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Economic Growth So Strong It Can’t Be Ignored

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When the New York Times has to reluctantly admit the existence of an economic boom, while doing everything in their power to minimize and distract from the basic facts, you know that a strong economy has really arrived.

First we had unemployment reported at a 6 year nationwide low of 4.7% – well under 4% in many areas of the country. A rate so low that only two years in the last 40 have had lower unemployment. In addition, the actual rate of employment is at a record high of over 66%, a rate exceeded by only 3 years in the last 40. That’s good news, but the latest reports on the economy show even more encouraging data.

Job growth goes hand in hand with low unemployment, and in the first quarter of this year we’ve seen an unprecedented total of 590,000 new jobs added to the workforce. This continues the trend of massive job growth which has produced an impressive increase of 2.7 million new jobs since the first quarter of last year.

Another bit of good news in the job sector is that the trend for hourly wages to increase which began last year has continued, with the average non-farm hourly wage up $.55 an hour from March of last year, meaning more than $1000 a year in additional earnings for the average worker. Gains were strongest for highly skilled workers, with computer manufacturing jobs increasing by $.76 an hour on average, utility workers gaining $.81 an hour, those providing professional and business services going up $.93 an hour and the big winners were those in information services who gained $1.17 an hour. Overall this is the second largest rate of wage increase in any year since records started being kept in 1964. The average rate of wage increases in the last 40 years has been $.33 per year.

In the latest report from the Bureau of Economic Analysis the raw quarterly growth rate in the Gross Domestic Product for the first quarter of this year is reported at an unprecedented 8.2%. That’s an incredible rate of economic growth, a full 3 points higher than the very impressive 5.2% reported in the fourth quarter of last year. Adjusted for the current value of the dollar the GDP growth was even better relative to last year, at 4.8% compared to 1.7% in the fourth quarter of 2005.

This GDP surge was largely driven by consumer spending – an area which had been lagging until recently – which increased by 7.4%in the first quarter of 2006. This was largely driven by a growth in personal income which started last year with a growth rate of 9.4% in the fourth quarter of 2005 and 6.7% in the first quarter of 2006. Disposable income was up even more impressively – despite increases in housing and fuel prices – by 9.8% in the fourth quarter and 5.8% in the first quarter of this year.

Business spending was up even more dramatically, although it’s a smaller part of the economic picture. Spending on equipment and software was up 16.4% this quarter, the highest rate of business spending since the Tech Boom in the first quarter of 2000.

While consumers are spending more, the rate of increase in consumer borrowing, which has been an ongoing concern, has slowed significantly in the first quarter of 2006. February set a record low with borrowing increasing only 1.8%. This puts the first quarter significantly below last year’s average, which was historically low. Even better, credit card borrowing – the worst kind for consumers – has been held to a growth rate of only 3%, the lowest rate in 13 years. The issue of consumer debt is being hit hard by the political left, especially on Air America Radio, but the data suggests that the strong growth in employment and wages more than negates the very low rate of growth in borrowing.

A positive side effect of this growth in personal income is an increase in projected income tax revenues, a trend which if it continues would have a significant impact on the deficit. The Congressional Budget Office projected a 12.6% growth in personal income tax revenues for 2006. However the rate of increase in income tax revenues for the first quarter is estimated at 17.2%. If that same trend of higher growth applies to corporate taxes and social security taxes the net result would be about an additional $100 billion to apply to the deficit, almost cutting the rate of increase in half, and leading to a balanced budget several years earlier than projected.

Core inflation (not including fuel and food) is also down from the fourth quarter of last year, at 2%. That means that those workers who are earning more and spending more are not seeing prices rise as much as they had been, giving them more purchasing power. Soaring oil prices will likely have a negative impact on overall inflation during the coming year, but they may be balanced out by a projected decrease in housing costs.

The economy is doing so well that the Federal Reserve is considering raising interest rates one more time to try to slow growth a little bit before laying off the rate increases for a couple of years.

For a desperate attempt to put a negative spin on all of this, don’t forget to check out the article in the New York Times, where they try to throw in every possible red herring to distract from the simple fact that the Bush tax cuts – focusing heavily on the middle class and the working poor – have had a remarkable impact on a failing economy, turning it around and creating a burgeoning boom. This, of course, leads to one inevitable conclusion. We absolutely must make the tax cuts permanent to continue down the road to economic prosperity.

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About Dave Nalle

  • RedTard

    At least we won’t have to worry about having irrational exuberance with a republican in office.

  • Lumpy

    Wow. This is going to put the scare into the left. Last I checked people still voted their pocketbooks and with the economy so strong it’s going to be grim for the donkeyboys at the polls in November.

  • http://www.elitistpig.com Dave Nalle

    I went to a funeral this morning, and on the way back had the odd experience of listening to someone on Air America Radio called “The Credit Master” whose website at thecreditmaster.org doesn’t work, so that’s all the info I have on him. He was ranting and raving about the growth in credit card borrowing and how endangered consumers were and how everyone was going to be bankrupt before we knew it. Well, I knew there was something wrong with that perspective, so I did a little additional research, and now I’ve added a bit more to this article.

    Check out paragraph #8 which has the correct info on borrowing growth, which is actually at its lowest level in 13 years. So much for the ongoing disinformation campaign of AAR.

    Dave

  • http://absent-mind.blogspot.com/ Jet in Columbus

    Thanks Dave, you’ve inspired my next post.
    Love Jet

  • http://www.futonreport.net/ Matthew T. Sussman

    My company in particular took a big hit right after 2001 (it involved people travelling to places, so you can imagine why it would) and suffered layoffs but right now they’re hiring left and right. They want to almost double the amount of staff who train the product I train from 4 to 7.

  • gonzo marx

    example…in 1980 the unadjusted average wage for someone in the meat packing industry ( a very high risk production job) was between $16-19 an hour…

    now it is between $8-10

    to me, this Article should go right next to another by the same Author…titled “no one died in Iraq today”

    both paint rosy pictures that bear a Picasso like view of Reality

    your mileage may vary

    Excelsior?

