October 2014 Brief: Volume 21, Number 30
|Click Here for a pdf version.|
The American Economic Crisis Remains
by John Hendrickson
The United States may be “officially” out of the Great Recession, but the economy still faces serious structural problems. Most of these structural problems are a result of poor public policies that are placing an albatross over the economy. The problems of high unemployment, high national debt, massive increase in regulations, and other policies such as the Patient Protection and Affordable Care Act are the direct cause of today’s poor economic recovery.
In August the unemployment registered at 6.1 percent, but the actual rate is much higher because of the number of Americans who are either underemployed or have altogether quit looking for work. Economist Peter Morici wrote that “the official jobless rate is down to 6.1 percent but real unemployment is closer to 18 percent…” 92.3 million Americans are currently looking for work, and this “recovery” is the worst since World War II. James Sherk, a Senior Policy Analyst at The Heritage Foundation, argues that “despite some real improvements over the past several years, the economy remains painfully weak for millions of Americans.” In addition, Sherk states:
Americans are not only struggling to find fulltime jobs, but also with wages in decline there is a substantial increase of individuals and families who are becoming dependent on government aid/welfare programs. Investor’s Business Daily noted that information from the Federal Reserve demonstrates “that only the top 10 percent of American earners have seen their incomes rise under [President] Obama.”
“Despite 0 percent interest rates, $7 trillion in added debt, more than $1.5 trillion in stimulus, and the Fed creating more than $4.5 trillion in new money out of thin air, our economy just stumbles along,” noted an Investor’s Business Daily editorial. Terence Jeffrey, Editor in Chief of CNSnews, recently wrote that the national debt is $17.6 trillion and since January 2009 when President Barack Obama assumed the presidency the debt has increased by $7 trillion.
The debt situation represents a serious problem for not just the future of the national economy, but also represents a serious national security risk for the nation. Terence Jeffery outlined the threat of the debt, which is being fueled by out-of-control spending and the welfare state:
The Patient Protection and Affordable Care Act is also contributing to the current economic crisis. Avik Roy, writing in Forbes, described three facts on how the Affordable Care Act is harming the national economy:
“Over the next decade, Obamacare increases taxes by more than $1.2 trillion: one of the largest tax increases in U.S. history, and the largest in nominal dollars,” argues Roy. The mandate under the Affordable Care Act is also causing many businesses to pull back on hiring fulltime workers, and as Roy wrote, “16.9 percent of service firms and 21.6 percent of manufacturers said they would be reducing their workforce due to Obamacare.”
The economic crisis will continue unless Americans reject the current policies that are emerging and come to the realization that the welfare state must be trimmed back and reformed. Our most urgent need is a restoration of constitutional government as represented by lowering spending, paying down the debt, eliminating regulation, and lowering tax rates. These policies along with promoting a strong dollar and an American-first trade policy will resurrect a strong national economy. Our history has proven this during periods of economic prosperity and President Warren G. Harding, Calvin Coolidge, and Ronald Reagan formula for a strong economy.
John Hendrickson is a Research Analyst with Public Interest Institute, Mount Pleasant, Iowa. Contact him at Public.Interest.Institute@LimitedGovernment.org.
Permission to reprint or copy in whole or part is granted, provided a version of this credit line is used:"Reprinted by permission from INSTITUTE BRIEF, a publication of Public Interest Institute." The views expressed in this publication are those of the author and not necessarily those of Public Interest Institute. They are brought to you in the interest of a better-informed citizenry.
All of our publications are available for sponsorship. Sponsoring a publication is an excellent way for you to show your support of our efforts to defend liberty and define the proper role of government. For more information, please contact Public Interest Institute at 319-385-3462 or e-mail us at Public.Interest.Institute@LimitedGovernment.org