and unemployment insurance. The biggest bang for the buck." (See HERE and HERE) The Obama white house concurs. (See HERE)

If the gentle reader is a perplexed as I am by the pretzel or inverted logic, you are not alone. If common sense doesn't immediately reject the notion that increased unemployment and entitlements is good for the economy and jobs (were that the case, we should all quite work and go on food stamps and really turn the economy around), then the following statistic should settle the issue: during Obama's first term as president, the explosion of food stamps was 10 to 75 time the rate of job creation (see HERE and HERE),  Also, consider the following (via Zero Hedge): "Since [President Obama’s] inauguration, the US has generated just 841,000 jobs through November 2012, a number [that] is more than dwarfed by the 17.3 million new [food stamps] and disability recipients added to the rolls in the past 4 years." (reported HERE)

Surprised?

Here is a Fox News video on the subject: Food Stamp Outrage

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For an explanation as to why this Leftist LUNC has occurred, please see: Gov: Wrong Tool for the Right Job - Strength in Numbers and Cold Nanny,, and  The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting, The Politics of Spending--Intro, The Politics of Spending--Debt, The Politics of Spending--Public vs. Private, The Politics of Spending--Crony-ism, The Politics of Spending--Education, and The Politics of Taxing the Rich. [the unlinked topics will be posted later as they are completed]

Obamanomics--Disability Claims

As mentioned  in the Leftist LUNC on Unemployment, Jobs, and Workforce, as well as in the intro to Obomanomic on Trickle-up Poverty, the President and his liberal supporters have had the commendable intent of getting Americans back to work and the economy growing. Who would argue with that?

However, rather than employing more people, disability awards have spiked by 10% in 2009 over the previous year.(See HERE) And, during the first six months of 2012, more people applied for disability benefits than the entire year for 1998--"the number of workers on disability has climbed by more than 1.1 million since June 2009, a 15 percent increase."(See HERE)

In terms of hard numbers, during Bush's first term, more than 3 million people were awarded disability benefits as compared with more than 4 million during Obama's first term. This is a difference of more than 1 million people (33% increase). (See HERE) 

Granted, the number of awards granted has actually decreased in the last two years, where before they had been steadily climbing, including during the Bush years. (ibid) And, the proportion of awards to applicants was lower during the Obama administration than with Bush (average of 42% for Bush compared with only 35% for Obama), which suggests that the Obama administration may have been more stringent and less inclined to award disability benefits than Bush--though the award ratio has steadily declined since Clinton closed out his second term. (ibid.) 

However, there is still the disconcerting fact that when Bush left office, there were a total of 7.4 million people receiving disability benefits, and at the end of Obama's first term there were 8.8 million. So, the number of awards may be on the decline, but the number of people receiving payments over the long haul have continued to increase.

Putting things into perspective, "Since [President Obama’s] inauguration, the US has generated just 841,000 jobs through November 2012, a number [that] is more than dwarfed by the 17.3 million new [food stamps] and disability recipients added to the rolls in the past 4 years." ( Zero Hedge, as reported HERE)

More disturbing still, according to CNN: "All told, the federal government spent nearly $250 billion in 2011 paying more than 23 million Americans some type of disability claim. That's about 7% of the overall population, and 16% of the workforce. Those numbers don't even include people out on worker compensation claims -- which are mostly paid for by private companies. Five states also offer short term disability, and there are nearly 1 million workers receiving private disability insurance."(See HERE)

A Forbes article points out regarding the skyrocketing disability payouts, "While part of that growth can be explained by the aging of the U.S. population, the largest factor in the proliferation of disability spending comes from the fact that Congress has dramatically expanded the definition of who gets called 'disabled.' As a result, many able-bodied Americans have been granted government paychecks for life, crowding out our ability to direct needed resources to the genuinely infirm."(See HERE)

Another explanation for the growth in disability payouts, and one that also relates to the decline in workforce participation rates mentioned in a previous article, "discouraged workers are increasingly dropping out of the labor force. While the number of people with jobs has climbed 2.7 million since June 2009, the pool of Americans who aren’t in the labor force at all has shot up by 7.5 million. A great many of these people will likely never come back to the workforce even if the economy does rebound: not because they’ve aged into retirement but because they’ve signed up instead to get disability benefits — joining the federal government’s Social Security Disability Insurance (SSDI) program." (See HERE)

To an extent, disability insurance has become a longterm replacement for unemployment insurance.

