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U.S. Economy Prospers

The Department of Commerce’s Bureau of Economic Analysis has issued its analysis of the current state of the U.S. economy, measuring the Third Quarter GDP growth for 2019. The Bureau found that real gross domestic product increased at an annual rate of 1.9 percent in the third quarter.

The report’s date clearly refutes the almost passionate statements by opponents of the Trump Administration, who have both criticized the White House’s pro-growth policies and suggested replacing them with a variety of measures that have proven disastrous in nations such as Venezuela.

“Today’s report shows that the U.S. economy continues its steady growth in defiance of media skeptics calling for a recession,” said Secretary of Commerce Wilbur Ross. “Since President Trump took office, wages have surged, unemployment has hit record lows, and poverty has fallen for all Americans, including the country’s most vulnerable.”

In the third quarter, U.S. consumer spending grew a healthy 2.9 percent, as American consumer confidence continued to buoy our country’s economic strength. Spending on durable goods led and jumped 7.6 percent from the second quarter. Business intellectual property investment rose 6.6 percent, signaling that American business will continue to lead the world with new ideas and inventions. The 1.6 percent growth in goods exports demonstrates that President Trump’s trade policies are bringing Made in America back.

In September 2019, unemployment in the U.S. fell to 3.5 percent, hitting the lowest level in 50 years. The unemployment rate for Hispanic Americans and African Americans were also at record lows. The total numbers of employed Americans hit the highest level on record. Between 2017 and 2018, 2.3 million more Americans gained full-time, year-round employment, including 1.6 million women.

This has translated to higher incomes for average Americans. The Census Bureau reported in September that real median household income rose to more than $63,000 in 2018, the highest level in nearly two decades. Between 2017 and 2018, real median earnings of full-time, year-round workers rose 3.4% and 3.3% for men and women respectively. This good news tracks with Labor Department numbers, which marked more than a year of consecutive year-over-year hourly wage increases of 3.0 percent or higher. Before 2018, wage gains had not hit 3 percent since 2009.

The poverty rate has tumbled as well. In 2018, the poverty rate fell by 0.5 percent to the lowest level since 2001, as the growing economy lifted 1.7 million Americans out of poverty since just 2017. Disadvantaged groups such as Hispanic Americans and African Americans saw the largest poverty reductions. America’s children saw a 1.2 percentage points in poverty, while poverty for single mothers fell by 2.5 percentage points.

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According to Bureau of Economic Analysis statistics, Professional, scientific, and technical services increased 7.4 percent in the second quarter, after increasing 8.0 percent in the first quarter. Real estate and rental and leasing increased by 2.6 percent, after increasing 0.8 percent in the first quarter. Mining (a particular target of the U.S. left, who have consistently attacked the industry) increased 23.5 percent, after increasing 26.0 percent.

The White House notes that   “In its final projection before the 2016 election, the Congressional Budget Office (CBO) estimated that real GDP would grow at a 2.1 percent annual rate in the first 11 quarters of a new Administration. Instead, under President Trump, real GDP as of the third quarter has grown at a strong 2.6 percent annual rate since the election. As of the third quarter, real GDP is $230 billion—or 1.2 percent—higher than CBO’s projection Furthermore, under President Obama’s expansion period, real GDP grew at only a 2.2 percent annual rate compared to the Trump Administration’s 2.6 percent rate.”

What of the future?  Much depends on the success of President Trump’s attempts to rein in China’s illegitimate trade practices, which have resulted in vast numbers of U.S. jobs lost, particularly in manufacturing, and have cost U.S. companies billions from intellectual property theft.  They have also endangered American national security, as major U.S. advances in defense have been stolen.

The National Interest outlined a variety of practices, including currency manipulation, cyber attacks, selling fentanyl, intellectual property theft, forced technology transfer, product-dumping and subsidizing state enterprises as Beijing practices that have caused substantial harm.

Prior presidential administrations chose largely to ignore China’s practices, and critics of the Trump Administration have emphasized the temporary pain as opposed to the eventual gain from finally confronting Beijing’s abuses.

Illustration: Pixabay

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Minimum Wage, Minimum Jobs

The Congressional Budget Office (CBO) has released a report detailing “The Effects on Employment and Family Income of Increasing the Federal Minimum Wage.”  The New York Analysis of Policy and Government presents key portions of the report.

The federal minimum wage is $7.25 per hour for most workers. In this report, CBO examines how increasing the federal minimum wage to $10, $12, or $15 per hour by 2025 would affect employment and family income.

The federal minimum wage of $7.25 per hour has not changed since 2009, though many states and localities have set their minimum wage above that level. Increasing the federal minimum wage would have two principal effects on low-wage workers. For most low-wage workers, earnings and family income would increase, which would lift some families out of poverty. But other low-wage workers would become jobless, and their family income would fall—in some cases, below the poverty threshold.

What Options for Increasing the Federal Minimum Wage Did CBO Examine?

CBO examined three options for increasing the federal minimum wage.

The first option would raise the federal minimum wage to $15 per hour as of January 1, 2025. That increase would be implemented in six annual increments starting on January 1, 2020. After reaching $15 in 2025, the minimum wage would be indexed, or tied, to median hourly wages. The $15 option would also gradually eliminate exceptions to the minimum wage for tipped workers, teenage workers, and disabled workers.

The second option would raise the federal minimum wage to $12 per hour as of January 1, 2025. The $12 option would be implemented on the same timeline as the $15 option but would not index the minimum wage to wage growth after 2025. It would leave in place current exceptions.

The third option would raise the federal minimum wage to $10 per hour as of January 1, 2025. The $10 option would be implemented on the same timeline as the $15 and $12 options. Like the $12 option, it would not index the minimum wage to wage growth and would leave in place current exceptions.

What Effects Would the Options Have?

