Wednesday, October 31, 2012

Has Obama Created More Jobs Than Bush Yet?


:: Card Stacking ::

MythBuster III: Rational or Ridiculous?

- By: Larry Walker, Jr. -

Card stacking, or selective omission, is one of the seven propaganda techniques identified by the Institute for Propaganda Analysis. It involves only presenting information that is positive to an idea or proposal and omitting information contrary to it. Card stacking is used in almost all forms of propaganda, and is extremely effective in convincing the public. Although the majority of information presented by the card stacking approach is true, it is dangerous because it omits important information. The best way to deal with card stacking is to get more information.

Back in October of 2010, the left-wing media and White House tried to spin the myth that, "Obama created more jobs in 2010 than Bush did in eight years.” However, this delusion was busted in the first MythBuster series (here), simply by proving that at the time, not one single solitary job had been created during the Obama Administration. In fact at the time Mr. Obama was proudly presiding over a 2,991,000 loss in private sector jobs. So where are we today, 2 years later and 44 months into Mr. Obama’s agenda? Has Obama created more jobs than Bush?

Current Employment Statistics: No Shot

Let’s turn to the Bureau of Labor Statistics, focusing first on the Current Employment Statistics (CES). The CES is a monthly survey of about 141,000 businesses and government agencies, representing approximately 486,000 individual worksites, in order to provide detailed industry data on employment, hours, and earnings of workers on nonfarm payrolls, also known as Table B.

When we add up the total number of nonfarm jobs created during Mr. Obama's 44-month tenure (February 1, 2009 to September 30, 2012), we find that a total of 61,000 jobs have been lost (133,561,000 – 133,500,000). Thus, Mr. Obama’s job loss average is 1,386 jobs per month. Oops!

And when we add up the total number of nonfarm jobs created during Mr. Bush’s 96-month tenure (February 1, 2001 to January 31, 2009), we find that a total of 1,095,000 jobs were created (133,561,000 – 132,466,000). So Mr. Bush’s job creation average was 11,406 jobs per month.

Therefore, in terms of the CES, Mr. Bush’s job creation record was 922.9% greater than Mr. Obama’s [(11,406 + 1,386) / 1,386]. Oops!

Current Population Survey: Fair Shot

Just to be fair, we’ll return to the Bureau of Labor Statistics, this time focusing on the Current Population Survey (CPS). The CPS is a monthly survey of households conducted by the Bureau of Census for the Bureau of Labor Statistics, also known as Table A. The CPS is a broader survey, which includes those who are self-employed or who work for smaller companies. It’s also the data set used to calculate the official unemployment rate.

When we add up the total increase in the employment level during Mr. Obama's 44-month tenure (February 1, 2009 to September 30, 2012), we find that a total of 787,000 jobs have been created (142,974,000 – 142,187,000). That’s an average of 17,886 jobs per month, which is at least positive, although far short of the four or five million he esteems.

Yet, when we add up the total increase in the employment level during Mr. Bush’s 96-month tenure (February 1, 2001 to January 31, 2009), we find that a total of 4,409,000 jobs were created (142,187,000 – 137,778,000). That’s an average of 45,927 jobs per month.

Thus, in terms of the CPS, Mr. Bush’s job creation record was 256.7% greater than Mr. Obama’s (45,927 / 17,886). Oops!

Officially Busted!

The claim, "Obama created more jobs than Bush did in eight years,” is officially busted. Although I could cherry-pick and find a period where nonfarm jobs growth was up by 7 or 8 million during Mr. Bush’s term, for example from 2003 through 2007, and use that to pummel Mr. Obama’s record into the ground, I choose to remain among the rational. I don't want to hear another word about Obama having created four of five million jobs over some arbitrary period.

Most of us would agree that Mr. Bush’s job creation record was pretty dismal, but compared to Mr. Obama’s record, we were far better off during the Bush years. The truth is that the number of nonfarm jobs (CES) grew 922.9% greater during Bush's 96-month term, in spite of the massive losses incurred during two recessions, than during Mr. Obama’s 44-month term. And likewise, the employment level (CPS) grew 256.7% greater during Bush’s term, than during Mr. Obama’s.