Thus, one of the Leftist LUNC of Obamanomics is that instead of putting more people to work as promised, it has inadvertently created costly incentives for less and less people to work, and thus less and less people to pay for the costly incentives not to work.

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For an explanation as to why this Leftist LUNC has occurred, please see: Gov: Wrong Tool for the Right Job - Strength in Numbers and Cold Nanny,, and  The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting, The Politics of Spending--Intro, The Politics of Spending--Debt, The Politics of Spending--Public vs. Private, The Politics of Spending--Crony-ism, The Politics of Spending--Education, and The Politics of Taxing the Rich. [the unlinked topics will be posted later as they are completed]

Obamanomics--Debt

Given that Barak Obama decried as "unpatriotic" the $4 trillion in debt accumulated by George W. Bush during the 8 years he was in office, it made sense that candidate Obama would pledged to cut the federal deficit in half before the end of his first term. (See HERE and HERE and HERE).

And, early in his first term, "President Barack Obama promised to get serious about reducing debt and deficits: 'We’ve got to spend some money now to pull us out of this recession. But as soon as we’re out of this recession, we’ve got to get serious about starting to live within our means, instead of leaving debt for our children and our grandchildren and our great-grandchildren.'” (The White House, 2/12/09, as reported HERE)

The recession supposedly ended in 2009. (see HERE)

Later, during his second run for the presidency, Obama also said he wanted to balance the budget (see HERE and HERE).

His intents were admirable.

However, according to these figures, when Bush took office in 2001, the national debt was about $6 trillion, and when he left office, it was around $10.7 trillion, which means that over the 8 years he was in office, he amassed about $4.7 trillion in debt, and averaged about $587 billion in deficits each year. Whereas, from 2009 to 2013 (Obama's first term), the debt rose to about $16.4 trillion, meaning that in just 4 years Obama amassed $5.7 trillion in debt, and averaged about $1.4 trillion each year. In other words, Obama's deficits more than doubled those of Bush. Obama ran up a trillion dollars more in debt in 4 years than Bush ran up in 8 years.(see also HERE and HERE and HERE and HERE and HERE)  So, if Obama thought that raising the debt $4 trillion in 8 years was "unpatriotic," what do you suppose that means when he raised the debt over $5 trillion in four years?

Granted, some of the deficits accumulated during the Obama years are attributable to Bush policies and budgets (see HERE and HERE and HERE)  Yet, even after making the necessary adjustments, and using figures from the "White House's Office of Management and Budget...Bush ran up an average of $410 billion in deficit spending per year, while Obama has run up an average of $1.413 trillion in deficit spending per year — or $1.003 trillion a year more than Bush." (See HERE)

And, while federal budget deficits have started to shrink (see HERE and HERE), Maya MacGuineas claims "it is only temporary...The long-term situation, however, remains as dismal as it’s been.”(see HERE) According to CBS News, "The federal budget sent to Congress last month by Mr. Obama, projects the National Debt will continue to rise as far as the eye can see. The budget shows the Debt hitting $16.3 trillion in 2012, $17.5 trillion in 2013 and $25.9 trillion in 2022." (See HERE)  Obama's 2014 budget alone will add $5.2 trillion in deficits over the next 10 years. (see HERE)

Again, worse yet, Obama's green energy policies have squelched the opportunity for generating considerable revenue that could improve the economy and help offset some of the national debt. According to Dan Kish, Senior Vice President of the Institute for Energy Research, indicates: "In fact, annual revenue collections for sales and leases, royalties, and rentals on federal government lands are down over $12 billion per year since 2008. And that is just the direct revenue. It doesn’t include revenues from increased economic activity. If the government would just allow further exploration on federally-controlled lands and waters, that would add somewhere between $24 billion to $85 billion more per year. A recent Louisiana State University and Wharton study conducted for the Institute for Energy Research estimated that simply allowing access to these areas would create between 552 thousand and nearly two million additional jobs over the next 37 years. It would also generate an estimated $2.7 trillion in additional revenue over that same time period." (See HERE)

Again, the Leftist LUNC here is that instead of balancing the budget as promised, Obama has ballooned the national debt.