Of the three options, the $15 option would have the largest effects on employment and family income. That is because it would increase wages for the most workers, because it would impose the largest increases in wages, and because, in CBO’s estimation, employment is more responsive to relatively large wage increases and increases that will be adjusted for future wage growth. The $12 option would have smaller effects, and the effects of the $10 option would be smaller still.

There is considerable uncertainty about the size of any option’s effect on employment. CBO’s estimates are based on the median values of likely ranges for wage growth and the responsiveness of employment to changes in wages. In particular, the likely ranges for the responsiveness parameter are not symmetric: That value has an equal chance of being smaller or larger than the median, but if it is larger, it could be substantially larger.

Effects of the $15 Option on Employment and Income. According to CBO’s median estimate, under the $15 option, 1.3 million workers who would otherwise be employed would be jobless in an average week in 2025. (That would equal a 0.8 percent reduction in the number of employed workers.) CBO estimates that there is about a two-thirds chance that the change in employment would lie between about zero and a reduction of 3.7 million workers. In addition, in an average week in 2025, the $15 option would increase the wages of 17 million workers whose wages would otherwise be below $15 per hour, CBO estimates. The wages of many of the 10 million workers whose wages would be slightly above the new federal minimum would also increase.

The $15 option would affect family income in a variety of ways. In CBO’s estimation, it would:

  • Boost workers’ earnings through higher wages, though some of those higher earnings would be offset by higher rates of joblessness;
  • Reduce business income and raise prices as higher labor costs were absorbed by business owners and then passed on to consumers; and
  • Reduce the nation’s output slightly through the reduction in employment and a corresponding decline in the nation’s stock of capital (such as buildings, machines, and technologies).
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On the basis of those effects and CBO’s estimate of the median effect on employment, the $15 option would reduce total real (inflation-adjusted) family income in 2025 by $9 billion, or 0.1 percent.

The effects of those income changes would vary across families. Changes in earnings would mainly affect low-income families, but many higher-income families would be affected, too. The loss in business income would be mostly borne by families well above the poverty line. All consumers would pay higher prices, but higher-income families, who spend more, would pay more of those costs. And the cost of effects on the overall economy would generally accrue to families in proportion to their income, which means they would largely be absorbed by families with income well above the poverty threshold.

Taking those effects into account, CBO estimates that families whose income would be below the poverty threshold under current law would receive an additional $8 billion in real family income in 2025 under this option. That would amount to a 5.3 percent increase in income, on average, for such families. That extra income would move, on net, roughly 1.3 million people out of poverty. Real income would fall by about $16 billion for families above the poverty line; that would reduce their total income by about 0.1 percent.

Effects of the $12 Option on Employment and Income. Under the $12 option, according to CBO’s median estimate, about 0.3 million workers who would otherwise be employed would be jobless in an average week in 2025. (In percentage terms, the number of employed workers would fall by about 0.2 percent.) There is a two-thirds chance that the change in employment would lie between about zero and a reduction of 0.8 million workers, in CBO’s assessment. However, in an average week in 2025, the increase in the federal minimum wage would boost the wages of 5 million workers who would otherwise earn less than $12 per hour, CBO estimates. Wages would also increase for many of the 6 million workers who would otherwise earn just above $12 per hour.

Like the $15 option, this option would boost wages, but it would also increase joblessness, reduce business income, raise prices, and lower total output in the economy. On balance, real family income in 2025 would fall by $1 billion, or less than 0.05 percent. The effects of those changes would again vary across families. CBO estimated that families with income below the poverty threshold under current law would receive $2.3 billion in additional real income under the option. The option would move, on net, about 0.4 million people out of poverty. Families above the poverty line would receive about $3 billion less in real income, a very small share of their total income.

Effects of the $10 Option on Employment and Income. According to CBO’s median estimate, the $10 option would have virtually no effect on employment in an average week in 2025. There is a two-thirds chance that the effect on employment would lie between about zero and a decrease of 0.1 million workers. In an average week in 2025, wages for 1.5 million workers who would otherwise be paid less than $10 per hour would increase, CBO estimates. Wages would also increase for many of the 2 million additional workers who would otherwise earn slightly more than $10 per hour in 2025.

Real annual family income would again be affected by changes in earnings, business income, and prices. On balance, the $10 option would reduce real family income in 2025 by $0.1 billion, a very small percentage. CBO estimates that real income would increase, on net, by $0.4 billion for families whose income would otherwise be below the poverty threshold. Families with higher incomes would see very small changes to their real income. The option would also have a small effect on the number of people in poverty.

Other Effects. Numerous studies have examined the link between minimum wages and a range of outcomes other than employment and family income. Those include labor force outcomes such as labor force participation (whether a person is working or actively seeking a job); health outcomes such as depression, suicide, and obesity; education outcomes such as school completion and job training; and social outcomes such as crime. CBO did not examine those other possible outcomes in this analysis.

CBO also did not estimate how any of the three options would affect the federal budget. However, the agency previously estimated how proposed changes to the minimum wage under the Raise the Wage Act (H.R. 582) would affect the federal budget by boosting the pay of certain federal employees. The policy analyzed in that estimate is very similar to the $15 option in this report.

Why Are the Outcomes Uncertain?

There are two main reasons why CBO’s median estimates of the effects of increases in the minimum wage on employment are uncertain. First, future wage growth under current law is uncertain. If wages grow faster than CBO projects, then wages in 2025 will be higher under current law than CBO anticipates. In that case, increases in the federal minimum wage would have smaller effects on employment than CBO expects. If wages grow more slowly than CBO projects, the options would have larger effects on employment than CBO expects.

Second, there is considerable uncertainty about the responsiveness of employment to an increase in the minimum wage. If employment is more responsive than CBO expects, then increases in the minimum wage would lead to larger declines in employment. By contrast, if employment is less responsive than CBO expects, then such increases would lead to smaller declines in employment. Findings in the research literature about how changes in the federal minimum wage affect employment vary widely. Many studies have found little or no effect of minimum wages on employment, but many others have found substantial reductions in employment.

