The Economic Blues

The economic forecast for the United States is not exactly sunny.  The May jobs report indicates that employers are hiring at a restrained pace as they still feel uncomfortable hiring due to the weak economy.  Though May’s jobs numbers were a slight improvement on April’s, 175,000 from 149,000 respectively, May’s jobs growth falls in line with average job growth over the past three years.

The unemployment rate shows an “economy running in place,” explains Heritage’s James Sherk.  And to boot, millions of Americans have left the labor force altogether, and there are few signs that they will return any time soon.  This makes unemployment numbers look smaller:

The fact that unemployment rose but the employment-to-population ratio did not rise illustrates a larger problem facing the economy: While unemployment has dropped, the proportion of Americans with jobs has scarcely increased since the recession ended. Unemployment looks better only because millions of Americans are no longer looking for work and thus do not count as unemployed.

The economic picture is entirely unimpressive. 

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President Obama Uses His “Economic” Plan to Divert Attention Away from IRS and Benghazi Scandals

When you think about what President Obama has done – and will continue to do to our economy – you have to laugh.  If you don’t laugh, you will cry really, really hard.

Cry Crying Economy Obama

 

Here’s why.  Heritage breaks it down in great detail.  

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Morning Action: Leftist Failures in Healthcare, Immigration, and the Economy

IMMIGRATION.  The Senate immigration bill has similarities to Obamacare that make it just as bad for America as the President’s healthcare law – it comes with extreme costs and false promises; unelected bureaucrats are given too much power; it’s full of perks for special interests; and it piles on already broken promises.   Heritage explains:

Congress rammed Obamacare through without many Members even reading the bill. Now it’s applying that same frantic, complex, pie-in-the-sky legislating to immigration. The similarities are frightening.  

SEQUESTER.  House Democrats are developing a plan to repeal the sequester entirely, rather than unraveling it with a series of targeted bills.  They want a comprehensive approach to repeal and cite concerns with what they consider to be vital domestic programs… like the failed Head Start program (sub. req’d):

“Cancer patients who are losing access to care, seniors who are losing Meals on Wheels, children who can’t go to Head Start, the 400,000 long-term unemployed in California whose benefits are being cut, low income mothers with newborns who are losing nutritional assistance — they need a fix for sequester, too,” [Barbara Lee (D-CA)] said.

The House’s top Democrats, including Minority Leader Nancy Pelosi of California, Minority WhipSteny H. Hoyer of Maryland and Budget Committee ranking member Chris Van Hollen of Maryland, share that view. All three have been urging House Republicans to agree to a conference on the competing fiscal 2014 budget resolutions (H Con Res 25, S Con Res 8).

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Morning Action: With Obama, Things Have Gone from Bad to Worse

SEQUESTER.  In the name of doing things “the fair way,” the White House is still demanding revenue to replace the sequester (sub. req’d):

The White House is clinging to its faltering sequester strategy even after announcing last week that President Barack Obama will sign a revenue-free fix to stop furloughs at the Federal Aviation Administration.

Press Secretary Jay Carney reiterated Monday that the White House is still demanding revenue as part of a broader sequester deal.

“It is the wrong way to reduce our deficit or eliminate the sequester by simply saying, ‘You know what, we’ll just ask seniors to deal with it. We’ll hold harmless millionaires and billionaires.’ … That’s not the way this can happen,” he said. “It’s not the fair and right way, and it’s not good policy, and that’s why the president insists that we need to do this in a balanced way.”

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But Where Have All the Jobs Gone?!

Before you rush to celebrate last month’s unemployment rate that ticked down to 7.6 percent from 7.7 percent, consider what has happened to labor force participation.  The labor force participation rate fell to 63.3 percent, its lowest level since 1979.  In fact, Austan Goolsbee, former chair of President Barack Obama’s Council of Economic Advisers, called the March jobs report a “punch to the gut.”

Of course, the White House is singing the same old tune: it’s the sequester’s fault!  But Heritage Foundation experts predicted this reaction last month when they explained:

Looking ahead, policymakers need not fear slower job growth due to the recent sequestration, which will force the federal government to cut $85 billion in budget authority this year. That will slow the growth of 2013 spending by only about $42 billion.

The federal cuts from sequestration, which will be enacted gradually over the next two years, should not negatively impact private-sector job growth. Economists Alberto Alesina, Carlo Favero, and Francesco Giavazzi have found that spending-based corrections are followed by little decline in gross domestic product (GDP), with recovery following within a year.

The Obama administration wants to replace the sequester with a so-called balanced approach; however, their idea of balanced is more taxes and ultimately more spending.  Increased taxes – like the higher payroll taxes imposed upon us by the fiscal cliff deal – will not contribute to economic improvement. 

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