[Update 08/12/2015: Federal Taxes Set Record Through July--$17,955.00 Per Worker, Fed Still Run $465.5 Billion Deficit. The Debt is now above 19.6 Trillion (see HERE)]

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For an explanation as to why this Obamanomic Debt LUNC occurred, see: Gov: Wrong Tool for the Right Job -Strength in Numbers as well as The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting, The Politics of Spending--Intro, The Politics of Spending--Debt, The Politics of Spending--Public vs. Private, The Politics of Spending--Crony-ism, The Politics of Spending--Education, and The Politics of Taxing the Rich. [the unlinked topics will be posted later as they are completed]

Obamanomics--Unemployment, Jobs, and Workforce

Since 2008, President Obama has made a number of encouraging and praise-worthy promises about unemployment and jobs. I will look at each separately and then combined, keeping in mind that while the President's intents have been admirable, his performance is what matters.

Unemployment:

In 2008, Obama officials predicted that unemployment wouldn't rise above 8%. (see HERE and HERE and HERE) According to the National Review Online, "By the end of 2010, he [Obama] promised, unemployment would have dropped to 7.25 percent. Furthermore, White House economists forecast that without ARRA spending, the unemployment rate would increase from 7 percent to 8.8 percent." The Obama administration also intimated that the so-called "stimulous package" (ARRA) would reduce unemployment to nearly 6% by the end of his first term. (See HERE and HERE and HERE and HERE),

However, even though unemployment conveniently dropped slightly below 8% a month or so before the 2012 presidential election (see HERE), based on faked report (see HERE and HERE and HERE), it was two years later and more than 2% higher than promised, and it had previously risen above 8% and remained above that benchmark level for 43 months, reaching as high as 10% in 2009. (ibid)

Hidden beneath these numbers are the depressing statistic on longterm unemployment.  John Merline points out that: "As of July 2012, there were 811,000 more long-term unemployed than when the recession officially ended in June 2009, and there were 412,000 more who had given up looking for work." (See HERE) "

On the positive side, in July of 2013, "the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 4.2 million. These individuals accounted for 37.0 percent of the unemployed. The number of long-term unemployed has declined by 921,000 over the past year." (See HERE) And, the unemployment rate was 7.4%, down from 7.6 in June. (See HERE)

More depressing still, the unemployment numbers that are typically reported don't represent actual unemployment rates (see HERE). Depending upon what is factored into the unemployment equation, the real unemployment rate ranges between 11 to 29%. (See HERE and HERE and HERE and HERE and HERE)

Also, the unemployment numbers account for everyone who is gainfully employed, whether part-time or full time, low income or high, and this on a one-to-one basis. This means that even though full-time, high-paying jobs may have been lost in droves, unemployment will still show as dropping when more part-time, low-paying jobs are created. As such, a decline in unemployment may mislead people to think the economy is improving when it may actually be getting worse.

According to Tyler Durden, in an article published in November of 2012, the "number of part-time people employed for economic reasons soared by 582,000 to 8,613,000, the most since October 2011, and the largest one month jump since February 2009." (See HERE) "Back in December 2010 he wrote: 'It is surprising that over the past several years very little has been said in the popular media about the fact that America is slowly but surely transforming from a full-time to part-time employed society.'...Durden looked at last week’s BLS report and found something the media totally ignored: Of the nearly one million jobs the economy has created since the first of the year, only 222,000 of them were full-time. Put another way, three out of four jobs created since January 1 have been part-time." (See HERE)

This may be particularly problematic for baby boomers, though some analysts are seeing a positive spin. (See HERE)

The good news for 2013 is, "The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged at 8.2 million in July [which is 400k less than the previous year]. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job." (See HERE)

Experts believe that the transformation towards part-time workers may have been spurred, in part, by another Obama policy--specifically, the employer mandates of Obamacare. (See HERE and HERE and HERE and HERE and HERE)

Jobs

Over the last half-decade Obama has made a number of general statements about jobs, not the least of which was: "Jobs must be our number-one focus" (see HERE and HERE) and  "I will not be satisfied until everyone who wants a good job, are offered some security, has a good job." (ibid)

This is great as intents go.

