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  • What Recovery Summer?

    The Obama Administration announced “Recovery Summer” in June to highlight the expected gains in jobs and economic strength resulting from Obama’s stimulus.. Well, maybe next summer.

    Initial estimates from the Department of Labor (DOL) suggest the economy shed a whopping 131,000 jobs in July while employment for the prior two months was revised down by 97,000 jobs. The unemployment rate held steady in August at 9.5 percent despite a drop in employment, because the number of people in the workforce also declined as workers appear to be giving up in the face of persistent high unemployment.

    To an important extent, the wild swings in employment in recent months are due to the decennial census that led to a steady but temporary rise in government employment, a spike upward in government employment in April, and now two consecutive months of downward plunges, resulting in 454,000 fewer government jobs. In the private sector, job growth increased smartly in April and May but has since dropped to a very anemic three-month average growth rate of about 51,000 jobs.

    This data confirms once again that the $862 billion Obama stimulus legislation—as well as all the subsequent budget-busting legislation Congress has enacted under the rubric of “jobs” bills—has failed, as expected.

    The weak jobs data also mean the Obama jobs deficit—the difference between current employment and the jobs Obama promised to create by the end of 2010—now stands at 7.6 million workers. That’s 7.6 million fellow citizens who were promised jobs if Obama was elected and his economic program instituted and are still out of work. Unfortunately, continued weakness in the economy indicates they will continue to be out of work for months to come, perhaps as long as Obama adheres to his ideology rather than opting for proven solutions.

    Obama Failing to Make Good on Jobs Promises

    The President’s original target for jobs creation set during the campaign in the fall of 2008 was 2.5 million jobs. But as employment fell at the end of 2008, he increased the employment target by 1 million to 3.5 million jobs. At the time, employment stood at about 135.1 million, according to the DOL’s most commonly used measure. This establishes the Obama jobs target for December 2010 at 138.6 million. It also establishes a basic trajectory for employment that the economy would need to approximate to hit that target.

    According to the latest jobs report, total U.S. employment stood at 130.2 million in July, which means the cumulative Obama jobs deficit stands at 7.6 million.

    Accompanying his jobs promise, the President also emphasized accountability and measuring his presidency by results. By his own official forecast and by his own standard, the Obama jobs deficit attests to the failure of his policies.

    Why Has the Obama Stimulus Failed?

    The centerpiece of Obama’s short-term stimulus program was $862 billion in poorly targeted tax cuts and ineffectual spending increases he signed into law in February 2009, since supplemented by a number of smaller budget-busting “jobs” bills, including the most recent, a $26 billion state aid package. Obama had one big shot at really helping the economy and he took it, holding nothing back. As short-term economic stimulus, it was doomed from the outset because it was based on the erroneous assumption that deficit spending can increase total demand in a slack economy.

    The theory underlying Obama’s stimulus was that the economy was weak because total demand was too low. The suggested solution is then to increase demand by increasing government spending, exploding the deficit in the process.

    This theory of demand manipulation through deficit spending ignores the simplest of realities: Government spending must be financed. So to finance deficit spending, government must borrow from private markets, thereby reducing private demand by the same amount as deficit spending increases public demand. In effect, the theory says that if I take a dollar from my right pocket and put it in my left, then I’m a dollar richer. No wonder it always fails.

    Obama Tax Hike Weakening Job Creation

    The federal government cannot stimulate the economy in the short term by increased borrowing and shuffling demand across the economy through wasteful deficit spending, but government can stimulate the economy by improving incentives and the general economic environment. Unfortunately, Obama’s promised tax hike is already draining the vitality from the economy and job creation.

    Businesses invest when they are confident enough to take risks in pursuit of opportunity. Individuals and businesses across the nation see tremendous opportunities for starting new businesses, investing, hiring new workers, expanding into new markets. Many are holding back, however, due to concerns about the economy, while others are holding back due to concerns about the threatening policies from Washington, most especially the tax hikes Obama promised and Congress intends to deliver.

    For private sector job creation to accelerate to bring down the unemployment rate and the Obama jobs deficit, step one is for Washington’s job destruction machine to take a long vacation. Facing such a weak economy, the intentions of Obama and his congressional allies to raise tax rates on small businesses, on capital gains and dividends, and through the death tax go well beyond ideology to economic policy malpractice. Obama should call on the Congress to forego all tax hikes—especially those on work effort, small businesses, savers, and investors—least until the economy has created enough jobs to return the country to full employment.

    Posted in Economics [slideshow_deploy]

    18 Responses to What Recovery Summer?

    1. Mark,Chesapeake Va says:

      What I just read makes so much sense,and I am no economist. So why is Obama,who is supposedly the smartest president America has ever had,determined to continue his Keynesian,Cloward-Piven economics? Is he not as smart as people give him credit for or his deliberately destroying our country?

