Following up on that last post, here are three more stories of which you need to be aware.
First — and probably most important — is the thing you probably don't need to be reminded of: Congress is a bunch of idiots. They're so dumb on this stuff that they can't find their butts with both hands:
The Congressional Budget Office projected today that the federal budget deficit for FY 2009 will be $1.2 trillion, over 8 percent of anticipated GDP. And this is before Congress enacts Barack Obama's “stimulus” package, which would add hundreds of billions of dollars more to the deficit.
The best way to look at budget deficits is as a percentage of Gross Domestic Product. So, using data from the Brookings Institution and other sources, and adding on this year's deficit and the one now projected for FY 2009, I created this chart, which shows the federal budget deficit (or surplus) as a percentage of GDP from 1962 through 2009.
As you can see, we are headed for uncharted waters–uncharted, anyway, since World War II. If they pursue their current course, the Democrats are going to own a budget deficit that in both absolute and relative terms dwarfs anything in our modern history. I have no idea what the consequences of that may be, and, after the events of the last six months, I have no confidence that anyone else does, either.
Okay, so Congress has pointed us toward levels of spending never before seen, which is an impressive feat all by itself. According to my previous post, they've also decided to throw onto that stupidity the very same policies that caused the Great Depression. Put those two things together, and it is obvious that they don't have any idea what they're doing. Sprinkle in a little hysteria — coming from the Obamessiah himself — and you have a politically manufactured crisis of epic proportions when it's really not that bad. Case in point:
The nation's unemployment rate bolted to 7.2 percent in December, the highest level since Bill Clinton was in office.
Worse than that…
This now means that the average unemployment rate during the Bush years reached the same threatening level as it was during the Clinton years…
Although it wasn't such a big deal during the Clinton years:
Data taken from the Misery Index.
It must be a depression.
America's North Shore Journal has more on today's unemployment rate including this:
It is also clear that education matters. The December overall unemployment rate for people without a high school diploma is 10.9%. The diploma reduces the rate to 7.7%. Having some college brings it down to 5.6% and having that 4 year degree lowers it to 3.7%.
December’s terrible jobs report, featuring a 7.2 percent unemployment rate, a 524,000 loss of payrolls (actually 678,000, with downward revisions to the prior two months), and an 806,000 drop in household jobs virtually suggests a never-ending recession. However, the future may be rosier than the past.
A series of market-price indicators suggests a bottoming economy that may gradually rise in the months ahead — believe it or not.
In the money and credit markets all manner of Treasury swaps spreads and short-term interest rates are declining. In other words, the credit freeze is thawing. Corporate bond rates are coming down. The LIBOR rate is way down. And commodity indicators are coming off the bottom. This includes oil, gasoline, the Dow Jones-AIG Commodity Index, and the Baltic Dry Index.
So the intense deflation that has marked this recession appears to be coming to an end. Undoubtedly this can be traced to the massive money-creation by the Fed which began in September and will start to show up in the economy this spring at the latest.
Meanwhile, one bright spot in today’s jobs report is wages. Average hourly earnings continue to rise at a 3.7 percent pace over the past year and a 4.2 percent rate over the past three months. Inflation is near zero as a result of plunging retail gas prices. So the tax-cut effect from falling energy and overall inflation will continue to support rising consumer spending.
The message? An unemployment rate of 7.2 percent is not the end of the world. It’s not a high point, but it’s also not the apocalypse.
Of course, if Obama and the Dems get their 'stimulus' package — more correctly called The Generational Theft Act of 2009 — shoved down the throats of the American people, it is likely to become a crisis of epic proportions.
Aside from the obvious downside to that happening, there's one other political factor at play here. If the Republicans sign on with the Dems and back this thing, they'll be on the record as helping with the worse economic boondoggle in the history of the planet. Now is the perfect time to take a principled stand and put some distance between the GOP and the Dems so that in two years, as this recession-turned-depression is being reviewed by millions of angry people in the voting booth, there is a real, consistent alternative to more of the same liberal madness.
Are the current crop of Reps man (or woman) enough to do it? We'll find out soon enough. It might help if you called and challenged them on it.
There's my two cents.