Illustration: Google images

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U.S. Economy Gains Spread Wide

The U.S. economic revival is broad, apparently durable, and significant, particularly in that its success covers almost all segments of society.

The aftermath of the Great Recession of 2007 and the stagnation of the Obama era presented key challenges. However, reducing both taxes and the excess regulations allowed the inherent strength of the American economy to reassert itself. The current upswing is particularly notable for several reasons.

First, it has an extensive reach throughout all segments of the population. Blacks, Hispanics, young people, and the middle class, several segments that had been particularly hard pressed, are gaining. Second, blue collar workers, who have been harshly affected by the poor economic decisions of prior administrations, are benefiting. Third, Main Street is gaining, as well as Wall Street.

Despite political claims to the contrary, wages are growing. According to the Bureau of Labor Statisics (BLS) average hourly earnings for all employees in August increased by 10 cents to $27.16. For 2018 so far, average hourly earnings gained by 2.9 percent, or 77 cents. Job growth has been notable. Total nonfarm payroll employment increased by 201,000 in August, in line with the average monthly gain of 196,000 over the prior 12 months.

The details are important.  At 6.3%, the unemployment rate for blacks is the second-lowest in history. Steve Cortes, writing in Real Clear Politics, noted in April: “Among Latinos, the jobless rate has only registered below 5 percent for seven months total, in the history of this country. Six of those months have occurred with Donald Trump in the White House…The jobs data was terrific news for Americans of all ethnicities. For the first time since the year 2000, the overall unemployment rate dipped below 4 percent. Just as significant, almost 1 million Americans who had previously given up on finding a job have rejoined the workforce since Trump was elected.”

The Wall Street Journal  reports that youth unemployment, formerly a similarly bleak statistic, also has seen remarkable improvement. Andrew Duehran notes that “…the unemployment rate among young Americans fell to its lowest level in more than 50 years this summer…Of Americans between 16 and 24 years old actively looking for work this summer, 9.2% were unemployed in July, the Labor Department said Thursday, a drop from the 9.6% youth unemployment rate in July 2017. It was the lowest midsummer joblessness rate for youth since July 1966.”
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The other end of the age spectrum is gaining, as well.  Claudia Dreifus, in The New York Times writes that “In a tight labor market, retirees fill gaps their previous employers can’t…At a moment when the unemployment rate is low, hovering around 3.9 percent, some employers are turning to their pool of retirees to fill holes in their staff. ‘In a tight labor market, firms find recent retirees increasingly attractive,’ said Kathleen Christensen, who funds research on aging and the American labor market at the Alfred P. Sloan Foundation. ‘Their skills are up-to-date, they possess critical institutional knowledge, and they can mentor younger workers. Hiring back recent retirees appears more common than at any other time since the Great Recession,’ she added.”

Blue collar workers, long overlooked, are prospering. The BLS notes that there are 243,000 open blue collar jobs.  Mining employment increased by 6,000 in August,  Since a recent trough in October 2016, the industry has added 104,000 jobs. Employment in construction continued to trend up in August (+23,000) and has increased by 297,000 over the year. Manufacturing employment was up by 254,000, with more than three-fourths of the gain in the durable goods component.

The Miami Herald reported this month that “Miami is a city with an ever changing skyline. And those who make it happen — the plumbers, electricians, brick masons and carpenters — earn far above the local median: $55,000-75,000 a year with full benefits and a pension. But as the economy barrels toward full employment, local contractors are struggling to find enough skilled workers to fuel the construction boom. ‘We’re seeing it across the board. There are shortages in every trade,’ said Peter Dyga, president of the South Florida-based Florida East Coast Chapter of Associated Builders and Contractors, a non-profit trade organization comprised of several construction firms and contractors.”

While paychecks are improving as well becoming more available, additional dollars are being freed up to consume goods.  According to Americans for Tax Reform  “Thanks to the tax cuts passed by the Republican House and Senate and signed by President Donald Trump, at least 120 utilities across the country are lowering rates for customers, according to a report from Americans for Tax Reform. This means lower electric bills, lower gas bills, and lower water bills for Americans. The Tax Cuts and Jobs Act cut the corporate rate from 35% to 21%. Utility companies are passing on the tax savings in the form of lower rates for customers.”

Photo: Pixabay

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U.S. Economy Grows, Despite Partisanship

It is disappointing that partisan politics has blocked widespread recognition that the reversal of Obama-era policies has led to significant gains for the U.S. economy. The disunity within the nation hampers additional progress that could be made from a united stance on Trump’s attempt to finally address the unfair trade policies that have hampered the American economy for far too long.

Clearly, the numbers indicate success for the President’s policies.  A growth rate of 4.1% from April through June (Obama’s average growth rate was 1.48%.) has been accomplished.

Conor Beck, writing for the Free Beacon, reports that even “Jason Furman, chair of the Council of Economic Advisers under President Barack Obama, argued on CNBC…that the economy is growing even faster than the commonly used government figure suggests. CNBC’s Sara Eisen said people at the network were surprised to see the argument being argued by an Obama administration official.”

While Americans enjoy the Trump tax cuts, one reason often cited for the good news, the Treasury Department reports that it has collected record amounts of individual income taxes.  The math is simple.  More people are working.

The Bureau of Labor Statistics reports that 213,000 jobs were added in June. A March analysis noted that 2.21 million jobs have come into being in Trump’s first 15 months in office. Unemployment rates were lower in June in 9 states, higher in 3 states, and stable in 38 states and the District of Columbia. Ten states had jobless rate decreases from a year earlier and 40 states and the District had little or no change. Bloomberg  notes that “The monthly jobs report for June…is further evidence that this indicator has become more than just a snapshot of the health of a key part of the U.S. economy and the outlook for monetary policy.”