He has also been quite specific. In 2008, candidate Obama committed to creating 2.5 million new jobs by 2011. (See HERE and HERE and HERE and  HERE) "In 2009, President Obama promised that the American Recovery and Reinvestment Act [ARRA] would 'create or save' 3.5 million jobs over the next two years." (See HERE)  He has since pledged to create 7 million new jobs (see HERE), five million of which would be green jobs, and this by the end of the decade (see HERE and HERE).  And,  U.S. News reported, "Obama promised the stimulus would not only have a large impact but also an immediate impact. Said the president-elect, 'I'm confident ... our 21st century investments will create jobs immediately,' adding, 'We've got shovel-ready projects all across the country.'" Furthermore, he intimated that he “will create good jobs that pay well and can’t be shipped overseas.” (“Remarks By The President And The Vice President On The American Recovery And Reinvestment Act,” 4/13/09, as reported HERE)

Yet, based on Bureau of Labor Statistics, between 2009 and 2010, there was a net loss of more than 4 million jobs. And, even if you add in 2011, there was still a net loss of nearly 2 million jobs.

As for the jobs coming immediately and shovel-ready, in his own words, “[M]r. Obama reflects on his presidency, admitting that he let himself look too much like ‘the same old tax-and-spend democrat,’ realized too late that ‘there’s no such thing as shovel-ready projects…’” (Michael D. Shear, “President Obama Looks Forward – And Back,” The New York Times’  “The Caucus” Blog, 10/13/10, as reported HERE)

“The green jobs subsidy story gets more embarrassing by the day. Three years ago President Obama promised that by the end of the decade America would have five million green jobs, but so far some $90 billion in government spending has delivered very few.” ( The Wall Street Journal, 10/11/11, as reported HERE) (See also HERE and HERE and HERE and HERE)

[Update 8/17/2015: Green Jobs in California] {Update 8/19/2015: 'Clean Energy Jobs Act' Did Little But Enrich Consultants]

Worse yet, Obama's green energy policies have prevented job creation and squelched the opportunity for generating considerable revenue that could improve the economy and help offset some of the national debt. According to Dan Kish, Senior Vice President of the Institute for Energy Research, indicates: "In fact, annual revenue collections for sales and leases, royalties, and rentals on federal government lands are down over $12 billion per year since 2008. And that is just the direct revenue. It doesn’t include revenues from increased economic activity. If the government would just allow further exploration on federally-controlled lands and waters, that would add somewhere between $24 billion to $85 billion more per year. A recent Louisiana State University and Wharton study conducted for the Institute for Energy Research estimated that simply allowing access to these areas would create between 552 thousand and nearly two million additional jobs over the next 37 years. It would also generate an estimated $2.7 trillion in additional revenue over that same time period." (See HERE)

"Finally, the president should announce today that he's going to reverse his decision on the Keystone XL pipeline. This pipeline would produce 20,000 construction jobs and 100,000 indirect jobs, and it would provide a much-needed transportation line between oil refineries along our Gulf Coast and production facilities in Canada, not to mention the booming Bakken oil fields of Montana and North Dakota. Our friends to the north have been reliable and steadfast trading partners, and the president should be making this pipeline decision on policy grounds instead of cheap political appeals to his liberal base." (See HERE)

About jobs not being shipped overseas, the "Stimulus Projects Created Thousands Of Jobs In China. 'A Chinese company called A-power is helping to build a massive $1.5 billion wind farm in West Texas. The consortium behind the project expects to get $450 million in stimulus money.  Walt Hornaday, an American partner on the project, said it would create some American jobs. ‘Our estimation,’ he said, ‘is that we are going to have on the order of 300 construction jobs just within the fence of the project.’ But that’s in addition to 2,000 manufacturing jobs — many of them in China.'” (ABC News, 2/9/10 as reported HERE)  And, "ABC News report: eight out of every ten dollars spent on green stimulus projects going to foreign firms, Sen. Schumer admits it is a problem. (ABC News, “Green Stimulus Jobs Go To China,” 2/9/10 as reported HERE) (See also HERE and HERE and HERE and HERE)

According to Forbes, "During the campaign, we’ve heard the President say that, during his administration, 5 million new jobs have been created. Actually, the correct figure is 4.8 million. However, this calculation eliminates all months in which jobs were lost. In other words, it only counts months in which job creation was positive and eliminates the negative months." (See HERE) When the negative months are added in, the net new jobs created during Obama's first term was 194,000, or an average monthly rate of 4,311. (ibid)

Putting this somewhat in perspective using even the inflated jobs numbers: "Since [President Obama’s] inauguration, the US has generated just 841,000 jobs through November 2012, a number [that] is more than dwarfed by the 17.3 million new [food stamps] and disability recipients added to the rolls in the past 4 years.(See Zero Hedge, as reported HERE)

And, just as unemployment figures hide certain realities, job reports don't tell the whole story. All they indicate is an estimation of people newly employed during a given month by the surveyed businesses. (See HERE) Neither the unemployment figures or the jobs reports give a full or accurate picture of what has happened with the entire workforce and how it has impacted the national economy and public policy.