We are currently around 4 or 5 million jobs short of where we were before the Great Recession. Frankly, Mr. Obama’s job creation record is ridiculous, pathetic, and unacceptable. He should be ashamed, as should anyone attempting to spin such trifle. It’s time to throw the bums out.

References:

Institute for Propaganda Analysis (IPA)

Bureau of Labor Statistics: CES Data

Bureau of Labor Statistics: CPS Data

Related:

MythBuster: Has Obama Created More Jobs Than Bush?

MythBuster II: Has Obama Created More Jobs Than Bush?

Sunday, October 28, 2012

High Gasoline Prices and the 2012 Recession, Part II


Artificial Demand ::

“Real demand is not artificial. We should resist as much as possible the notion of providing things that are not actually demanded by anyone.” ~ American Consensus

- By: Larry Walker, Jr. -

The price of any product or service is normally determined by two variables, supply and demand. In economics, prices rise as demand increases, as supply decreases, or a combination of the two. It’s only when supply keeps pace with demand that the price of gasoline stabilizes or declines.

Since we know that the world’s population is increasing, not decreasing, more gasoline production is constantly required, not less. It doesn’t take a rocket scientist to figure that out. Thus, the only way to reduce gasoline prices, in the face of rising global demand, is through greater production. Yet, U.S. oil production has been on the rise since 2009, while demand has declined. So, why is gasoline stuck above $3.25 a gallon?

Was there suddenly a great demand for solar panels, biofuels, windmills and electric cars in 2009? The answer is no. Do cars and trucks run on solar panels and wind turbines? The answer is no. Yet, the 2009 stimulus set aside $80 billion in deficit financing to subsidize politically preferred green energy projects, which had little or no demand at the time. In fact, there is little demand for such products today. What the world demanded in 2009 is the same thing it demands today, more gasoline. So why is the federal government involved in providing things that are not actually demanded by anyone?

According to the Energy Information Administration, global oil consumption declined slightly in 2008, 2009 and 2010, while global supply has kept pace with demand (see chart above). In 2010, global supply actually exceeded demand, but as of 2011, the latest statistics available, world demand set a new record of 87,421,000 barrels per day, up from 83,412,000 in 2010. Yet global supply has kept pace with demand. So why have U.S. gasoline prices climbed by more than 90% since January 2009? The answer doesn't involve oil supply and demand, it has to do with the decline of the U.S. dollar.

The purchasing power of the consumer dollar has declined by 24.3% since 2001 (see chart below). The dollar actually strengthened for a brief 5-month period, from September 2008 to January 2009, but then resumed its decline, having fallen by 8.9% since January 2011. What happened to the price of gasoline during the five-month’s that the dollar strengthened? It declined dramatically, from $3.72 a gallon to $1.64 (see Part I). And what happened to the price of gasoline after January 2011? It shot past the $3.25 per gallon breaking point, where it remains today.

What caused the dollar to decline? The U.S. monetary base, the total amount of a currency that is either circulated in the hands of the public or in the commercial bank deposits held in the central bank's reserves, has increased by 324.2% since 2001. The money base grew from $616.7 billion in 2001, to $2.6 trillion as of September 2012. You can see in the chart below, that $256 billion of this increase occurred between January 2001 and September 2008. But from September 2008 to January 2009 the monetary base increased by $858 billion. However, this initial increase actually strengthened the dollar, and was, evidentially, the precise temporary stimulus needed at the time. The only problem with this brilliant strategy was that it wasn’t temporary.

Instead of winding down at the end of January 2009, what had been a well timed temporary stimulus was unfortunately doubled. Since then, the monetary base has been jacked up by another $886 billion. Instead of a temporary stimulus, what we wound up with was a permanent doubling-down of the original amount. Is this what the economy needed? What was the result? This time instead of strengthening, the purchasing power of the dollar plummeted.