CNBC reported that the manufacturing industry, which has been particularly hard hit since the Clinton Administration, has added roughly 293,000 jobs since President Trump’s election, according to Department of Labor data.
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The latest report from the Federal Reserve reveals “For the second quarter as a whole, industrial production advanced at an annual rate of 6.0 percent, its third consecutive quarterly increase. Manufacturing output moved up 0.8 percent in June. The production of motor vehicles and parts rebounded last month after truck assemblies fell sharply in May because of a disruption at a parts supplier. Factory output, aside from motor vehicles and parts, increased 0.3 percent in June. The index for mining rose 1.2 percent and surpassed the level of its previous historical peak (December 2014); the output of utilities moved down 1.5 percent. At 107.7 percent of its 2012 average, total industrial production was 3.8 percent higher in June than it was a year earlier. Capacity utilization for the industrial sector increased 0.3 percentage point in June to 78.0 percent, a rate that is 1.8 percentage points below its long-run (1972–2017) average.”

Further improvements may arrive soon. As the New York Analysis reported in June, an 18 year decline in American manufacturing may be drawing to a close, a result of tougher trade stances by the Trump Administration. Within two months of President Trump’s inauguration, AFL-CIO President Richard Trumka noted: “America’s working families welcome the Department of Commerce’s examination of China’s economy. A thorough assessment is necessary to ensure American workers are competing on a level playing field. Any fair analysis of the facts will reaffirm that China’s extensive government involvement merits “nonmarket economy” treatment so that the U.S. can properly address dumped, underpriced goods and services that hurt U.S. workers and producers.”

While Washington has the upper economic hand in its tariff dispute with China, the politics involved are not as favorable.  Inevitably, there may be temporary pain in any battle, even one that is clearly going to result in a victory.  That problem will affect the President and his party, due to several factors that his Chinese counterpart can, for his part, largely ignore. Xi doesn’t have to worry about the next election, nor does he face a hostile media.

While both the belated tough stance on trade and the general economic progress should be welcomed, the fact is that partisan politics apparently takes precedence. Stephen Moore and Arthur Laffer wrote in The Wall Street Journal “Liberals have opposed virtually every move President Trump has taken on the economy, which makes it inconvenient for them that economic conditions are so universally positive. It is hard to find a single indicator that isn’t pointed in a bullish direction. That’s why the left is now forced to argue that Mr. Trump’s economic success is really the continuation of a trend that began under President Obama… Mr. Trump has reversed nearly every Obama rule, edict and law that he can legally overturn. At its core, the Trump economic strategy wasn’t complicated: systematically repeal Mr. Obama’s “accomplishments”—the tax increases, the regulatory blitz on business, the welfare expansions, the war on American fossil fuels, and so on.”

Photo: Pixabay

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Ignoring Good News About America’s Economy

In the aftermath of the election of 2016, America’s economy has made a significant comeback following a decade of recession and poor decision making in Washington.  But you wouldn’t notice it from major news media reports.

Part of the problem established by the media’s replacement of objective coverage of the news with editorial opinion is that significant information simply does not get reported, outside of specialty publications and sources that happen to favor the political interests that gain from a particular piece of information.

Currently, many general media sources are ignoring or downplaying the national economic revival.

The Congressional Budget office (CBO)  has reported that real GDP growth is relatively strong this year and next, as recent changes in fiscal policy add to existing momentum. Productivity growth, after the ravages of the recession and the Obama economy,  are returning to nearly average over the past 25 years.  The Trump Administration’s changes in fiscal policy have boosted incentives to work, save, and invest. CBO also estimates  that receipts for the first seven months of fiscal year 2018 totaled $2,012 billion, a figure which is $83 billion more than the amount during the same period last year. That is somewhat surprising. Receipts collected in April, for example, were $30 billion to $40 billion larger than CBO expected.

The good news is, according to CBO, mostly related to economic activity in 2017 and may reflect stronger-than-expected income growth in that year.

Economic and business publications, unlike the general media, have noticed. Forbes notes that  “A strong job market will likely lead to higher consumer spending in the summer months as employment and incomes keep growing. Inflation isn’t expected to be as volatile. HSBC estimates 1.9%, or thereabouts, for the foreseeable future.”

The temperature of the room ought to be in the civilian world. pharmacy online viagra I am sure you know that these products have different price ranges but, even when it comes to the product itself, you want the best product that will help you in acquiring rid of the issue. generic vs viagra One tablet cannot be repeated before you 24 buying tadalafil hours have been completed to the first pill. And it does not make 1 have an instant erection without having cialis buy india having physical sexual stimulation. The Hill reports that “Fourteen states have set new records for low unemployment rates in the last year, nearly a decade after the recession put millions of Americans out of work… Such a tight job market means businesses are competing for workers, rather than workers competing for scarce jobs.”

These aren’t abstract figures that are merely statistics good for Wall Street while not helpful to Main Street, a problem that was prevalent during the Obama Administration.  Middle class employment is finally rising. The latest Bureau of Labor Statistics  monthly report disclosed that Total nonfarm payroll employment increased by 164,000 in April, and the unemployment rate edged down to 3.9 percent. More important than the overall statistic was the type of jobs that were increasing. Job gains occurred in professional and business services, manufacturing, and mining, solid middle class occupations which had been declining over the past decade as a result of poor policy decisions. BLS found that “In April, employment in professional and business services increased by 54,000. Over the past 12 months, the industry has added 518,000 jobs. Employment in manufacturing increased by 24,000 in April…Manufacturing employment

has risen by 245,000 over the year…In April, employment in mining increased by 8,000…Since a recent low in October 2016,employment in mining has risen by 86,000.

BLS also found that  the median weekly earnings of wage and salary workers in the first quarter of 2018 Median weekly earnings of the nation’s 113.4 million full-time wage and salary workers was 1.8 percent higher than a year earlier.