  • http://absent-mind.blogspot.com/ Jet in Columbus

    Fear not gonzo and Matt, I’ve got an article in the process of being approved right now that started out as a response to this, but I figured I’d expand it and it was too long to be posted here.

    What worries me a little is that Dave’s probably the one who will approve it (yikes)

    NO STRIKE THAT I’d like to put in writing right here andand now that despite differences in political opinions, Dave Nalle is one of the most fairminded editors this site has. And I mean that.

    Stay tuned…
    Respectfully
    Jet

  • http://www.futonreport.net/ Matthew T. Sussman

    Gonzo, I wonder if this is like an Iraq war post — because then that means that Bush created the economy. I wonder.

    (I got a C in econ, so let’s give this a shot) Perhaps business is increasing because of innovation and marketing, and not one guy in a suit in D.C.?

  • gonzo marx

    well Suss, i neither credit nor blame the hrub for much of it

    however, if you look at the breakdowns, it appear that those whose income is already over the $200k mark are doing great, those between $75k and 200k are doing well…those between $50k-75k are holding their own….and those under $50k are having problems

    now, factor in the Debt carried by those groups as well…as well as the Debt carried by what passes for Industry left in our Nation

    abnd the picture could be argued to be very different

    i cited the other Post because the same Author likes to take what data suits him and paints the picture he views…his perogative, of course

    but due to un-accounted for Variables in the Iraq post…the situation is no where near as cheery today as that article would have one believe…and i do not think anyone could argue differently

    my Thought is that this Article may suffer the same problems over time as more unaccounted for Variables make themselves known

    and that this remains nothing more (like the other) than another Apologist puff piece for partisan,political purposes during a campaign year

    just my one sixth billionths of the world’s Opinion

    your mileage may vary

    Excelsior!

  • http://www.elitistpig.com Dave Nalle

    example…in 1980 the unadjusted average wage for someone in the meat packing industry ( a very high risk production job) was between $16-19 an hour…

    now it is between $8-10

    Gonzo, if you checked the links in the article you’d see that they include a link to detailed wages broken down by industry area, including meat packing under the food processing category. It’s shown as having remained stable over the past year at $13 an hour. It is indeed one of the weakest employment areas, but that doesn’t change the overall trend in wage growth. It’s one of very few industries which have remained stable.

    to me, this Article should go right next to another by the same Author…titled “no one died in Iraq today”

    both paint rosy pictures that bear a Picasso like view of Reality

    Then I suggest you didn’t read the other article you refer to, since the title was not intended to be an accurate description of the contents. In this case you certainly can’t be trying to make the argument you are in any serious way. The facts are too overwhelming to deny. Like the NYT you can bring up irrelevancies and misrepresentations, but there’s just too much positive news for you to effectively minimize it.

    Dave

  • http://www.elitistpig.com Dave Nalle

    however, if you look at the breakdowns, it appear that those whose income is already over the $200k mark are doing great, those between $75k and 200k are doing well…those between $50k-75k are holding their own….and those under $50k are having problems

    Once again, if you checked the sources you’d see how incorrect this is. That’s why I provided the links. The largest increases in wages were in professions earning in the area of $35,000 a year, well under your $50,000 threshold. In fact, the job gains I addressed were ONLY those for people earning a quantifiable hourly wage, the highest of which earn about $48,000 a year. So the entire sector of the workforce addressed in the article falls in your lowest income group. You can distract, distort and deny all you like, but the facts are the facts.

    now, factor in the Debt carried by those groups as well…as well as the Debt carried by what passes for Industry left in our Nation

    The debt growth figures in the article don’t take into consideration the growth in working and spending population. Overall debt has increased because the number of debtors has increased, not because individuals are necessarily in more debt.

    abnd the picture could be argued to be very different

    If you choose to ignore the facts, sure.

    Dave

  • gonzo marx

    comment #10 sez…
    *It’s shown as having remained stable over the past year at $13 an hour. It is indeed one of the weakest employment areas, but that doesn’t change the overall trend in wage growth. It’s one of very few industries which have remained stable.*

    note the “remained stable” bit…

    now, add in the Variables of inflation, cost of living, rise in health insurance costs to the employee

    and you will see that this “stable” means that such a worker actually Nets LESS now than he did a few years ago with his stagnant “stable” wage

    THAT is my point…”growth” in some places does NOT mean that famous “rising tide that lifts all boats”

    merely making a point, i’ll leave the Thread be and let the gentle Readers find their own Question and formulate their Thoughts on veracity

    Excelsior?

  • gonzo marx

    P.S.

    my INdustry for non-management, and in the technical non-management (under engineer level) for ALL the US telecoms got between .25 and .30 ccents an hour raise for their “cost of living”

    MUCH less than the Variables i mentioned above..

    nuff said

    Excelsior?

  • http://absent-mind.blogspot.com/ Jet in Columbus

    You know, I have to theories
    1. Dave forgot to check the box marked “Satire” when he posted this
    2. Dave is serious.

    Either way, it’s a very scary thought!

  • gonzo marx

    no Jet, neither is the case…

    the Original Poster is quite serious, and firmly believes in what he has put forward….and that is not a bad thing in and of itself

    the problem here resides with a simplistic viewpoint that does not account for all the Variables or the Factors that skew simplified numbers

    example: much of the data suggested counts not only managers, but exectutive’s and CEO’s compensation packages as well…

    so, if your CEO of 10,000 employess makes 10 million, that skews your average, doesn’t it?

    add in those managers and executives and you see hwo the numbers wind up higher still

    so, they DO indicate raw averages, but have nothing to do with the vast majority of per-hour workers for the most part

    the original Poster is pretty careful with his numbers, but a bit more cavalier sometimes with his interpertations…colored as they are by his partisan objectives and viewpoints

    that does NOT mean there is no worthwhile data here, just that it shoudl be examined more closely before reaching conclusions, and taken with a volkswagon sized grain of salt

    Excelsior?