Thus, by the time Barack Obama was inaugurated, the economy had already received the temporary stimulus it required. How do we know? The proof is the decline in the price of gasoline, to near its historic inflation adjusted norm of $1.73 a gallon (see Part I). But ever since then, the price of gas has risen from $1.88 to $3.65. That’s the proof. What we have witnessed during the Obama Administration has been reckless and unnecessary deficit-financed spending, which not only added six-months to the Great Recession, but has lead to a prolonged period of stagnation.

The Federal Reserve should have started reducing the monetary base in February 2009, but was unable to, due to the Barack Obama’s unprecedented $832 billion stimulus plan. In addition, as a result of Mr. Obama’s $1 trillion-plus annual budget deficits for the past four consecutive years, instead of being able to control the money base, the Fed has been forced into the unlimited printing of dollars, vis-à-vis QE3.

Based on the current trajectory, what we can expect with another four years of Barack Obama is a continued decline in the purchasing power of the dollar, and higher gasoline prices, in spite of improved U.S. supply and falling demand. The problem with high gasoline prices is they lead to recessions, while lower prices foster economic expansion. The target price for gasoline is the 1992 inflation adjusted price, $1.86 a gallon. The current price is $3.65.

In the midst of the Great Recession, the average price of gasoline only exceeded the breaking point ($3.25 a gallon) for a total of 31 weeks. In contrast, the current price has remained above the breaking point for a total of 86 consecutive weeks, from February 28, 2011 to present. What does that tell you? It leads me to believe that the U.S. is currently in recession. The cause: Inflation due to excessive money printing, necessitated as the result of an $832 billion stimulus, and unprecedented trillion dollar budget deficits due to Barack Obama’s inability to govern. Is there a witness?

One month ago, the Economic Cycle Research Institute (ECRI), the same organization which successfully predicted the last recession, and which over the last 15 years has gotten all of its recession calls right while issuing no false alarms, declared that the U.S. is in recession. In an article entitled, The 2012 Recession: Are We There Yet?, ECRI stated, “Back in December, we went on to specify the time frame for it [the recession] to begin: if not by the first quarter of the year, then by mid-2012. But we also said at the time that the recession would not be evident before the end of the year. In other words, nine months ago we knew that, sitting here today, most people probably would not realize that we are in recession – and we do believe we are in recession.”

The policies of Barack Obama didn’t deliver us from the Great Recession, they prolonged it. The $832 billion stimulus plan merely created an artificial demand for U.S. dollars, and is directly responsible for re-inflating the same imbalances that existed prior to the recession. How can we tell whether or not we’re better off than we were four years ago? Well, here’s what’s different today. We are more than $16 trillion in debt, 25 million Americans are either unemployed or underemployed, instead of reducing the money base the Federal Reserve is printing more money to purchase mortgage-backed debt on an unlimited basis, our tax and regulatory structure is mired in uncertainty, we are suffering from a foreign policy meltdown, and the price of gasoline has remained over $3.25 for a record 86 consecutive weeks.

The Obama Administration has done everything in its power to hide the truth from us, but we’re just not going to take it anymore. Americans can take a lot, but one thing we won’t tolerate is government officials who try to deceive us. The federal government can easily manipulate unemployment statistics, since the numbers are basically made-up anyway, but it cannot so easily engineer the price of gasoline. To do so would entail releasing oil from the Strategic Petroleum Reserve, which is in place to mitigate national emergencies, not sway elections.

Four years of Barack Obama's policies solved nothing. We are currently teetering somewhere between back where we started from, to worse off than we have ever been. And with a looming fiscal cliff, another four years of Obama will only make things worse. America can’t take another four years of trifling rhetoric, high gasoline prices, or another government-prolonged recession. It’s time to wash our hands of the Obama Administration, and time to turn toward mature, experienced, and responsible leadership. You know what time it is!

