When exactly does “Recovery Summer” begin? The administration is telling us things are getting better but they’re not

WASHINGTON, DC—“Recovery Summer” seems to be out of synch with the calendar. According to long held belief, summer is wedged between spring and fall, occurring from June through August. But August is here and the last two months haven’t shown us recovery.

The latest figures out aren’t encouraging or supportive of the administration’s schedule. The Washington Times puts those numbers in perspective:

“From a peak annual growth rate of 5 percent last autumn, the measure of gross domestic product slid to 3.7 percent in the first quarter of 2010 and was down to 2.4 percent by the end of June.”

2.4 percent? That’s anemic at best with a growth rate of 5+ percent needed over at least two to several quarters to pull the United States out of recession. So the administration is doing what it can to fix the problem—the problem of taking responsibility for the recovery summer non-start.

Treasury Secretary Timothy Geithner told Good Morning America’s audience to go back to sleep and wait for the worst to be over, when you wake up in a few months (or years) the economy will be roaring again. Meanwhile his boss blamed the failed policies of the past administration and lambasted republicans for not having any new ideas—that should get the economy back on track.

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Jobless rate drops slightly as more Americans stop looking for work Despite spending $787 billion, the economy and unemployment lag

WASHINGTON, DC—The Bureau of Labor and Statistics released June’s unemployment numbers, recording a drop in the jobless rate from 9.7 to 9.5 percent. Good news right? Not so fast. While President Obama and Vice President Biden continue their “Summer of Recovery” fantasy tour, the jobless rate fell because more people have given up looking for work, without those to count into the U-3 index (652,000), the unemployment rate dropped.

Private businesses added 83,000 jobs in June, but the government dropped 225,000 census jobs, bringing the total to 7.9 million jobs lost since the Great Recession began in December of 2007. Though counterintuitive, the unemployment rate drop comes as the BLS reports a net 125,000 jobs were lost in June—again, thanks to those poor U-6 schlubs that have become so discouraged, they’ve stopped looking for work (the U-6 rate stands at 16.5 percent, unchanged from June of 2009).

The president though has a decidedly different take, call it suspension of disbelief, while touting his stimulus as saving the economy in Racine, Wisconsin telling a crowd suffering an unemployment rate of 14 percent, “…every economist who has looked at it has said that the recovery did its job…”

-- Killswitch Politick

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The ghosts of Bush’s TARP President Obama isn’t to blame for falling incomes, but he soon will be

American’s real personal income fell 3.2 percent over the last year. While many conservatives will be pointing their finger at the 44^th President, they should first wag it at the 43^rd. President Bush began the latest experiment with Keynesian economics—a theory that purports mass government spending will lead to reciprocal private sector spending and boost the economy.

While it is true Mr. Obama signed the stimulus package, the damage was coming long before he put ink to paper.

The lesson of other countries doesn’t seem to daunt modern day politicians. Republicans—traditionally spending hawks—has crossed over into the FDR way of thinking. It was a republican president that signed the Toxic Asset Relief Program and practically every GOP seat-holder supported it. What followed were massive bailouts of corporations that were failing not because of actual market forces, but market forces created by bad paper that was pushed by a congress eager to make homeownership access more accessible to borrowers that would not otherwise qualify.

Just around the corner is more fallout and Mr. Obama will certainly own it. The economy is not improving enough to move out of recession and with the administration’s current spending, taxes will continue to rise and inflation will inevitably set-in; that means less real personal income.

So, the federal government will be taxing its citizens more on less income.

-- Killswitch Politick

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Raising federal debt limit

Democrats are arranging to allow the government's debt to distend by nearly $2 trillion to pay for the wars in Afghanistan and Iraq. The effort has nervous moderate Democrats maneuvering to win different deficit-cutting tools as a charge for their votes, sparking battles between the House and the Senate and with influential interest groups on both the right and the left.

The whole strategy is precarious because of brinksmanship involving moderate and blue-dog democrats who are insisting a bipartisan deficit reduction task force with exclusive powers to propose spending cuts or tax increases that would assure House and Senate votes.

Playing tit-for-tat, moderate House democrats have that their votes for any debt limit increase depend on securing a "pay-as-you-go" budget law ensuring that new tax cuts or new spending programs do not add to deficits.

Under a pay-as-you-go rule, if compensated cuts or revenue hikes are not found to pay for new policies, across-the-board spending cuts would hit targeted programs such as farm subsidies and Medicare.

Minority republicans are outright refusing to offer any support for raising the debt ceiling.

Rep. Todd Tiahrt (R-KS) said, "Instead of reducing the size of government and controlling spending, Democrats are planning to raise the debt limit by $1.8 trillion, putting American taxpayers in even deeper debt to countries like China".

Vice President Joe Biden, Majority Leader Steny Hoyer, (D-MD.), blue-dog leaders and Senate Budget Committee Chairman Kent Conrad, (D-ND), were engaged in numerous sets of negotiations in an effort to shatter the impasse between House and Senate dems.