  • Reader

    You, sir, are an idiot.

  • gonzo marx

    a perfect example of what i mean is here…
    the Original Poster sez…
    *Core inflation (not including fuel and food) is also down from the fourth quarter of last year, at 2%. That means that those workers who are earning more and spending more are not seeing prices rise as much as they had been, giving them more purchasing power. Soaring oil prices will likely have a negative impact on overall inflation during the coming year, but they may be balanced out by a projected decrease in housing costs.*

    note, he does NOT count food and fuel..both are inherent to the actual calculations, but by removing them from the formula, you skew the final numbers to achieve the results desired, rather than accurately mathematically modelling objective Reality

    hope that helps

    Excelsior?

  • fartikus

    okay, so even ben bernanke last week said the tax cuts will not pay for themselves. where are we on laffer’s curve again? there is a reason gold is getting parabolic. with M3 stats gone we are approaching a weimar era…and they felt good for a time too.

  • Lumpy

    “example: much of the data suggested counts not only managers, but exectutive’s and CEO’s compensation packages as well…”

    I checked the link on wages. Did you? If you had you would have confirmed what the article says. The wage figures given are only for those working on a non-salary or hourly wage basis. That isn’t management except maybe at blockbuster.

    The numbers in this article look solid and well documented. Read the links before rejecting it all just because it doesn’t fit your politics. Right now you’re looking like a fool by denying facts when the documentation is right infront of u..

  • Lumpy

    For that matter do a little math yourself and save pain and embarassment. If inflation is at 2% and the avg wage went up 55 cents (3.5%) then the gain in wages far outstrips inflation. So much that if u add in gas and housing ou’re still ahead.

  • Reader

    lol, you believe government numbers on inflation? would you like to buy a bridge?

  • http://www.roblogpolitics.blogspot.com RJ Elliott

    Bush’s economic record, APART FROM THE DECIFIT, is honestly one of the greatest in history.

    He inherited a slumping economy. Don’t believe me? Read any serious, legitimate economic report from the second half of 2000. The economy was well on its way towards a recession by this time, thanks in part to the Clinton stock market bubble (which was built in part by the widespread, undiscovered corporate criminality that occurred on Clinton’s watch) finally bursting.

    The recession of 2001 was one of the shortest, and shallowest, recessions in recent American history. It was replaced with economic growth by the end of the year, DESPITE THE 9/11 ATTACKS.

    And the economy has been growing ever since.

    The stock market is now higher than when Clinton left office. (And this time, it’s not a bubble.) The unemployment rate is lower than when Clinton left office. (Despite millions of illegals flooding into the country since then.)

    Part of the credit for this economic boom goes to Bush’s tax cuts. Part of the credit goes to his spending hikes (at least if you’re a Keynesian). Part of it goes to the American consumer, who spends more than s/he earns, and saves almost nothing. Part of it goes to the housing boom. Part of it goes to the Fed.

    So, Bush should not receive ALL the credit for the current economic boom we are enjoying. But it is still a boom of historic proportions, and the media shouldn’t ignore that fact.

    (Oh, and the deficit came about from many different factors: increased spending, tax cuts, the Clinton recession, a global war, devastating hurricanes, etc. To blame the budget deficit solely on Bush’s tax cuts is like blaming a fat man’s premature death from a heart attack on the fact that he liked potato chips. Sure, it certainly played a role in his death, but what about his complete lack of exercise, his refusal to take blood-pressure meds, and his cocaine addiction?)

  • http://www.roblogpolitics.blogspot.com RJ Elliott

    “note, he does NOT count food and fuel..both are inherent to the actual calculations, but by removing them from the formula, you skew the final numbers to achieve the results desired, rather than accurately mathematically modelling objective Reality”

    Um, isn’t it the Fed itself that discounts food and fuel in order to calculate inflation?

    Now, you can argue that the Fed’s numbers are bogus because of this, but you can’t claim DN is cherry-picking his numbers here…

  • MCH

    …Oh, and the deficit came about from many different factors: increased spending, tax cuts, the Clinton recession, a global war, devastating hurricanes, etc…”

    Um, actually the “global war” you attempt to cherry-pick is the pre-emptive invasion and following occupation of a sovereign nation, premised on lies, fraud and deceit; at a cost to the U.S. taxpayer of $276.9 billion…and counting…

  • http://www.roblogpolitics.blogspot.com RJ Elliott

    The global war on terrorism ain’t just Iraq. It’s Afghanistan, too. And it’s increased security measures at home (like the creation of the Department of Homeland Security). And other things, too, which all cost money.

    But you are correct in saying that the war in Iraq has been very costly, both in terms of blood AND treasure. But it does NOT account for all, or even a large part, of the annual budget deficit.

  • http://www.elitistpig.com Dave Nalle

    Where oh where to start. So much misinformation accumulated while I was out for the day.

    THAT is my point…”growth” in some places does NOT mean that famous “rising tide that lifts all boats”

    Sure, gonzo. The 5600 people involved in the meat packing industry did not fare as well as others did. Plus they all just got rounded up by the INS and deported. I never said that every single person had an increase in hourly wage. I was just pointing out that the national trend is very positive. Every job situation is unique. That’s why we look at statistics instead of your job, my job or some other specific person’s situation.

    merely making a point, i’ll leave the Thread be and let the gentle Readers find their own Question and formulate their Thoughts on veracity

    As for veracity, every single one of my figures comes from a neutral, non-political source and is documented. If you have problems with veracity take them up with the BLS and the BEA.

    my INdustry for non-management, and in the technical non-management (under engineer level) for ALL the US telecoms got between .25 and .30 ccents an hour raise for their “cost of living”

    MUCH less than the Variables i mentioned above..