“A lie hides the truth. A story tries to find it.” ~ Paula Fox

Reference:

Weekly U.S. All Grades Conventional Retail Gasoline Prices | U.S. Energy Information Administration

The 2012 Recession: Are We There Yet? | Economic Cycle Research Institute

The Malaise of 2012 | Part IV

Related:

High Gasoline Prices and the 2012 Recession, Part I

Manipulation 101: The Real Unemployment Rate

High Gasoline Prices and the 2012 Recession, Part I


Truth is not easily hidden.

- By: Larry Walker, Jr. -

Conventional retail gasoline averaged $3.65 a gallon in the most recent week ended October 22, 2012, yet when Barack Obama was sworn into office the price averaged $1.88. When questioned about the 94.2% increase which occurred on his watch, Mr. Obama remarked that the reason gasoline prices were so low when he entered office was because the U.S.was “in the middle of an economic depression.” However, the question wasn’t why prices were so low when he entered office, but rather why they ballooned by 94.2% on his watch. We’re still awaiting his answer.

In the second presidential debate, Barack Obama stated that, “oil imports are at the lowest levels in 16 years.” But as I pointed out in Debate 2 | Obama’s Oil & Gas Rhetoric, the gasoline I need to fill my tank only cost an average of $1.23 a gallon in 1996, the equivalent of $1.81 today. And later in the same debate, Obama proclaimed that, “oil imports are down to the lowest levels in 20 years.” Well, which is it Mr. President? I pointed out in the same post, that the 1992 price of regular unleaded averaged $1.13 per gallon, the equivalent of $1.86 today. Is the price of gasoline $1.81 to $1.86 today? No. So then what was Obama’s point?

Are we supposed to believe that it took an economic depression to bring gasoline prices down to $1.88 in the week ended January 19, 2009, when that would actually have been higher than the average inflation adjusted price of $1.73 at that time? I don’t know what that tells you, but it tells me that gas prices were in a bubble before the Great Recession, a bubble which finally burst during month 8 of the 19-month downturn. High gasoline prices were actually one of the factors leading to the Great Recession, the subsequent decline merely brought prices in-line with the historic norm.

If this is true, then hasn’t the price of gasoline been in the midst of another bubble since 2011 (see chart below)? And if a bubble currently exists, does that mean the U.S. is either in or near recession? To know the answers, we must venture back in time and analyze what actually took place prior to the Great Recession. The following analysis focuses on all grades of conventional retail gasoline.

Gasoline Prices and the 2001 Recession

Gasoline prices generally rise during the first six months of the year, and fall during the remainder. The 2001 recession began in March and ended in November, as indicated by the first shaded area in the chart above. Going back to January 1, 2001, according to the U.S. Energy Information Administration, we find that conventional grades were selling for an average of $1.42 per gallon. Once the recession commenced prices peaked at $1.70 in May, before the normal seasonal decline. But due to the recession, followed by a post-911 reduction in demand, prices continued to fall reaching a low of $1.08 by the week ending December 18, 2001. This represented a decline from the peak of roughly 36%, over 32 weeks.

Based on the 1992 price per gallon of $1.13, the 2001 equivalent price should have been $1.43 (as represented by the solid blue line). Due to the recession, gasoline prices temporarily declined below the inflation adjusted level, but would eventually regain equilibrium, reaching $1.46 towards the end of 2002. All in all, gasoline prices remained at or near equilibrium between 2001 and 2003. It was in 2004 when prices began to spin hopelessly out of control. The reason for the subsequent price hike was initially blamed on a significant number of refineries being offline, and later by rising crude oil prices.

Prior to the Great Recession, a record high of $3.25 per gallon was set in the week ended May 21, 2007. The chart above contains a green dashed-horizontal line at the breaking point, the pre-Great Recession record of $3.25 a gallon. The solid blue line represents the annual inflation adjusted price of 1992 gasoline. Although gas prices may currently be on the decline, until they dip below $3.25 a recession threat remains. At the same time, any price above $1.86 is not optimal. So where are we today?