    2. Pingback: Is “Reading books is useless” virus? « shiyan

    3. Chris says:

      The Democrats are also smart enough to know all this. The Great Depression of the 30s was only a testing ground by the "progressives" for this play on the American people. The goal is to knock America down to be more in-line with the rest of the world, not "stimulate" anything. How else could you usher in a new world order, and new world currency. Without a world currency (much more controllable and manipulatable), how else would you get the whole world to bow and serve the progressive elite. $5 million dollar weddings… to a family who only a handful of years ago called on the faithful to donate to their legal defense fund, so they wouldn't be a former first family leaving the White House "destitute". I hope all those weak minded souls ask for their money back. America is being milked and soon the whole world.

    4. Steve , Florida says:

      Somone in Congress or the Senate had proposed a tax holiday for six months or the remainder of 2010 I do not call who or for how long it was intended. Imagine how that would have worked as opposed to $862 billion in poorly targeted tax cuts and ineffectual spending increases he signed into law in February 2009. But of course this would allow Americans freedom to choose how they spend thier own money. Once the tax break ended it might have been hard to get the sheeple to pay the taxes we were paying when we see just how much our Government takes.

    5. Tom, Wolfforth, Texa says:

      Right now I'd say the Fair Tax is about the best thing any administration could do. But Obama, Pelosi and Reid like the fact that the Dumb Masses think it's cool when they get a refund on wages witholdings.

    6. Pingback: The Obama Jobs Deficit: 7.6 Million Jobs | Florida Pundit

    7. Pingback: Must Know Headlines 8.9.2010 — ExposeTheMedia.com

    8. Octavio, Texas says:

      Of course the talk will be changed to refer to jobs saved. Then mathematically they can claim that without the stimulus the amount of jobs that would have been lost would have been 7.6 million people. Of course that cannot be proved or disproved so there you are.

    9. Charlie, PA says:

      It is heartbreaking to see what these people are doing to this country. I do not mean just economically but in every way destroying the foundations of a great country that has been blessed by God, even through many seemingly hopeless times. I am praying that we as a people will awaken to the dangers we facing and that good people will let their voices be heard in November.

    10. Pingback: No-Recovery Summer? | RedState

    11. Rev. Drake Las Vegas says:

      Obama , Who was born in Kenya and is devout Muslim . I doing all this on purpose . He is acting on behalf of the Bilderberger Groups wishes. They are on the End Game of Global Enslavement and a One World Government. Thes are undeniable facts . It is up to the American People to WAKE-UP !!!. Only is everyone works together can we defeat their program. http://www.ahealedplanet.net
      Must read site < You don't know what you don't know ! And, You don't know that you don't know it !

    12. JA Cooke, Arlington, says:

      Now is the time for the Flat Tax to be passed. It removes all taxes on business and puts all citizens on a level paying field. It could be revised to have 3 tax levels to allow the Democrats to approve. I suggest 10%, 15% and 20% with the only deduction for house mortages up to $350,000. We almost made it in 1988 but Mr Armey would not compromise with Senator Shumer. Lets go for it!!!!

    13. Alan, Knoxville says:

      I seem to recall he modified his pledge to, "save or create" 3.5 million jobs. Easy to claim…hard to refute (essential criteria for a well-laid deception.)

    14. Pingback: Department of Offense » Indisputable Failure

    15. Bobbie says:

      "save or create," Anyone can say that and make it so…

      it's an unsubstantiated phrase. The only jobs "created" are government make-work jobs and he's destroying the private sector jobs.

    16. Pingback: Obama Recovery Summer–Where Are The Jobs Promised? | Asian Conservatives

    17. MG. from Cincinnati says:

      These events shouldn't be a surprise to anybody! Obama spent more in eighteen months than Bush did in eight years. If you'll recall Bill Clinton(D) and a Democrat congress signed into being NAFTA, GAT and the relaxed lending policies of 1994 for Fanny and Freddi that triggered our current recession. This direct assault on the middle class created the housing bubble and a false hope for Government intervention. The final step for these zealots is the destruction of the dollar and to wisk away the last vestiges of the American Republic. Destroying American sovereignty is the key to prevent the set-backs of WWII from happening again so that the DAZI's or DNC (Democratic National Socialist Comittee) can permanently join us to the New World Order! If people aren't intelligent enough to realize that Obama is deliberately destroying the economy by now, then our fate is sealed! Just ask a young person or some Ethnics why do so many of the illegal aliens have their jobs and why isn't Obama doing anything about it? You may be startled at some of their answers!…. "We must not fail this November".

    18. Pingback: USA Today Manufactures Stimulus Jobs Claims | National Review Institute Blog

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