Workforce

To me, the more telling statistic is the overall workforce participation rate, which calculates the proportion of the working-age population (older than 16) who are actively working. Under Obamanomics and other Leftist policies, not only has jobs shifted from the private to the public sector at the cost of trillions of dollars (see HERE), and from full-time to part-time, but the workforce participation rate declined to its lowest levels since 1979 (see HERE and HERE)--and this not because of retiring baby-boomers as some have mistakenly supposed (see HERE), but, among other reasons, as a result of bad economic policies and slow growth. (see HERE)  The labor force participation rate peaked in 2000 at 67.3 percent, and as of May 2013, it was down to only 63.4 percent. (See HERE and HERE) "Total employment fell for two years straight, from a peak of 138 million workers in Jan. 2008 to a low of 129 million workers in Feb. 2010." (See HERE) As of June of 2013, only about 145 million people, or less than 50% of the U.S. population, were actively working to one degree or another. (See HERE and HERE) In July, the labor force participation rate was 63.4 percent, down from 63.5 in June. (See HERE)

In other words, because of Obamanomics, less and less people were working in either the public or private sector. Instead of putting more people to work as promised, Obamanomics caused the opposite Leftist LUNC to occur.

To make matters worse, as mentioned above, a growing portion of the workforce is part-time. So, not only are less and less people working, but those who are working are working less hours.

The significance of this is that with fewer people working, and fewer people working full time to pay government expenses and entitlements, and because of Obamanomics, more people were and are now collecting work-related entitlements and increasing government expenses, and thus expanding government. With unemployment on the rise, the draw on unemployment insurance jumped from around $40 billion in 2008 to over $150 billion in 2010 (See HERE and HERE and HERE), and has cost nearly half a trillion dollars since Obama took office. (See HERE)

And, instead of covering the jobless for just 25 weeks as originally legislated (see HERE), thus giving people enough time to find work without becoming complacent, Obama and the Democrat congress extended unemployment benefits up to as much as 99 weeks, leading some analyst to view the extension as an incentive to leave work and a disincentive to find work. (See HERE and HERE and HERE)

The irony is that the extension promised to produce 300,000 jobs, yet, as one author put it "Today, the Congressional Budget Office released a report informing readers that extending unemployment benefits for a year, an outlay which would cost the federal government $30 billion, would, because of its allegedly stimulative impact, generate 300,000 jobs. Even if true, neither the CBO, nor the Associated Press in covering the report, noted that this result works out to a cost $100,000 per job. Bravely assuming that each new job created pays $40,000 per year, that's a $60,000 loss in value received compared to money spent. The government's tax take at all levels on that amount of earnings is likely about $10,000 or so." (See HERE)

In short, the Leftist LUNC here is that there are less and less people working, and working less and less hours, to pay for more and more people to receive unemployment benefits that inadvertently encourage less and less people to work and keep jobs to pay for said benefits.

[Update 08/08/2015: According to the Bureau of Labor Statistics, a record 93.8 million Americans, or 37.4% of the U.S. population are out of the labor force. This is up 144,00 people from the previous record one months earlier. (see HERE and HERE) The vast majority of those not working, are women. (see HERE). To make matters worse for the female labor force, all the supposed gains in employment since the recession in 2008, have been lost to foreign workers. (see HERE). See also this article3 on Obama's Unemployment Numbers are Bogus, and Here is the Proof]

[Update 09/07/2015: Workforce Participation Rate Stuck at 38-Year Low for 3rd Month in a Row, I also update the unemployment and jobs numbers HERE]

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For an explanation of why these Leftist LUNCs may occur, please see: Gov: Wrong tool for the Right Job:  Strength in Numbers, Cold Nanny, and The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting. Other explanations will be added as they are posted.

Obamanomics--Divide Between Rich and Poor

As mentioned previously, one of the key planks of Obamanamics was to shrink the financial disparity between the rich and poor. (see HERE and HERE)  In certain respects this is an admirable goal.