Gasoline Prices and the Great Recession

The Great Recession commenced in December of 2007. At the time, gasoline was averaging $3.03 per gallon, but within the first eight months the price would set a new record of $4.10 per gallon in the weeks ending July 7 and July 14, 2008 (see chart above). But then something phenomenal happened. From the peak, prices declined to $3.17, or to below the $3.25 breaking point within just 14 weeks. And prices continued to fall all the way to a low of $1.64 by the week ending December 29, 2008, within another 11 weeks. So from peak to trough, gasoline prices declined by 60% in just 25 weeks, a notable difference from the 36% decline over 32 weeks at the end of the 2001 recession.

After the 2001 recession prices remained relatively stable for two years, but that wasn’t the case with the Great Recession. This time, when prices hit bottom the recession wasn’t over. It probably should have been over at that point, and perhaps it would, had it not been for artificial demand, induced by an unprecedented amount of deficit-financed government intervention. By the time the Great Recession ended, the price of conventional gasoline had risen from a bottom of $1.64 to $2.64. So from an early Great Recession surge to $4.10, prices finally flushed out at $2.64.

To summarize, during the Great Recession, gasoline prices rose by 35% before declining by 36%. By comparison, during the 2001 recession, prices rose by 20% before declining by 36%. That seems fairly harmless on its own, but what’s missing is the fact that gasoline prices doubled, from $1.50 to $3.08, during the previous recovery, between January 2004 and December 2007. That’s the key. There’s the bubble. So what was the cause?

According to information from the U.S. Energy Information Administration, there was a notable rise in U.S. petroleum demand, and a corresponding decline in U.S. supply from 2004 to 2007, as indicated by the shaded area in the chart below. In fact, the phenomenon of rising demand and declining supply actually commenced in 1986.

A quick study of the chart leads to two questions. Is the U.S. currently producing more oil than it did in 1985? The answer is no. Is the U.S. consuming more petroleum than it did in 1985? The answer is yes. Yet in 2009 there was a noticeable decline in demand and a corresponding uptick in supply, the combination of which contributed to lower prices at the pump. And, it appears that U.S. oil supply is continuing to trend upward, while demand has leveled off. So since demand is stable and supply is increasing, gasoline prices should be dropping like a rock, but instead we have witnessed a 94.2% price increase since January 20, 2009.

So was Obama right to blame the 94.2% price hike, on what he refers to as the extraordinarily low prices he inherited as a result of an economic depression? No, because by inauguration day the price of gasoline had settled right about where it should have, on an inflation adjusted basis. Recall that in 1992 the price of regular unleaded gasoline was $1.13 per gallon, which would have been equivalent to $1.73 in 2009; and the national average was $1.64 on December 29, 2008, and $1.88 on January 19, 2009. Thus, at that time, the price of gasoline was barely above its inflation adjusted value (see the first chart).

Going back to the original question, the reason prices have risen on Obama’s watch has nothing to do with supply and demand. The root cause is unprecedented government intervention vis-à-vis his $832 billion stimulus plan (see Part II). The stimulus program merely re-inflated a price bubble that existed prior to the recession, the first caused by lack of supply, and the second by devaluation of the dollar. It was this artificial deficit-financed demand that caused gasoline prices to rise from the $1.88 he inherited to $2.64 by the end of the recession, so that by June of 2009, gasoline was only 19% below its pre-recession record of $3.25.

Gasoline would remain below $3.00 from June 2009, until the week ending December 27, 2010. It was during this period that the economy showed its most promising signs of recovery. But ever since then, the price of gasoline has never fallen below $3.00. Instead, in the week ended February 28, 2011 the price once again accelerated past the $3.25 breaking point, where it has remained for the last 86 consecutive weeks.