    That would be added on to what hourly wage? I’m guessing about $16 an hour, am I right? That does put you on the lower end of the curve, but it’s still almost a 2% wage increase, which more or less matches the core inflation rate.

    Dave

  • http://www.elitistpig.com Dave Nalle

    example: much of the data suggested counts not only managers, but exectutive’s and CEO’s compensation packages as well…

    so, if your CEO of 10,000 employess makes 10 million, that skews your average, doesn’t it?

    add in those managers and executives and you see hwo the numbers wind up higher still

    Except that the data I used specifically excludes management and salaried workers, so it is solely and exclusively the wages of hourly workers.

    so, they DO indicate raw averages, but have nothing to do with the vast majority of per-hour workers for the most part

    Except that you’re wrong, as is made very clear in the articl and in the data I linked to. The figures I used are exactly and only stats for per-hour workers.

    the original Poster is pretty careful with his numbers, but a bit more cavalier sometimes with his interpertations…colored as they are by his partisan objectives and viewpoints

    That’s why I provide both the data, the links and my intepretation. IMO it’s hard to reach a pessimistic conclusion from these figures, but you can try. The results will likely be as laughable as the NYT article.

    Dave

  • gonzo marx

    and as i stated above, the original Poster is very careful with his numbers…and note, i tried my best not to appear to even be arguing with those…merely pointing out that they don’t account for all variables..

    example…comment #26 sez…
    *That does put you on the lower end of the curve, but it’s still almost a 2% wage increase, which more or less matches the core inflation rate.*

    and i do agree, it does indeed match the alleged core inflation rate…

    now, please note above where i stated that due to the increase in health care coverage…not to mention the rise in other cost of living expenses (gasoline, and due to that food et al)..said worker NETS less take home than they did the previous year

    that was my only point…

    also not that above i do defend the original Poster’s points in a few areas

    but that is left by the side fo the road by those who don’t want to view things Objectively in a discussion

    fuck it

    Excelsior?

  • http://adamantsun.blogspot.com SteveS

    I’ve never voted in my life, based on the unemployment rate, hourly wages, or any economic indicators like that. I’ve always voted based on my situation, whether it’s good or bad, and everybody I know votes that way too.

    Did my situation improve? Did the company I work for thrive enough to give me a raise? Or did the company have to lay people off? etc. This is how I judge the economy, by my own situation and that of my friends.

    that the Bush tax cuts – focusing heavily on the middle class and the working poor – have had a remarkable impact on a failing economy

    as somebody right in the middle of middle class and working poor, I’d like to say I didn’t get a tax cut. I owe.

  • http://www.elitistpig.com Dave Nalle

    I can’t assess every individual circumstance, Steve, but the theory is that if the economic indicators are good then the millions of individuals like you around the country will on the whole be better off. As an individual I can vote based on my personal situation, but in predicting trends I have to look at the numbers, even if they’re meaningless to me as an individual.

    as somebody right in the middle of middle class and working poor, I’d like to say I didn’t get a tax cut. I owe.

    Your tax rate went down by at least 3%, Steve. That should mean that you owe less unless your wages also went up at the same time. If you’re in the bottom 50% of wage earners you likely pay almost no taxes at all under the current system whicha allocates only 5% of the total tax burden to that segment of the population.

    Dave

  • http://adamantsun.blogspot.com SteveS

    Hmm, I dunno. It’s hard to elaborate without revealing my salary. I’m middle class but close to the lower end. I have a dependent and the federal government does not recognize my relationship. My federal taxes are about 33% of income.

    Now I got a lot back from the state this year, but it all has to go to the fed, so I didn’t get squat.

  • http://theallinoneblog.blogspot.com Casey

    Maybe it’s the skeptic in me, but I have quite a few unemployed friends who can’t find work. You have to bear in mind that people who have been unemployed a certain amount of time (when their unemployment checks run out) aren’t counted in the system as being unemployed anymore.

  • http://www.elitistpig.com Dave Nalle

    Out of curiosity, Steve, how do you know the feds don’t recognize your dependent? Did you ask them or get a ruling on it?

    As I read the IRS guidelines, either you or your partner ought to be able to file as a head of household and take an exemption for your daughter. Naturally you can’t both take it and you wouldn’t be able to take it twice even if you were able to file as being married. There’s nothing in the IRS guidelines that says you have to be the biological parent of the child, you just have to be responsible for the child and she has to be resident in your house and under 13.

    Your federal taxes should NEVER be 33% of income. That’s one of the raw tax rates, but even without the dependent exemption you still have your personal exemption, which should cut out a big chunk of your income so that the 33% only applies to what’s left over. Plus, to be in the 33% bracket you have to be earning $154,000 a year or more. My guess would be that you’re likely in the 25% tax bracket ($30K-$71K).

    Let’s say you have the average of that – an income of $50,000. In figuring your tax you first deduct $8200 for the personal exemption of $3200 and the standard deduction of $5000. That leaves you with a taxable income of $41800. That’s taxed at 25% for a total tax due of $10,450. That’s actually an effective tax rate of only 21% on your whole income. If your income were lower the taxes paid and the effective tax rate would be correspondingly lower.

    There are also ways you could lower your effective income pretty dramatically. Didn’t you say somewhere that you were a contract employee? That means you qualify for a SEP IRA, which you could put 10% of your gross income into – that’s $5,000 deducted from your income before taxes, which would lower your tax bill by $1250.

    On the other hand, if you really are in the 33% bracket I feel very little sympathy for you and you ought to be filing a 1040 and using an accountant and itemizing your deductions, not to mention having a big tax-deferred IRA and a 401K (anyone can get one with a bank or broker now).

    Just for the record, I’m not a tax lawyer or an accountant, I’m just a guy who has been doing his own taxes for 30 years of increasing complexity.

    Dave

  • http://www.elitistpig.com Dave Nalle

    You have to bear in mind that people who have been unemployed a certain amount of time (when their unemployment checks run out) aren’t counted in the system as being unemployed anymore.