Investors.com reported that: "When President Obama first ran in 2008, he claimed his economic policies would 'foster economic growth from the bottom up and not just from the top down.' He said he'd put in place 'an immediate rescue plan for the middle class' and would end the 'tired, worn-out, trickle-down ideologies we've been seeing for so many years.'"(See HERE)

The results of Obamanomics, however, have been just the opposite. Up until 2009, the poor and middle class and rich were all getting richer. (See HERE and HERE) Yet, after 2009 (Obama's first year in office) the very rich got somewhat richer but everyone else got poorer. (See HERE and HERE and HERE and HERE and HERE)(More recent data HERE and HERE and HERE)

[Update: In December of 2013, the President continues to decry income inequality as though he isn't part of the problem. (See HERE and HERE)]

So, the Leftist LUNC of Obamanomics here has been the increase in income inequality.and escalation of the "...injustice of the growing divide between Main Street and Wallstreet..." (see HERE), or in other words "trickle-up poverty." (See HERE)

Ironically, various Obama and liberal policies have undeniably contributed to the expanding income divide and disadvantaged the poor most of all. The so-called "stimulus package" shifted jobs from the higher-paying private sector to lower-paying public sector, and through expanded entitlements, it encourage people to stop looking for work or quite working and earning an income, and instead collect unemployment or longterm disability pay. (See HERE)  The enactment of Obamacare, with its employer mandates, have forced a number of companies to avoid debilitating insurance costs by cutting back on the hours of low-level workers, making them part-time, which has negatively impacted the annual wages of the poor and lower-middle-class. (ibid and HERE)

[Update 10/26/2015: "1 in 2 Workers Make Less Than $30,000 a Year]

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For an explanation as to why Obamanomic LUNCs occur, see: Gov: Wrong Tool for the Right Job - Introduction and Cold Nanny as well as The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting

Obamanomics--Intro--"Trickle-Up Poverty"

Before getting into the Obamanomic LUNCs, it is only fair to note that prior to Obama taking office, the housing bubble had burst, major financial institutions were going belly-up, other industries were on the verge of collapse, and the economy had slipped into what some considered the worst recession since the Great Depression. (See HERE and HERE and HERE)

And, at the time there was enough blame to go around, though since the economic collapse occurred on Bush's watch, he was obliged to shoulder the lion's share.

Certainly, then Senator Obama ought not be faulted in any significant way for creating the financial mess, though given his campaign promises that led to his election as President, and the responsibility he willingly took on by being elected, he should rightly be held accountable for how he has dealt with the mess since then.

And, it wasn't as though Obama didn't know what he was up against: "Here’s the problem: If you go back and examine the record, you’ll find that Obama was fully aware of the depth and severity of the recession. As a candidate, for example, he said we were facing 'the worst financial crisis since the Great Depression.' As president-elect, Obama said we faced 'a crisis unlike any we have seen in our lifetime.' Prior to being sworn in, Obama knew—in fact, he went out of his way to warn us—that we were shedding more than half a million jobs per month, the worst job loss in over three decades. That in 2008 we had lost more jobs than in any year since the Great Depression. That manufacturing had hit a 28-year low. That the stock market had fallen almost 40 percent in less than a year. That credit markets were nearly frozen. That businesses large and small couldn’t borrow the money they needed to meet payroll and create jobs. That home foreclosures were mounting. That credit card and auto loan delinquencies were rising. That the economy was 'in a global crisis.' And that he was inheriting an 'enormous budget deficit—you know, some estimates over a trillion dollars. That’s before we do anything.” (See HERE)

Besides, at a townhall meeting in December of 2009, Obama said, "I promise you this, I won't rest until things get better...I didn't run for president to sweep our messes under the rug." (See HERE). In February of 2010 he remarked, "We will leave our children an economy that is stronger and more prosperous than it was before." (See HERE)

It should also be noted that most people, including those on the Left, desired to have a healthy, thriving, and growing economy, and wished to recover quickly from the financial woes. 

With that having been said, Obama's plan for achieving his lofty economic objectives was generally laid out on his web site, "An Economy Built to Last," and it can be summarized as: tax the rich, spend, and educate our way to job-growth and mutual and lasting prosperity.
 