With regard to 2010 being the end of the Obama recovery, the proof is that Real Gross Domestic Product (GDP) contracted by -3.1% in the year 2009, as gasoline prices surged from $1.64 to $2.62. Then in 2010, GDP grew by 2.4% as prices stabilized and remained below $3.00. But economic growth again slowed to a rate of 1.8% in 2011, as prices climbed above $3.25. GDP further slowed to a growth rate of just 1.3% through the second-quarter 2012, as gas prices remained above $3.25.

Note: The third-quarter 2012 advance estimate that GDP grew by 2.0% is just that, an estimate. In fact, according to the Bureau of Economic Analysis, “the third-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The "second" estimate for the third quarter, based on more complete data, will be released on November 29, 2012.”

Continued: High Gasoline Prices and the 2012 Recession, Part II

Reference:

Weekly U.S. All Grades Conventional Retail Gasoline Prices | U.S. Energy Information Administration

The 2012 Recession: Are We There Yet? | Economic Cycle Research Institute

The Malaise of 2012 | Part IV

Related:

Manipulation 101: The Real Unemployment Rate

Photo Via: Midwest Energy News

Saturday, October 20, 2012

Real Effective Tax Rates | Romney's versus Obama's


Content of Character ::

According to a report released by the Tax Foundation, an effective federal tax rate of 14.0% is higher than what 97 percent of Americans pay.

- By: Larry Walker, Jr. -

And according to The Tax Policy Center, the average effective federal tax rate for all Americans, as a percentage of cash income, was only 9.3% in 2011. Those in the Top 20 Percent (with incomes over $103,465) paid an average of 14.9%, while those in the Bottom 20 Percent (with incomes below $16,812) received back refundable tax credits averaging 5.8% of their incomes.

Within the Top Quintile, the Top 1 Percent paid an average rate of 20.3%, while the Top 0.1 Percent paid an average of 19.8%. It’s important to note that these are averages, which means that within each quintile some pay more than the average and others less. But overall, since the average effective federal tax rate for all of America is 9.3%, this represents a kind of minimum benchmark. What’s your effective federal tax rate?

Under the traditional model, in 2011, Mitt and Ann Romney paid an effective federal tax rate of around 14.0% (see definitions at the end), while Barack and Michelle Obama paid 17.8% (see table below). So does that mean the Obamas are more patriotic? Before you answer that, consider that the Romneys paid a total of $1,912,529 in federal income taxes, versus the Obamas $150,253. So does this give the Romneys the upper hand?

Digging a little deeper, it turns out that the Romneys paid an effective state and local tax rate of 11.3%, compared to the Obamas 7.0%. The Romneys also paid $1,541,905 in state and local taxes, compared to the Obamas $59,804. Shouldn’t state and local taxes be counted as well, since they are, after all, taxes? Yes, of course.

So when all taxes are on the table, the Romneys overall effective tax rate was 25.2%, compared to the Obamas 24.8%. And, the Romneys paid a total of $3,454,434 in federal, state and local taxes, versus the Obamas $209,057. So in light of these facts, is one of the two presidential candidates better suited for the Oval Office than the other? Is one a tax deadbeat and the other a saint? If a presidential candidate’s effective tax rate matters, then this election should be a toss up. But if it doesn’t, then Barack Obama’s entire – fair share monologue – is nothing but rubbish. The question is – what really matters?

Real Effective Tax Rates

Perhaps a more suitable measure of patriotism may be found in one’s real effective tax rate. One way of lowering U.S. tax liabilities is through charitable giving. When gifts are given to charity, the taxpayer no longer controls the assets, and so is granted a deduction against his (or her) taxable income of as much as 50% of adjusted gross income. Depending upon one’s marginal tax bracket, the tax savings may be as high as 35% of the amount given.

What happens to the money once it has been gifted? It gets spent by recipient organizations on salaries and wages, goods and services, real property, or is otherwise invested toward its charitable endeavors. Thus, charity is wealth redistribution, or if you will, a type of voluntary taxation. I would add that charitable giving is a much more efficient means of spreading the wealth than the U.S. government’s wasteful method, which after a certain limit may be summed up as little more than legalized robbery.