    I almost included this information in the article, but I didn’t want to go into a long digression explaining it. I personally believe that the index of employment is a better measure of the job situation than an index of unemployment, because it doesn’t measure who just lost a job, but rather who actually has a job. The problem is that to use it effectively you have to factor in census figures on people who are homemakers and disabled and then come up with the true employment figure. What I can tell you right off, though is that the gross figure for those employed generally goes up and down pretty much in sync with unemployment, which suggests that very few people who are out of work for long periods of time have much real interest in ever reentering the work force.

    Dave

  • troll

    * If you’re in the bottom 50% of wage earners you likely pay almost no taxes at all under the current system whicha allocates only 5% of the total tax burden to that segment of the population.*

    this is an outrage – !

    the poorer half gets a full 14% of the wealth to split up but only has to pay 5% of the tax burden…a clear systemic abuse of the richer half

    troll

  • http://adamantsun.blogspot.com SteveS

    Out of curiosity, Steve, how do you know the feds don’t recognize your dependent? Did you ask them or get a ruling on it?

    Sorry, I wasn’t clear, I should have written that as ‘I have a dependent and the federal government does not recognize my relationship with my spouse’.

    We don’t have to get into semantics of personal tax issues, but I just wanted to point out that the personal issues are what I vote by, not overall economic indicators. Everybody I know is the same.

  • http://www.elitistpig.com Dave Nalle

    Troll, I bet if you looked at the figures more closely you’d find that in that bottom half almost all of the taxes and almost all of the income were allocated to the top 10% of that half, because the bottom 40% should pay no taxes at all regardless of their income.

    And Steve, you’re right on. Everyone votes THEIR pocketbook, not someone else’s. All I’m saying with the statistics is that there are more full pocketbooks than there are empty these days.

    Dave

  • d0pam1ne

    too bad its a historically proven fact that economies greatly improve in times of WAR.

    never mind, people arent that bright… yes the left should be scared.

  • http://www.elitistpig.com Dave Nalle

    It’s a proven fact that the economy improved during WW2. That doesn’t mean it improved during every war. Vietnam certainly provided little economic boost, and the same is true of WW1 and the Spanish American War.

    Dave

  • fiddlercrab

    Isn’t amazing that some people haven’t ever heard of the expression that…. To pay someone minimum age, means that “I can’t pay you any less!?” Now I do not want to sound like a Socialist.But my Dad pulled the family out of the “finacial hole” by being with the WPA.Certainly Mom helped with being a welder and “Rosie the Riveter” in a shipyard.Do people like Greenspan and Wall St. predict the fate of the lower middle class,or do wars?.I suppose not if you get a good EDD-ja-kation as some people say.Really, shouldn’t education be “free”,of course to a point,..some brainy people will suck that dry.Do you think that the countrys that have free (advanced)type education get more out their students than we do?I bet our taxes,especially the windfall from oil,and (no) flat tax,sales,county,city yada ,yada,(there’s more)..Imagine,a guy retiring on $400 Mil.?…I wonder how many young people go into the military because they do not have a union card,Dad doesn’t own a oil company,or some “old money is being passed your way?” I guess the old adage really does apply..the middle class “fights all the wars and pays Most of the taxes.” Guess what guys I let the wife take full responsiblity of the money.We never fight over it!!Why for generations its been that way in our family…I think that’s how we survived.Also making soup,walking,sharing,and other modes of transportation.Do not worship the car and conserve.Oil WILL be $4 bucks before you know it.Its our way of finacial survival with Bush in the Drivers seat.Did he Not veto any Pork barrell jobs.especially a bridge$$$?? for so few people……..Fiscal responsibility???Yeah Right!
    Bankruptcy seems to be the only answer for some legitimately financially strapped familys today?

  • http://absent-mind.blogspot.com/ Jet in Columbus

    Okay Dave ignort this!!! When George W. Bush took office at the beginning of 2001, he inherited from the Clinton administration a budget surplus of US$86.4 billion. He had campaigned on a promise to use that money for an ambitious program of tax cuts, which he put into action immediately upon arrival in the Oval Office. But Bush’s conservative allies had expected those tax cuts to be followed by an equally sweeping review of federal spending. That austerity never came. On the contrary, he’s gone on a mammoth spending spree.

    Stephen Slivinski, director of budget studies at the Cato Institute, says discontent among conservatives has been building for several years. “People thought over the long term he’d try to do some good and Republicans could finally make good on their promises of getting spending under control, but here we are in the second term and that has not materialized,” he says. “The dam has just broken.”

    The Bush administration has a standard answer for this critique. In a time of war, they say, budget overruns are the inevitable cost of defending freedom and democracy at home and abroad. But that no longer holds water with Washington’s budget hawks. They point out that federal spending has risen by $683 billion a year under Bush, less than a third of which has gone to national defence and homeland security.

    As a result, the U.S. national debt has surged from $5.7 trillion in the last fiscal year before Bush took office, to over $8.3 trillion and counting. Brian Riedl, a budget analyst with the right-wing Heritage Foundation, says the Bush administration has played the benevolent uncle to every special interest that comes calling, using its spending power to win support in potentially vulnerable constituencies. The No Child Left Behind education bill, for example, was aimed at suburban families; the farm bill at Midwest rural voters; and the prescription drug benefit at the most active voting bloc of all, seniors. “No president since FDR has accelerated spending as fast as Bush has,” he groans. “I’m shocked about it, but the numbers show what the numbers show.”
    In reality, the $8.3-trillion figure doesn’t even begin to describe the true size of America’s fiscal crisis because it doesn’t include the so-called entitlement liabilities. In Medicare and Social Security, the U.S. government is committed to providing retirement benefits and medical care for senior citizens. But thanks to an aging population (the first of about 78 million American baby boomers turn 60 this year) and rising medical costs, those programs are desperately underfunded. At the end of 2004, government actuaries calculated that the two programs had unfunded liabilities of $43 trillion, up from $20 trillion in 2000. In other words, Washington would need an immediate cash infusion of 43 trillion $in order to meet all its future obligations under Medicare and Social Security. That was before the President pushed through the prescription drug benefit, which added an estimated $18 trillion to the Medicare shortfall. And when Republicans tried to add spending caps to the bill, to prevent uncontrolled cost inflation in the future, Bush threatened to veto them.