But that bill passed the House only because of a quirky rule that automatically passes debt limit legislation - without an up-or-down vote - when Congress ratifies its annual budget blueprint.

The debt limit problem comes as Congress is wrapping up its annual appropriations bills, including a $1.1 trillion omnibus measure pending in the Senate. A vote to cut off a GOP filibuster of that measure was scheduled for this past weekend.

As with raising the federal debt limit, the omnibus appropriations bill is opposed by most republicans.

The omnibus bill is in addition to an infusion of cash to domestic agencies in Q1 economic stimulus bill and a $410 billion measure back in March that also conferred budget increases well above inflation.

Candidate Obama decried the reckless spending of his predecessor, and promised a new era of fiscal responsibility, President Obama now finds himself partnered with a democrat controlled Congress on the biggest spending spree in American history. Just as with most of Candidate Obama’s criticisms, President Obama has found it much harder to quarterback from the Oval Office than from the campaign trail.

-- Killswitch Politick

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Uncovering Recovery.gov

The Obama administration has been talking recovery in the private sector, pointing to signs of anecdotal economic upturns, but last week, ABC News uncovered a shocking slight-of-numbers on the government’s own website, Recovery.gov, finding stimulus success statistics to being completely false. Some of the examples were: the 15th congressional district in Arizona claimed 30 jobs have been saved or created with $761,420 and $19 million in Oklahoma to create 15 jobs, and 39 jobs created in Iowa with $10.6 million tax-payer dollars. There’s just one problem with these facts – none of these congressional districts actually exist.

Now, aside from the indisputable fact that these are egregious errors, if the figures were accurate, the price-tag for each job created or saved would have cost the American people $361,445.47 per job. And in Arkansas, Recovery.gov lists 50 jobs were created through the purchase of a single $1,000 lawnmower.

And the list goes on…

Connecticut's non-existent 42nd district claims 25 jobs created with $0 stimulus dollars

$34 million spent for the Navajo Housing Authority in Arizona’s 86th district, which is actually located in Arizona’s 1st congressional district

$148.9 million spent on 40.3 jobs in the US Virgin Island’s 1st and 99th congressional districts – neither of which exists

In the Northern Mariana Islands, $1.5 million created 3 jobs in the nonexistent 69th district

142 jobs produced from $35 million in the phantom 99th district of the Northern Mariana Islands

In Puerto Rico’s 99th fictional congressional district, $47.7 million was spent to produce 291 jobs


Recover Board Communications Director Ed Pound said, "We report what the recipients submit to us." He went on to explain that the board receives declarations from the recipients, be they state governments, other federal agencies, or universities, "Some recipients clearly don't know what congressional district they live in, so they appear to be just throwing in any number. We expected all along that recipients would make mistakes on their congressional districts, on jobs numbers, on award amounts, and so on. Human beings make mistakes."

But we-thought-so excuses aren’t being had by Congress, Chairman of the House Appropriations Committee, David Obey (D-WI) fumed, "The inaccuracies on recovery.gov that have come to light are outrageous and the Administration owes itself, the Congress, and every American a commitment to work night and day to correct the ludicrous mistakes."



-- Killswitch Politick

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Raising the federal debt limit amidst spending induced economic turmoil

Shadows of 1995’s government shutdown loom, but are likely to be dispersed by year’s end. The Obama administration had asked Congress to approve a debt ceiling increase by at least $1 trillion dollars or up to $1.5 trillion.

Record high budget deficits caused in-part by two ineffective stimulus spending packages, are driving the national debt closer to its $12.1 trillion statutory limit. The administration’s proposed expansion has already passed in the House of Representatives and would get the government through the November 2010 midterm congressional elections without requiring another raise.

Preceding a 2006 Senate vote to extend the debt limit, then Senator Obama said in a floor speech, “Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership.”

And now that Senator Obama is President Obama, those critiques no longer apply. Having already spent $787 billion on a stimulus package that has yet to produce any marked results, the President continues to champion a $1 trillion health care reform plan and has talked about passing another stimulus. In August, United States Treasury Secretary Timothy Geithner sent a letter to congressional leaders asking them to promptly raise the existing $12.1 trillion debt limit, cautioning then the debt could have hit its ceiling as early as October.

The national debt ceiling already has been hiked three times in the past two years (Congress last upped the debt limit in February when it passed the $787 billion stimulus package) and passage in the House thereafter will raise the ceiling to $13 trillion. The fiscal year deficit for 2009 came in at a record $1.42 trillion, which is more than three times the record set just last year.

With polls consistently showing Congressional approval ratings in the tank and the Senate’s Majority Leader in jeopardy of losing his reelection bid and unemployment over 10%, the American people aren’t likely to react favorably, so Hill democrats are trying to add the ceiling increase to a Defense Authorization Bill.

Candidate Obama decried the reckless spending of his predecessor, and promised a new era of fiscal responsibility, President Obama now finds himself partnered with a democrat controlled Congress on the biggest spending spree in American history. Just as with most of Candidate Obama’s criticisms, President Obama has found it much harder to quarterback from the Oval Office than from the campaign trail.

-- Killswitch Politick

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