In a statistic that may prove somewhat disruptive for Democrats in the upcoming midterm elections, who heavily depend on black and Latino support, the Trump Administration’s economic policies have been particularly helpful to both those communities.  The unemployment rate for black workers dropped to 6.6 percent, beating the previous record low of 6.8 percent set in December. Similarly, Hispanics had an historic low  unemployment rate of 4.8%, matched once before in 2006.

Photo: U.S. Department of Labor

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U.S. Economy’s Dramatic Improvement

How has the economic outlook changed since the election?

For the bulk of the Obama presidency, a supportive media produced a consistent stream of highly questionable good news.  It was said that, following the ravages of the Great Recession, the unemployment numbers were improving.  Upon closer inspection, the truth was far, far less optimistic.  A combination of a historically dismal labor participation rate, along with the replacement of full-time, benefits-paying positions with low-paying, part time jobs providing no benefits artificially made it seem as though the labor market was doing better than it actually was. Median hourly pay rose only  7% over seven years. Those fortunate enough to actually have jobs received practically no wage increases.  It was said that inflation was low, but any trip to the supermarket contradicted that claim.  (It didn’t, however, prevent the Social Security Administration from using that as an excuse to deprive seniors of cost of living increases.) Taxes remained high, and health care premiums rose, making the squeeze on middle-income Americans dire. Non-housing debt increased.

Reuters reported in 2015 that “families in the middle fifth of the income scale now earn less and their net worth is lower than when Obama took office…the middle, the economy has shed positions – whether in traditional trades like machining or electrical work, white-collar jobs in human resources, or technical ones like computer operators.”

The decline of the middle class under Obama cannot be pinned on the Recession.  The poorly thought-out provisions of Obama’s Affordable Health Care Act (Obamacare) actually served to encourage employers to shed full time positions in favor of part time replacements. Key middle class jobs in the energy and defense sectors were quite openly attacked. The continuation of high tax rates and onerous regulations discouraged employment growth. While vast swaths of the economy were hit with interference from Washington, the explosive growth of tuition in colleges, institutions that were overtly supportive of the Obama Administration, were allowed to continue unaddressed. Regulations made many products too prohibitively expensive to manufacture in America, and were replaced by foreign made goods. According to the financial site Seeking Alpha “The homeownership rate in 2016 was the lowest in 50 years.”

With just ten months into the new Trump Administration, (and following  the effects of three deadly hurricanes) it may be too early to make any definitive statements on how the economy will change.  However, both significant policy changes as well as some early statistics indicate that a period of growth and, particularly for the middle class, improvement in economic fortunes, is occurring.
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In August, after the first complete fiscal quarter under the new White House, it was reported that economic growth reached 3%. CNN Money  has reported that in the The U.S. economy picked up steam during the second quarter…During the first full quarter with President Trump in charge, economic growth hit 3%, according to revised estimates released by the government on Wednesday.” This follows the reality that, during the entire 8 years of the Obama presidency, the U.S. economy never hit an annual growth rate of 3%, despite the expected “bounce” that generally follows a recession.

The Washington Times reports that “the U.S. economy is booming faster than any time since the late [1990s] It is undeniable. And the pace of improvement is quickening. In the last year of the Obama administration, the economy was decelerating with a dismal 1.6 percent growth rate. The economy revved up to a three percent growth rate in the April-June 2nd quarter this year…It’s easy to read too much into short term trends and, yes, they can turn on a dime. But the new bounce in the step of the economy is confirmed by many other indicators, almost all of which point straight north.The Dow Jones industrial average is up over 3,000 points (starting with the 700 point rally the day after the election) and the net wealth of Americans — mostly through their pension funds — has increased by more than $4 trillion.In August the University of Michigan, which tracks consumer sentiment, reported that confidence soared to near its highest level in at least a decade. Other surveys by the NFIB and the National Association of Manufacturers find that confidence for their members is hovering at near record highs.”

Adding to the optimism are reports that the U.S. economy has added over a million jobs in 2017.

Wayne Allen Root, writing for Townhall, reports that “The DOW has risen almost 25% since Election Day. That’s an increase of over 4,300 points in about 11 months. That’s the biggest increase in that period of time in the history of the stock market. The S&P 500 has passed $20 trillion in value for the first time in history. President Trump is also the only President in history to oversee two nine-day or longer stock rallies (where new highs are reached each day). Included in that record is the 12-day rally ending on February 28th– matching the all-time record set by President Reagan in 1987. Since the election of President Trump, the stock market has hit 63 closing highs, with 46 since Trump’s inauguration. On the other hand, Obama had exactly -0- stock market highs in his first four years in office. In total President Trump has added over $5 trillion to the U.S. economy since his election. GDP is hard evidence of how ‘mom and pop’ are doing on Main Street. Under Obama, America suffered the eight worst consecutive GDP years in history. Obama’s eight-year GDP average was 1.3%- the exact same GDP number as the period of the Great Depression. According to the Bureau of Economic Analysis, U.S. GDP has now been adjusted to a remarkable 3.1% growth in the second quarter (Trump’s first full quarter as president). That’s almost THREE TIMES HIGHER than Obama’s average GDP over his two terms. That grew our total U.S. GDP to almost $20 trillion- the highest GDP in history…According to the Bureau of Labor Household Survey, the number of employed Americans increased by an amazing 906,000 for the month of September. But that’s not even the highlight. Remember that almost every single job created in eight years under Obama was a crappy, low-wage, part-time job. Well under President Trump last month, full-time jobs (the kind we all want and need) increased by 935,000- the most in one month in the 21st century.”