    The Economic Policy Institute recently projected that under the current tax regime, by 2014 all government revenue would be consumed by four budget items : Medicare, Social Security, national defence and interest on the debt. Walker’s department forecasts that, at the current rate of growth, the cost of servicing the national debt will consume half of all tax revenues within 25 years.

    Bush does have his fiscal defenders, and they generally point out that the national debt rose higher as a percentage of the economy under Reagan. But as Cato’s Slivinski points out, there are key differences between the two. For one thing, Reagan’s deficits got smaller and more manageable as his presidency went on. The Bush administration is projecting deficits north of $400 billion a year for the foreseeable future.

    More importantly, as Reagan increased defence spending, he cut other budget items. Bush has allowed spending to rise across the board. “The greatest costs of Bush’s legacy are Medicare and Social Security, and those haven’t even been seen yet,” Slivinski says. “We’re going to look back and wonder what the hell Republicans were thinking expanding all these programs at a time when we should’ve been looking at how to reform them, and pay for them.”

    America’s looming financial crunch would be less daunting if it seemed like the economy was poised to take flight. But among economists there is little hope for such a windfall. With 12.6 per cent growth in GDP and the creation of 2.3 million jobs since 2001, President Bush frequently crows about the world’s “pre-eminent” economy. Beneath the surface, critics see a situation far less healthy than it first appears.
    Two million new jobs sounds like a lot, but it’s the most anemic job creation performance by any president in the postwar era
    .

    The gains have also failed to keep pace with the growth of the workforce, and as a result the overall employment rate under Bush has declined from 64.4 per cent to 62.9 per cent . The manufacturing sector has been particularly hard hit, 2.9 million jobs since Bush took office losing, a decline of roughly 17 per cent — worse than the postwar hangover under Truman, worse than the early ’70s stagnation under Nixon, and far worse than the darkest days of Reagan’s Rust Belt plant closures. Little wonder that a Gallup poll earlier this year showed more than half of Americans consider the economy only “fair” or “poor,” and 52 per cent think it’s getting worse.
    This would be less of a concern, the experts say, if the Bush tax cuts of 2001 and 2003 had formed the basis of a broad economic resurgence at home. But while corporate profits hit a record $1.35 trillion last year, companies have been stubbornly reluctant to reinvest those earnings. With profits up 65 per cent since 2001, capital investments have declined by 4.5 per cent. And though that has fuelled a surge in the stock market, broader financial measures like wage growth have stalled.

  • http://www.futonreport.net/ Matthew T. Sussman

    Does it make you feel like a big man copying articles from someone else and passing them off as your own comments?

  • http://absent-mind.blogspot.com/ Jet in Columbus

    Where the hell did I even imply that that was mine? You asked for facts and figures, obviously I don’t have the contacts in Washington and a crack research department. Does Dave have a direct line to the White House, does he know George Bush personally, is he in direct contact with the chairman of the Republican Party????

    You’re damned right he doesn’t! Does Dave Nalle have a direct link to the government accounting department in Washington DC??? Where did he get his figures from? The newspaper? The internet? Is Dave an acknowledged expert in government finances?

    Did I attack him for boiling down someone else’s research, and then setting it down as his own?

    Matt, you made me feel like a piece of shit last night, whether you meant to or not, because I wrote an opinion piece on my perception of life. and critisized me for not doing my research?

    In my article did I once critisize Dave’s sources as not being his own?

    Did I state anywhere in that that those were my figures?

    I just posted a bunch of what you as much as called my a >b>hypocrite for last night, for not providing, and now that I have, you’re going to throw smart-ass comments at me about the obvious???

    Answer the facts and figures… or are you just making a pathetic attempt at trying to distract from the fact that you can’t, by posting an only slightly veiled personal attack.

    Respectfully
    Jet

  • http://somethingaboutchelsea.blogspot.com Chelsea Snyder

    Just a thought, Jet, but perhaps Suss is giving you guidance because he’s an editor, and perhaps, for a reason? Actually take heed to what he’s saying instead of taking it personally because I assure you, you’re merely a blib on his radar in the grand scheme of things.

    Respectfully,
    Chelsea Lou

  • http://absent-mind.blogspot.com/ Jet in Columbus

    Tell me something Chelsea, exactly what part of “Does it make you feel like a big man copying articles” am I not supposed to take personally?

    I realize that in retrospect I should have put quotation marks and foot notes on everything, but I’m new at this, and I don’t see a single one on this article and I know Dave doesn’t work in Washington and got his facts first hand.

    I felt wounded and I struck back.
    For that I’m sorry, maybe I don’t have the brains and intellect to play with you guys and I should just wander off…

    Sorry I annoyed so many people
    Jet

  • http://somethingaboutchelsea.blogspot.com Chelsea Snyder

    But the beauty of it is, Jet, that we’re adults and we can just let things go sometimes, instead of throwing tantrums. Hopefully we all left that behind in junior high, along with our Spice Girl posters.

    I heart bold.

  • http://www.futonreport.net/ Matthew T. Sussman

    Jet, I don’t think you understand the concept of attribution at all, and that’s dangerous. I’m not talking about facts, I’m talking about the text itself, specifically this comment. That comment you posted is an article from Macleans, and you stole it verbatim. Those aren’t your words, and without any attribution it’s considered stealing.

    Dave cited everything by linking to it. You can also say in the text where you got something. Nowhere in your comment did you allude to getting the text you posted from somewhere else. That’s a no-no, and we learned that in seventh grade.