Hidden somewhat beneath his plan, particularly in relation to shrinking the gap between rich and poor, has been Obama's belief in the redistribution of wealth, or as he calls it: "spreading the wealth around" (see HERE and HERE and HERE and HERE) and "leveling the playing field," which he has attempted to realize through, among various things, taxing the rich (see HERE and HERE and HERE) and raising minimum wage (see HERE and HERE), etc.

[Update 8/9/2015: Here is another perspective: What Democrats Get Wrong about the Middle Class]

In short, as will be demonstrated in the LUNCs to follow, and in the minds of some conservatives, Obamanomics can be described as "trickle-up poverty" (see HERE and HERE), with a short shelf-life rather than "An Economy Built to Last."

In simple terms, here is how "trickle-up poverty" works:

In an attempt to close the gap between rich and poor and produce so-called "income equality," the government unequally takes from rich and gives to the poor. In the short-run, this makes the rich poorer and the poor richer--a zero-sum gain or loss. However, in the long-run, it makes the rich poorer and the poor poorer in at least two respects:

First, by compulsory taking from the rich and making them poorer, this essentially punishes economic success. And, by giving to the poor and making them richer, this essentially rewards economic failure.  In some respect and to an extent, psychologically this creates a disincentive for economic success and an incentive for economic failure. This is upside-down from how things rationally work in economics, and it caters to the lowest economic denominator, which in turn may affect "trickle-up poverty."

This principle is born out by the so-called welfare mentality or culture of dependency, and by the panhandlers who prefer to stand on street corners taking handouts rather than getting a real job and earning a living. It can also be seen in the way that unemployment benefits may inadvertently prevent people for taking certain jobs. (See also my article on Unemployment, Jobs, and Workforce)

Second, by taking valuable economic resources from the rich and those who, for the most part, have proven their economic abilities, and then giving them to those who, for the most part, have proven their economic inability, this is likewise upside-down from rational economics, and the inverse of the Parable of the Talents.

Metaphorically speaking, if a rich person has demonstrated the ability to double her five talents, and if one of those talents is taken away and given to a poor person who buries or spends the talent, the net average result is that all parties are worse off--i.e. "trickle-up poverty" Had the rich person retained the talent, the number of talents produced by both parties would have been five, making a total of ten talents between them; whereas, by taking the talent away from the rich and giving it to the poor, the number of talents produced by both parties would have been four, making a total of eight between them, leaving the rich person two talents poorer than had she retained the one talent, and leaving the poor person just as poor, with no talents.

Literal examples of this principle can be seen in the bankruptcy plaguing once thriving leftist cities and nations like Detroit and Greece, etc., as well as floundering economies throughout Europe, England, and Japan.

[Update 08/30/15: Obama's Promises on the Economy, How They are Holding Up]

See also Obamanomics:

• Divide Between Rich and Poor -Obamanomics has caused the gap to widen.
• Unemployment, Jobs, and Workforce -Because of Obamanomics, "there are less and less people working, and working less and less hours, to pay for more and more people to receive unemployment benefits that inadvertently encourage less and less people to work and keep jobs to pay for said benefits."
• Debt -Is Obama condemned as "unpatriotic" by his own standard? Yes.
• Disibility Claims -"While the number of people with jobs has climbed 2.7 million since June 2009, the pool of Americans who aren’t in the labor force at all has shot up by 7.5 million. A great many of these people will likely never come back to the workforce even if the economy does rebound: not because they’ve aged into retirement but because they’ve signed up instead to get disability benefits."
• Food Stamps Using even the most flattering job statistics, "during Obama's first term as president, the explosion of food stamps was 10 to 75 time the rate of job creation."
• Poverty -"Instead of the 2009 'stimulus package' lifting 2 million people out of poverty as promised by President Obama...greater than 6 million more people fell into poverty during his first term." 
• Taxes -Promises made to the middle-class and poor and small businesses, were broken promises.
• Income and Minimum Wage - More broken promises and the economy made worse

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For an explanation as to why Obamanomic LUNCs occur and reoccur, see: Gov: Wrong Tool for the Right Job - Strength in Numbers, The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting, The Politics of Spending--Intro, The Politics of Spending--Debt, The Politics of Spending--Public vs. Private, The Politics of Spending--Crony-ism, The Politics of Spending--Education, and The Politics of Taxing the Rich. [the unlinked topics will be posted later as they are completed]