Tuesday, May 25, 2010

Home foreclosures break record in Q1 2010
Foreclosure rates have risen 5% since Q4 2009

WASHINGTON, DC—Mortgage delinquencies and foreclosure actions rose from 4.58 percent to 4.63 percent from the end of last year to March, 2010. The five percent rise translates to one in seven homes being delinquent or in foreclosure.

And these numbers are directly attributable to the unemployment rate, which rose again in April 2010 to 9.9 percent, with the U-6 rising to 17.1 percent:

In April Arkansas's Unemployment Rate Remained At 7.8 Percent. (U.S. Bureau of Labor Statistics, www.bls.gov, Accessed 5/21/10)

In April, California's Unemployment Rate Remained 12.6 Percent. (U.S. Bureau of Labor Statistics, www.bls.gov, Accessed 5/21/10)

In April, Colorado's Unemployment Increased From 7.9 Percent To 8 Percent. (U.S. Bureau of Labor Statistics, www.bls.gov, Accessed 5/21/10)

In April, Indiana's Unemployment Rate Increased From 9.9 Percent To 10 Percent. (U.S. Bureau of Labor Statistics, www.bls.gov, Accessed 5/21/10)

In April, Nevada's Unemployment Rate Increased From 13.4 Percent To 13.7 Percent. (U.S. Bureau of Labor Statistics, www.bls.gov, Accessed 5/21/10)

In April, Oregon's Unemployment Rate Remained At 10.6. (U.S. Bureau of Labor Statistics, www.bls.gov, Accessed 5/21/10)

In April, Pennsylvania's Unemployment Remained At 9 Percent. (U.S. Bureau of Labor Statistics, www.bls.gov, Accessed 5/21/10)

These numbers come after the administration had publicly stated that passing the Stimulus Package would keep unemployment under 8 percent. But despite the stimulus package, the economy continues its anemic pace. The Wall Street Journal is now forecasting a double-dip recession or "W" shaped recovery.

-- Killswitch Politick

Tuesday, May 18, 2010

Federal deficit soars in April
The federal deficit expanded over two times as much as estimated

WASHINGTON, DC—The US Treasury Department stated April’s 2010 federal deficit numbers were $82.69 billion, more than twice a projected $40 billion. What’s more this is among only thirteen Aprils in the past 56 that has not shown a surplus and the US debt is 53 percent of GDP—on pace to rise to 140 percent by 2030 (to place that number in perspective, Italy’s debt to GDP is 125 percent, while Greece is 115 percent.

Historically, federal spending has ranged between 18 to 22 percent of the GDP. Beginning with Bush 43, that was increased to nearly 21 percent of GDP and during President Obama’s first eleven months, federal spending increased to 24.7 percent. Making 2009 the highest level of federal spending since World War II.

Per household, federal spending has risen since the recession began as of October of 2008 it was $24,000, under the Obama administration, that number will reach $36,000 per household by 2020. These figures are simply unsettling to say the least. But Congress and the White House seem undaunted by the reality that spending more will not lead to prosperity.

-- Killswitch Politick

Tuesday, May 11, 2010

Latest economic forecast shows recession lingering on
A new normal for unemployment?

WASHINGTON, DC—The latest unemployment numbers show the jobless rate has crept up from 9.7 percent to 9.9 percent. While an initial reported 290,000 jobs were created in April, but that number is subject to revision. What’s more, 66,000 of those jobs or nearly 23 percent are temporary Census jobs.

It seems the rise in unemployment numbers are due to approximately 195,000 formerly discouraged workers that were part of the larger U-6 measure (which likewise increased to 17.1 percent from 16.9 percent) again beginning to look for work. The American people were assured that passing the stimulus bill would keep unemployment under 8 percent, yet the unemployment rate has remained largely unchanged at just over or just under 10 percent.

So what has America got to show for $787 billion stimulus? Apparently more government workers, according to Gallup, the government is outpacing private sector hiring 40 percent to 28 percent. Even state and local governments combined are hiring 2 percent more than the private sector but are actually letting more state and local employees go simultaneously.

The effects of stimulus chiefly helped states (for a time) and large corporations, but has not curbed the recession—once again proving Keynesian economics simply don’t work, nor put people to work in the private sector.

-- Killswitch Politick

Tuesday, May 4, 2010

Getting real about the national deficit?
The Fed Chair is telling Washington the Reagan model was the right model

WASHINGTON, DC—Ben Bernanke, the Federal Reserve Chairman has told a White House debt commission the United States needs to seriously begin deficit cutting which currently stands at $1.4 trillion. Mr. Bernanke went on to urge an engaging, sobering reevaluation of the US Tax Code but made no specific recommendations.

Rudy Penner, a former director of the Congressional Budget Office under Ronald Reagan told the debt commission, "I think it just screams out that we do something about this tax code." 

Conservatives have long argued that cutting marginal tax rates as well as reducing capital gains taxes and corporate taxes will bring more money into the Treasury via tax revenue and indeed, the three times rates were reduced by Presidents’ Kennedy, Reagan, and Bush 43, tax revenue increased substantially. But tax cutting is only one part of the equation—federal spending must be cut as well, not just minor percentage cuts in the rate of growth.  

Liberals have argued against this method (and history) and against cutting federal spending—demonizing the first as “tax cuts for the rich” and the latter is “draconian cuts in Medicare and Medicaid”.

-- Killswitch Politick