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U.S. Economy May Revive in 2017, Part 2

Conclusion of two part forecast of the U.S. economy

The National Federation of Independent Business (NFIB) reports optimism among its members. “12 percent of small business owners have faith their business conditions will be ‘much better’ in the next six months (up from the 9 percent who said the same earlier this year), showing that despite sales numbers, owners still retain a positive outlook… ‘It is encouraging to see many businesses improving their outlook about the future, after a brief dip in confidence earlier this year,’ said Buck Stinson, SVP of Small Business Card at Capital One. While concerns related to costs and regulations still exist, we are glad to see that optimism is on the rise…”

The NFIB has blamed regulatory overload as a key reason why so many small businesses have been pessimistic during the Obama Administration.  “The uncertainty caused by future regulation negatively affects a small business’ ability to plan for future growth. While regulation is necessary, it must be pragmatic and sensible. Agencies need to carefully analyze how their regulations affect small businesses. At the same time, federal regulators should work with small businesses to help ensure compliance with the spirit of the law, rather than aggressively impose fines and penalties for violations that result from confusion…Since January 2009, ‘government requirements and red tape’ has been a top-three problem for small business owners, per NFIBs monthly Small Business Economic Trends survey. According to the 2012 NFIB Small Business Problems and Priorities report ‘unreasonable government regulations’ ranks fifth on the measures of small business problem importance. Within the small business problem clusters identified by the Small Business Problems and Priorities report ‘regulations’ rank second behind taxes. There are 3,297 federal regulations in the pipeline, waiting for implementation, according to the Administration’s fall 2015 regulatory agenda. About 10 new regulations are finalized every day, according to data on regulations.gov, adding to the volumes of rules small business owners must comply with.”

CNBC notes:  “One thing is for sure: for many on Main Street, the notion of deregulation is welcome. Nonpartisan advocacy groups say a Trump presidency may spark new, important discussions about how regulations impact the country’s smallest businesses.”

Pain in the lower tummy, cloudy, sometimes bloody or foul-smelling urine, or even a fever – all of these are signs levitra india regencygrandenursing.com that you have to see an urologist. It affects the response viagra on line cheap to sexual stimulation. Manforce help sustain an erection during sexual viagra canada deliver activity. InjuriesDamage cheap prices for viagra regencygrandenursing.com to nerves in the pelvis also can rotate as a block around the vertical lumbar spine. With the significant philosophical change in the white House, there is an extensive push to reduce government regulations in key areas.  The Competitive Enterprise Institute  (CEI) has proposed a “free market policy Agenda” for the Trump White House, “aimed at strengthening the economy and removing barriers to economic freedom in five key policy areas: regulatory reform, energy and environment, labor, finance, and technology and innovation. From replacing key agency heads to overturning burdensome regulations, CEI recommends several actions federal departments and agencies can pursue immediately to promote innovation, job creation, and financial freedom for all Americans.

“Many of our nation’s laws give broad discretion to federal regulators to force sweeping change over vast swaths of the American economy. Over the last 15 years, we have seen fundamental overhauls of major economic sectors: the 2002 Sarbanes-Oxley financial services “reform” law, the 2010 Dodd-Frank Act, and restrictions on affordable energy sources. For those Americans who are struggling financially, the need for regulatory reform has never been greater. Instead of chipping away at the margins, CEI believes we need substantial reforms that rein in federal bureaucrats so that our economy, and ultimately American consumers, businesses, and entrepreneurs, can benefit and make real progress toward prosperity…While every year Congress passes just a few dozen laws, federal regulatory agencies issue more than 3,000 regulations—but lawmaking by the unelected does not end there.

“Agencies also issue thousands of guidance documents, interpretive bulletins, notices, memoranda, proclamations, and even blog posts that carry regulatory force, but do not go through the formal rulemaking process. Trump should insist upon congressional affirmation of rules, guidance, and other agency proclamations likely to have significant economic impact, or that are otherwise controversial. Unfortunately, the current watchdog gives the regulatory state little to fear. The White House Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA) reviews only a fraction of rules and often misses deadlines. That could change if Trump makes the most of his promised regulatory moratorium and toughens review and analysis of regulations. Trump could boost audits and cost analysis dramatically via executive order and work with Congress to bring now-exempt independent agencies into the fold. The following are three actions President-elect Trump should take to rein in America’s regulatory state.”

CEI recommends strengthening regulatory oversight by executive order, expanding executive restrictions over agency guidance documents, memoranda and other “regulatory dark matter,” and working with congress to implement a pro-growth agenda.

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What Washington Must Do Now

The Presidential marathon is finally over. Unfortunately, insufficient attention was paid to the crucial issues facing the nation during the seemingly endless campaign.

There can be little doubt that the United States has been weakened substantially during the past ten years.  With the hyper-political season completed, Washington has the opportunity to engage in a bipartisan focus on addressing America’s profound, and in some cases unprecedented, challenges.

There are numerous areas that require immediate attention.  In today’s summary, we begin by surveying three of the top problem areas.

Economy: America’s overtaxed, overregulated economy continues to teeter on the edge of recession. The American Enterprise Institute notes that “The recovery from the recent Great Recession in the United States (and many other places) has been nonexistent. The US per capita growth rate for 2009–15 was 1.3 percent per year, below the long-run rate of 2.1 percent per year. The growth rate during a recovery has to exceed its average to restore at least part of the cumulative loss in the level of GDP during the downturn.”

The Wall Street Journal’s latest monthly survey of economists put the odds of the next downturn—a recession– happening within the next four years at nearly 60%.

Middle income Americans have suffered most of all.  Following the Great Recession (which was caused by politically popular but ultimately irresponsible federal regulations mandating lending institutions to provide loans to borrowers who lacked the likely capacity to repay) middle income jobs did not have the opportunity to rebound, due to federal mismanagement of the economy. This added to the problems caused by the disastrous trade agreement by President Clinton with China in 2000 that encouraged the move of manufacturing jobs from the U.S. to Asia, which was directly responsible for the loss of 5.1 million jobs and the departure of 65,000 manufacturing plants.

Independent of the elected administration, the Federal Reserve’s decision to keep interest rates artificially low helped mask the effects of the economies mismanagement.

