Once again, the latest economic reports reveal very bad news for the U.S. economy in general, and the middle class in particular.
The Bureau of Economic Analysis (BEA) reports that America’s real GDP-gross domestic Product—is a barely-above recession 0.8% for the first quarter of 2016. That’s even less the dismal 1.4% for the last quarter of 2015. Incorporated into that figure is the latest trade deficit of $40.4 billion.
The New York Federal Reserve adds to the gloomy news with its latest Househild Debt and Credit Report, indicating that Americans are falling deeper into debt. “Aggregate household debt balances increased in the first quarter of 2016. As of March 31, 2016, total household indebtedness was $12.25 trillion, a $136 billion (1.1%) increase from the fourth quarter of 2015… Mortgage balances, the largest component of household debt, increased in the fourth quarter. Mortgage balances shown on consumer credit reports stood at $8.37 trillion, a $120 billion increase from the fourth quarter of 2015. Balances on home equity lines of credit…dropped by $2 billion, to $485 billion.”
The Bureau of Labor Statistics piles on more worrisome news. “Real average hourly earnings for all employees decreased 0.1 percent from March to April, seasonally adjusted…This result stems from a 0.3-percent increase in average hourly earnings being more than offset by a 0.4-percent increase in the Consumer Price Index for All Urban Consumers…Real average weekly earnings increased 0.2 percent over the month due to the decrease in real average hourly earnings combined with 0.3-percent increase in the average workweek.”
The BLS figure of 0.4% increase in consumer prices doesn’t reveal how bad the inflationary impact truly is, since that figure doesn’t include the vital areas of food and energy. When those items are included, inflation is at 1.1%.
The Obama economic policy is becoming clearer. There is a substantial tilt towards those on government assistance, employees on the low end of the wage scale, and foreign born workers at the expense of the middle class. According to the BLS foreign born workers, of which there are 26.3 million in the U.S. labor force, comprising 16.7 percent of the total, have a .5% lower unemployment rate.
The President’s program of increased public assistance and emphasis on job policies that have worked better for foreign born workers has had a detrimental effect on Americans both in the middle and lower income brackets, and the problems could get far worse.
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Mr. Obama has attempted to take action, without the permission of Congress, to render illegals eligible for federal benefit programs for which they are not currently eligible, including Social Security, disability, and Medicare, despite the fact that funds are already insufficient to pay for those who have paid into those programs for a lifetime.
According to the Pew Research Center …since 2010, Social Security’s cash expenses have exceeded its cash receipts. Negative cash flow last year was about $74 billion, according to the latest trustees’ report, and this year the gap is projected to be around $84 billion. While the credited interest on all those Treasuries is still more than enough to cover the shortfall, that will only be true until 2020…Social Security’s combined reserves likely will be fully depleted by 2034.”
The President’s priority can be seen in a fact recently reported by the Washington Examiner, which reported that Mr. Obama’s budget of $17,613 for each of the approximately 75,000 Central American teens expected to illegally cross into the United States this year is $2,841 more than the average annual Social Security retirement benefit.
The overall impact of the Obama economic policy which slights the middle class was analyzed last September by Investors.com
“After six-plus years of President Obama’s … policies, middle-class families have seen their incomes decline and more families have fallen into poverty…The overall poverty number … climbed by almost 600,000 among blacks in 2014…the middle class is, incredibly, worse off than at the end of the Great Recession…From 2009 to 2014, real median household income dropped by more than $1,000 — or 2.3% — to $53,657. (And that decline would likely have been steeper if not for a 2013 change in the way the Census does its annual survey.)”