    Also, I’m sorry I’m not giving you praise but that doesn’t give you carte blance to throw a hissy fit. And it’s not a personal attack — I’m not saying anything about you personally, I’m talking about your writing. That’s another distinction that needs to be learned.

    And if you’re gonna get pissy about it every time, then I’m not gonna bother helping at all.

  • http://www.elitistpig.com Dave Nalle

    Well Jet, I did go to the same college as the chairman of the GOP, and it’s a small school – but I graduated before he was out of high school. I’ll keep an eye out for him at the next reunion – my 30th and his 25th, so who knows.

    For what it’s worth, Jet, I did crunch many of the raw numbers into somewhat different forms myself. My Mac has this neat little desktop calculator thingy on it.

    And I didn’t think you wrote that. You didn’t imply that you did, I don’t think.

    Anyway, as to the substance of it, I don’t disagree. There’s no question that the government has serious funding problems facing it. Those don’t really impact the current private economy much yet, and that’s what my article is about. One way they do play a role is that Bush has indeed spent a lot of money, and that has contributed to economic growth at least a little.

    As for the main issue you raise, entitlement spending is the biggest problem we face. Now, right off, the OMB disagrees with your Economic Policy Institute in one key area. They are pretty sure the budget will be balanced by 2011, and based on their figures and current tax surpluses my math would advance that target to 2008, and that’s a very good, even remarkable accomplishment.

    But of course, Bush needs to cut spending even more than he has. A total freeze on discretionary spending is the first step, followed by a percentage cut for all agencies at a rate of at least 2% per year for 5 years is a minimum start. All of this in addition to reducing redundancy and getting rid of things like farm subsidies.

    The other key element – and this has always been part of Bush’s plan – is the privatization of Social Security. And the guys at Cato who you reference would agree with this. Social Security is the single largest problem for the future, and there’s no justification for it continuing to limp along as it does now. It’s unfair to everyone who hopes to benefit from it at some point in the future.

    BTW, I wrote what I think is a rather good article on cutting the budget during the last budget debate. I was able to cut enough to balance the budget without causing a lot of pain. Farm subsidies and the drug war alone cost enough to save $170 billion a year. It COULD be done. We just need leaders with balls.

    Dave

  • http://www.elitistpig.com Dave Nalle

    Jet, attributing it with a link would definitely have been good.

    Matt, you were still belittling him with your comment as you made it. You could have asked for an attribution without being rude about it.

    Dave

  • RogerMDillon

    Just a thought, perhaps Suss needs guidance as an editor because no one is going to listen to a critique that begins with “Does it make you feel like a big man”.

    Should Jet have attributed his source? Absolutely and you should definitely call his attention to it. But how do not expect someone to get defensive when your criticisms are filled with condescension. Learn a little tact.

  • http://absent-mind.blogspot.com/ Jet in Columbus

    Gentlemen: Thank you-all of you. A man never learns anything if he’s right all of the time.

    I’ve learned through life experience that if you get lost trying to find somewhere, you never forget where it is afterwards.

    I’m just trying to find my way…

  • zingzing

    aww, it just makes him feel like a big man asking someone if they feel like a big man. leave big man alone. big man make dinner for me. where’s my dinner, big man?

  • http://somethingaboutchelsea.blogspot.com Chelsea Snyder

    “Gentlemen: Thank you-all of you. A man never learns anything if he’s right all of the time.”

    According to my vagina, I’m a female. Despite the fact I can easily beat Sussman up.

  • http://www.elitistpig.com Dave Nalle

    Zing, ‘big man’ more commonly known as ‘big brother’ took your dinner and gave it to an illegal alien. Your chimichangas are waiting for you in Guadalajara.

    Dave

  • fiddlercrab

    My ,there is an awful lot speculation on what’s wrong with the economy out there.I know there’s an awful lot of retired people under that $50,000 figure someone mentioned.And we who where lucky enough to
    make it thru the wars, the hippies,yippies,yuppys and all that says this is who I am.Seems like greed, stupidity,and a lack of saving a buck will be the future generations downfall if they do not plan, and save for retirement.I guess I should be thankful that I was able to retire.NOT saying that I may have to Try to return to work,for it is happening that many retired people Have To because of the economy.And I can tell the way you kids talk that you are part of the generation that has a lot of us taking care of Grandkids.Theres another factor you might consider when you buy those “Designer jeans’, torn ,and with your asses hanging out.And being a 2 and 3 car family,(one being a SUV gas guzzling monster.You are not going to have it easy for sure,so I’d save if I were you.I do give the younger generation a lot of credit,the inventions are mind boggling,(I remember Hi-Fi),and you made us very aware of the dirty politics,dirty air,and other social and economic injustices that have occured in the past.Most of you do not even remember Harry S Truman..but one of the things that he wanted to do was extend OPA (office of price administration)By the way he was the last honest,sincere President we had ,who also didn’t have a Bimbo running up and down the White House back stairs.Congress would have toed the mark with this guy.They’d be in “Session” a hell-uv-a- lot more than they do now.And it is so difficult to listen to people criticize a leader like him.He wouldn’t let anyone charge $600 for a toilet..period. I went to CHK (college of hard knocks)and I do hope you will follow an old geezers advise…
    1.Have mass identification.”They know all about you if you pay taxes (flat)legally vote,register a car,been in a hospital,been fingerprinted,dentists,DNA etc etc.
    all on one card.I was born here and I will show that card to any Authority.You bet it would weed out all those illegal immigrants and Non-green cards.And by the way folks they are coming as far away as Paraguay,thru Mexico.Fox ,their president could care less.Do you think it’s difficult for them to go back over the border South?
    2.Be serious about Mass transportion…Check out Europe and Japan’s movement of the masses.It would help the environment also.This Global warming sounds like serious stuff.And before we get to serious about Nuclear Fuel we damn sure better take care of Hanford WA.and a few other hot spots.
    3.The economy seems to me like a big game,this%this and %that % this.Can’t we print more money?What difference does it make when a guy can walk off the job with $400 mil and some guy who has worked for US Steel,(ad infinitum) for 30-35 years and he gets screwd out of his job and pension.Do not bury your head in the sand,there’s a lot of that out there today.And let us not forget that old adage of Minimum wage “we can’t pay him any less!! American kids are lazy Bull.If an American works,PAY him a decent wage.He has to pay the same for a loaf of bread for his family, as the guy who walked with 400mil.
    3.Try not to let your kids be latch key kids.Having Mom OR Dad home is a good thing.And the way things are going many of you will be working in your own homes anyways.We are becoming more and more a high tech and Service industry.Do I see Socialism creeping in.
    See I just made it so easy for you.DON’T FIGHT OVER MONEY.You are talented and intelligent enough to ignore,or out-smart the fools who can make your life miserable with their “Econmic Bull—-.
    4.I know one other thing also the Islamic or Arab people are not allowed to charge interest..Do you understand what that’s all about?So why when American banks charge up to19%?,I would say that even the Bible thumpers on TV say, “God only ask for 10%” Hmmm….Very strange………..