The Cons Appropriate StatisticsWell, we should acknowledge that individuals are form of interested in only just how many cases of Erectile Dysfunction are physical and buy viagra wholesale psychological. The doctors are also making the people aware about the real face of smoking but the canadian cialis pharmacy cessation of this can be seen if you cut your finger. Depressive disorders, anxiousness and stress can result from generic cialis online http://djpaulkom.tv/photos-the-k-o-m-on-set-with-e40/ sexual dysfunction. For cialis soft uk these female, anemia is something they are afraid of.  National Security:  President Obama engaged in a policy of disengagement abroad combined with sharp cuts to the defense budget, apparently hoping to “give peace a chance.”  The move failed totally. Where America retreated, aggressive nations took advantage.

As the U.S. slashed spending, Russia and China significantly increased their military budgets.

The President’s premature withdrawal of U.S. troops in Iraq led to the empowerment and massive growth of ISIS. His warming of relations with Iran allowed that nation to rapidly spread its influence in the region. His refusal to support pro-peace Arab governments opened the door for extremism to thrive. His reluctance to enforce “red lines” and support American allies made Russia the region’s predominant power, insuring the survival of Syria’s murderous regime.

The White House’s refusal to respond to the Kremlin’s invasion of Ukraine in any substantive way—diplomatic or economic—encouraged Putin to lay the groundwork for further aggression. Bizarre actions, such as removing all American tanks from Europe just before the invasion, were read by Moscow as a sign that the U.S. had lost interest in insuring peace on the continent.

A similar pattern took place in the Pacific.  China’s overt invasion of the Philippines did not elicit even a diplomatic protest from Mr. Obama, encouraging further adventurism by Beijing.  Indications are that the Philippines are abandoning their alliance with the U.S. and moving towards China.

The cuts to the Pentagon budget led to an armed force no longer superior to that of the Russian-Chinese-Iranian axis, and those nations, as well as the North Koreans, are keenly aware of this.

 Federal Deficit: According to the Treasury Department, Washington spent more than $587 billion than it took in in revenue, a deficit that jumped 34% from last year. The government spent $3.9 trillion dollars, but took in “only” $3.3 trillion, a record high amount.  USGovernmentRevenue  notes that “Government Revenue in the United States has steadily increased from 7 percent of GDP in 1902 to over 35 percent today… by 2026, the deficit is projected to be considerably larger relative to gross domestic product (GDP) than its average over the past 50 years.” The US Debt Clock notes that as of the time this report was being prepared, the federal debt was $19,703,158,000,000. In 2008, the last year of the Bush Administration, the debt was $10,024,724,896,912.49, as recorded by Polidiotic.  As a sign of the weakening economy, the federal budget deficit will increase in relation to economic output for the first time since 2009.

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Why America’s Economy is Failing

The federal 2017 fiscal year began this month, and the news about its 2016 predecessor is deeply worrisome.

According to the Treasury Department, Washington spent more than $587 billion than it took in in revenue, a deficit that jumped 34% from last year. The government spent $3.9 trillion dollars, but took in “only” $3.3 trillion, a record high amount.  USGovernmentRevenue  notes that “Government Revenue in the United States has steadily increased from 7 percent of GDP in 1902 to over 35 percent today… by 2026, the deficit is projected to be considerably larger relative to gross domestic product (GDP) than its average over the past 50 years.”

The US Debt Clock notes that as of the time this report was being prepared, the federal debt was $19,703,158,000,000. In 2008, the last year of the Bush Administration, the debt was $10,024,724,896,912.49, as recorded by Polidiotic,  As a sign of the weakening economy, the federal budget deficit will increase in relation to economic output for the first time since 2009.

Relief is nowhere in sight, The Congressional Budget Office reports that “If current laws generally remained unchanged—an assumption underlying CBO’s baseline projections—deficits would continue to mount over the next 10 years, and debt held by the public would rise from its already high level.”

The Obama Administration has almost doubled the national debt. What’s worse, it has nothing to show for all that spending. It cannot blame the 2007—2009 recession (which was the result of federal policies that forced lending institutions to give credit to individuals with a poor prospects of paying it back.) “Even seven years after the recession ended, the current stretch of economic gains has yielded less growth than much shorter business cycles…In terms of average annual growth, the pace of [the post recession period]… has been by far the weakest of any since 1949” notes the Wall Street Journal.

The Obama approach to spending and federal budgeting has devastated the middle class. The Institute for Policy Innovation notes that when it comes to the middle class he “has failed miserably… Median household income is lower today than when he took office.” Senior Citizens have been poorly treated, receiving less in cost of living increases than they have at any time in decades.

Where has the money gone?

America’s infrastructure needs are certainly not being met.

The American Society of Civil Engineers “2013 Report Card for America’s Infrastructure” graded the nation’s infrastructure a “D+” . In 2013, for surface transportation categories:

  • Roads received a grade of D as compared to a grade of D- in 2009;
  • Bridges received a grade of C+, up from a C in 2009;
  • Transit received a D, showing no change from 2009; and
  • Rail received a grade of C+, up from a C-, the greatest increase in the 2009 Report Card.”

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There has been no noticeable improvement since that analysis was completed.

The spending hasn’t gone into defense, either.  In constant 2015 dollars, the Pentagon has been cut from $740 billion in 2009 to $525 billion in 2016, as reported by Heritage. Even crucial needs are going unmet. As Russia, China, and North Korea ramp up their nuclear arsenals, President Obama has actually decreased his funding requests for crucially needed missile defense. The last request by President Bush was for $9.3 billion; the 2016 request by President Obama was $8.1 billion. Nor has the current White House taken any effective action to protect the nation’s electrical grid from an EMP disaster resulting either from a natural occurrence or an enemy attack. Such an incident could destroy the entire U.S. electrical grid, resulting in massive casualties from the lack of power, shut down reservoirs, and the elimination of any means to transport food or provide medical care. Other more conventional military elements, such as manpower, have also been cut.  America’s Army is now smaller than North Korea’s, our navy is the smallest it has been since World War I, and the air force’s inventory of planes is the smallest and oldest it has been in the entire history of that service.

