muses of the moment

December 11, 2012

Another dissection of the unemployment rate

Here is another dissection of the “official” unemployment rate.

Click here.

Barack Obama has been president for less than four years, and during that time the number of Americans “not in the labor force” has increased by nearly 8.5 million.  Something seems really “off” about that number, because during the entire decade of the 1980s the number of Americans “not in the labor force” only rose by about 2.5 million.  At this point the official unemployment rate is so manipulated that it is of very little value at all.

Why should we care?

Unemployed people do not buy things and the US GDP is currently over 70% consumer driven. Economy is not recovering and will not recover until we have more people with jobs and more disposal income.

Unemployed people do not pay their mortgages, credit cards, and other bills. The banks are HIDING the true percentage of mortgages in default or official foreclosure. They are legally falsifying their balance sheets and the government is propping up the housing market by keeping foreclosures out of the market. These maneuvers hide the fact that people are using mortgage money for consumables (which can not last forever) and the housing market is in a long-term decline.

Unemployed people do not buy health insurance, they go to emergency rooms for health care. The latest Health Care Law will not fix anything. Since if you don’t have a job, you don’t or can’t get health care through your employer or any new Fed program. No job, no money, no health care.

Unemployed people do not pay income taxes. Tax revenue will fall no matter who you increase or not increase taxes on.

Unemployed people do not pay social security and medicare tax. We have hit a tipping point where the number of people paying into the system is far under the people requiring money out of the system (and the US government already spent the excess and/or replaced it with T-bills).

Even if this unemployment issue is purely based on the change in demographics and older people retiring (which it is not, judging from the age/job division charts gg has seen), all these problems still remain.

The punch line: there will be no economic recovery.

Even if all the best government economic schemes were working. Demographic shifts demands a declining economy. Debt collapse demands a correction to levels that sustain the debt service.

Side musing: the government is still the biggest sector actually creating jobs right now. Kind of defeats the whole purpose.

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3 Comments »

  1. Nice commentary. Unemployment is a self-reinforcing destructive cycle, much like deleveraging. Both eventually end but are painful until they do.

    Comment by Phaedrus — December 11, 2012 @ 9:23 pm

  2. Thank you.
    gg

    Comment by totallygroovygirlfriday — December 12, 2012 @ 12:14 pm

  3. This is the great leveling that is prerequsite to a socio-fascist Global Plantation. A working class depleted of wealth and heritage is less capable of uprising. Recall that in Orwell’s ‘1984’ there are the stupid Proles and the Party. Prosperity for all but the Inner Party is anathema. It’s scary how slow the public is to connect dots and realize how awful things are about to become unless control freaks are removed from positions of influence. The policy vehicle known as Agenda 21 poses a greater threat to public welfare than any geopolitical bogeyman, for it proposes to save us by destroying us.

    “People willing to trade their freedom for temporary security deserve neither and will lose both.” – Ben Franklin

    Comment by Lore — December 13, 2012 @ 5:03 pm


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