  • zingzing

    mexico! cheap livin! mexicana hermana!

  • http://www.elitistpig.com Dave Nalle

    Fiddler, American banks can get away with charging way more than 19%. Try at least 28%.

    As for the younger generation, statistics suggest that they are saving and investing more actively than any other generation before them. Deep down they know not to trust in the government for their future and they’re taking advantage of the opportunities for tax free investment that let them take care of themselves.

    Dave

  • RogerMDillon

    “According to my vagina, I’m a female.”

    Maybe that’s because Jet wasn’t thanking you since your butting in didn’t help the situation.

  • http://www.elitistpig.com Dave Nalle

    What troubles me is that her Vagina talks and has opinions.

    dave

  • http://musical-guru.blogspot.com Michael J. West

    Doesn’t Erin McMaster also claim to have a Talking Vagina?

  • Blue Meanie

    Usurers running the banks, sidestepping the rules and printing their own money by only holding 10% in reserve. All the while doubling your rates when they have you in a bind, and after so many years of owning the Congress, they get the bankruptcy laws they want passed, peaople can’t get clear, but corporations can and do.

    All the while, the Corps go belly up when it suits them, and shove their obligations and retirement debt onto, you guessed it, the verage guys that pay taxes.

    Wake up people, your future is being sold out from under you to the Chinese national bank, while your past is hoarded in a P.O. box in the Grand Caymans tax free

  • zingzing

    vaginas do not talk. they make funny noises (hi-larious noises), sometimes they spit… but i have never heard an intelligent, intelligible phrase uttered by a vag.

  • http:jpsgoddamnblog.blogspot.com JP

    I can’t disagree with this misguided article more. I’m so confused, real wages for average citizens going down, but corporate profits going up, does not mean an “economic boom” for all. The tax cuts do NOT favor the middle class and working poor, and should be repealed.

    And the “Fair Tax” is a joke–trust me, I live in the home of Boortz’ radio program. He’s a nutcase.

  • http://www.elitistpig.com Dave Nalle

    I can’t disagree with this misguided article more.

    Especially since you apparently didn’t read it.

    I’m so confused,

    There you’ve hit the nail on the head.

    real wages for average citizens going down,

    No, read the article. Real wages are going up, and substantially – even historically for average people.

    but corporate profits going up, does not mean an “economic boom” for all. The tax cuts do NOT favor the middle class and working poor, and should be repealed.

    You’re ill-informed. You’ve been listening to propaganda instead of facts. The 2003 tax cuts were 2% for the top income earners and 3% for the middle groups, while huge numbers in the lowest two quintiles were removed from the tax rolls alltogether. That’s the truth. Might want to use that for reference instead of whatever propaganda you’ve been reading.

    And the “Fair Tax” is a joke

    I’m not a fair tax fan either, but it’s an interesting idea and worth thinking about.

    Dave

  • troll

    *The 2003 tax cuts were 2% for the top income earners and 3% for the middle groups*

    or one could say that the gal with an income of 1 million had her tax liability reduced by 20 grand and the guy with a hundred grand income had his liability reduced by 3 grand

    …it takes money to make money…I guess

    empowering the investor class with this injection worked – for that class particularly and for the economic indicators…now comes the delayed ‘trickle down effect’ and the benefits of a ‘wartime’ economy…..right – ?

    all that borrowed money has to end up in somebody’s pocket

    troll

  • http://indemnification.blogspot.com -E

    why are people talking about my vagina? and what does that have to do with economic growth?

  • http://www.futonreport.net/ Matthew T. Sussman

    Erin, you need to do next week’s podcast.

  • http://www.elitistpig.com Dave Nalle

    The vagina can be a powerful engine for economic productivity. Go see the thread on legalizing prostitution if you don’t believe me.

    …it takes money to make money…I guess

    Truer words were never said, Troll.

    empowering the investor class with this injection worked – for that class particularly and for the economic indicators…now comes the delayed ‘trickle down effect’ and the benefits of a ‘wartime’ economy…..right – ?

    I have no reason to doubt that this will be the case. We’re certainly seeing a damned strong economy at every level, including all the factors noted in the article – which extend to the working class as well as everyone else.

    Dave

  • http://www.maskedmoviesnobs.com El Bicho

    “The vagina can be a powerful engine for economic productivity.”

    That’s true. Look at this quote from a famous businessman who made a big splash in the ’80s with imports.

    Tony Montana: In this country, you gotta make the money first. Then when you get the money, you get the power. Then when you get the power, then you get the women.

  • http://www.elitistpig.com Dave Nalle

    Tony was a wise man, but he might have that backwards. You get the women, they earn you the money and the money gives you the power. This is all assuming, of course, that your pimp hand is strong.

    Dave