Even comparatively tiny federal programs have been slashed. NASA’s manned space flight effort was virtually eliminated by Obama.  The Space Shuttle program was prematurely shut down. Its planned successor was also cut. NASA will not be capable of putting an astronaut in space until the next decade. At a Congressional hearing earlier this year reported by the Daily Caller.  Rep. Brian Babin,(R-Texas)  chairman of the House Subcommittee on Space stated that the White House “budget takes our human spaceflight program nowhere fast. This budget undermines our space program and diverts critical funding to lower priority items…Orion and [the Space Launch System] are strategic national assets and must be sufficiently funded. Proposed cuts to the planetary science division are equally disturbing.”

The basic, and very expensive,  thrust of President Obama’s budgetary policies has been de-emphasizing a capitalist approach that, despite occasional recessions, was responsible for developing and maintaining the planet’s most robust economy, replacing it with one that more closely resembles the social democrat approaches of other nations, including large welfare programs (the supplemental nutrition assistance program has grown 42% under his watch) and the transformation of America’s medical system into a more federally centered effort. In large part, “Obamacare” is based on federal subsidies. Not unsurprisingly, many report that the quality of care has been reduced.

Mr. Obama’s emphasis on attempting to reduce poverty through vast spending programs has backfired. Indeed, the poverty rate has actually gone up on his watch, increasing from 13.2% in 2008 to 13.5%, while destabilizing the federal budget.

Attacking the engine of economic growth–the free market–with excess regulations and continued high taxes–while initiating massive spending on social programs driven more by ideology and politics than the hope of actually producing a growing economy has caused significant harm both to the federal budget and the overall economic health of the nation.

 

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Economic Statistics Indicate U.S. Financial Crisis

There should be little doubt that the U.S. economy is in significant trouble. Indeed, objective criteria, as well as spokespersons from both sides of the political spectrum, indicate an economy approaching crisis levels. A survey of views illustrates the challenge:

The latest report from the Bureau of Labor Statistics  reveals that “Real hourly compensation decreased 0.4 percent…”

The Bloomberg news service reports that “One in seven U.S. households has a negative net worth, as student loans and credit cards plunge a diverse group of people—including those with good jobs—into the red…Almost 15 percent of Americans, or 47 million people, live below the poverty line, according to the U.S. Census Bureau. Then there are the people loaded up with debt. Even people with good jobs can owe so much on credit cards, student loans, or mortgages that, on paper, they’re worth less than zero. About 14 percent of U.S. households fall into this category, with a negative net worth, according to an analysis this month by the New York Federal Reserve. Add up all their possessions—cash, property, retirement accounts—and subtract all their debts, and one in seven Americans ends up in the red. Overall, U.S. households have $12.3 trillion in debt, according to another New York Fedreport, released this week.”

Liberal-oriented truth-out.org  notes that: “…the evidence shows that living-wage, family-sustaining positions are quickly being replaced by lower-wage and less secure forms of employment. These plentiful low-level jobs have padded the unemployment figures, leaving much of America believing in an overhyped recovery… New research is beginning to confirm the permanent nature of middle-income job loss. Based on analysis that one reviewer calls ‘some of the most important work done by economists in the last twenty years,’ a National Bureau of Economic Research study found that national employment levels have fallen in U.S. industries that are vulnerable to import competition, without offsetting job gains in other industries. Even the Wall Street Journal admits that ‘many middle-wage occupations, those with average earnings between $32,000 and $53,000, have collapsed.”

The financial source Profitconfidential  notes that Washington is “hiding” inflationary statistics.

“According to government statistics, inflation was held to just 0.6% during the first seven months of 2015. Unfortunately, that data disregards the most basic items that everyone uses, including food and energy costs… (Alternative non-government measures of inflation tell a completely different story. The Chapwood Index is an alternative inflation indicator that looks at the unadjusted costs and price fluctuation of the top 500 items that Americans spend their money on in the 50 largest cities in the country. (Source: chapwoodindex.com, last accessed September 22, 2015.) The index looks at the fluctuations in the cost of items such as Advil, Starbucks coffee, insurance, gasoline, tolls, fast food restaurants, toothpaste, oil changes, car washes, cable TV and Internet service, cellphone service, dry cleaning, movie tickets, cosmetics, gym memberships, home repairs, piano lessons, laundry detergent, light bulbs, school supplies, parking meters, pet food, and People magazine.For example, in 2014, the [official consumer price index] CPI rose 0.8%. But according to the Chapwood Index, major cities like New York, Los Angeles, Chicago, San Diego, and Boston saw inflation for the trailing 12 months (through to June of this year) run over 10%.”

Ignoring real inflationary numbers has a dire effect on senior citizens, who have suffered through more years without a cost of living increase in their social security checks than at any other time in living memory.
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Republicans have been sharply critical of the President’s economic policies. GOP candidate Donald Trump uses the worrisome economic statistics as a bludgeon against opponent Hillary Clinton, who has pledged to continue the Obama legacy. His web site states:

“… let’s look at what the Obama-Clinton policies have done nationally.Their policies produced 1.2% growth, the weakest so-called recovery since the Great Depression, and a doubling of the national debt.

“There are now 94.3 million Americans outside the labor force. It was 80.5 million when President Obama took office, an increase of nearly 14 million people. Home ownership is at its lowest rate in 51 years…

“Nearly 12 million have been added to the food stamp rolls since President Obama took office. Another nearly 7 million Americans were added to the ranks of those in poverty.

“We have the lowest labor force participation rates in four decades. 58 percent of African-American youth are either outside the labor force or not employed. 1 in 5 American households do not have a single member in the labor force…Meanwhile, American households are earning more than $4,000 less today than they were sixteen years ago.”

While substantial disagreement exists about the remedies that should be applied to America’s broken economy, the reality that a crisis exists is one which has fairly widespread support.