In 2011, the Romneys gave away $4,000,000, or about 29.0% of their income, although they only chose to claim a tax deduction of $2,250,772. The Obamas donated $172,130 or about 20.0% of their income. When we add this voluntary taxation to the total amount of taxes paid, we find that the Romneys paid a real effective tax rate of 54.4%, compared to the Obamas 45.1% (see table below).

Just to add some perspective I included data from the Roosevelts and the Carters tax returns (above). It’s interesting to note that in 1937, Franklin and Eleanor Roosevelt donated $3,024, or only about 3.2% of their income, while in 1978, Jimmy and Roselynn Carter gave away $18,637, or about 7.0%. When we add the amount of the couples voluntary taxation through charitable gifts, to the total amount of taxes paid, we find that the Roosevelts paid a real effective tax rate of 33.3%, compared to the Carters 45.6%. So was FDR a slacker? Was Jimmy Carter slightly more patriotic than Obama? And isn’t Mitt Romney a better man than them all?

Note: The Roosevelts income of $93,602 in 1937 is equivalent to $1,504,178 today, while the Carters income of $267,195 in 1978 is equivalent to $948,325. A study of historical Presidential tax returns is interesting, informative, and highly recommended for anyone serious about tax reform, as is a study of historical income tax rates.

Tax Return Analysis: Romneys versus Obamas

Following are some other key statistics from the Romneys and Obamas tax returns:

It’s notable that 94.8% of the Romneys income came from investments – interest, dividends and capital gains, versus -12.8% for the Obamas. The Obamas tax return includes a capital loss carryover of $116,151, a consequence of failed investments from the past. That’s interesting, since Barack Obama is the one always harping on the idea of government investment, yet all the while it turns out that successful investing is a trait beyond the scope of his expertise. Small wonder his taxpayer-funded green energy investments have turned out to be dismal failures.

What’s even more notable is the fact that roughly 62.4% of the Romneys income came from capital gains and qualified dividends which, based on current law, are taxed at a maximum rate of 15.0%. In contrast, around 99.0% of the Obamas income came from wages and net book sales which are taxed at ordinary rates of as high as 35.0%. Thus the Romneys effective tax rate should be considerably lower than the Obamas; but it turns out that both couples effectively paid about the same overall effective tax rate, 25.2% versus 24.8%, as explained earlier. So in spite of favorable capital gains rates, overall effective tax rates tend to balance out. One reason for this phenomenon is that most of the States don’t reciprocate (i.e. there is no favorable capital gains rate at the state level).

Next, we find that the Romneys paid $102,790, or 0.8% of their income, in foreign taxes, while the Obamas paid $5,841, or 0.7%. Thus, on a percentage basis, both families earned about an equal amount of their income from foreign sources. So is either candidate more likely to outsource American jobs than the other? I guess Obama could limit sales of his books to the USA, and cut-off the rest of the world, as if that would make any sense. I’ll let you figure that one out.

Next, we discover that the Obamas claimed a retirement contribution deduction of $49,000, or 5.8% of their income, while the Romneys claimed none. Foul! The question is that since Barack Obama now qualifies for a $191,000 a year presidential pension, why is he continuing to maximize the simplified employee pension account (SEP) deduction? In the private sector, the most anyone can exclude from income for retirement purposes, including employer matching contributions, is $49,000 per year. Yet Barack Obama gets to claim this maximum deduction, while at the same time deferring taxes on the annual contributions the U.S. Treasury makes to his pension account. Does that sound fair to you? Is Obama paying his fair share?

Is a guaranteed $191,000 a year for life, on top of a virtually unlimited presidential expense account, insufficient for Mr. Obama? In stark contrast, Mitt Romney refused to take a salary while he served as Governor of Massachusetts. So has anyone bothered to ask if he would waive his presidential salary? Would he also consider waiving the presidential pension and lush lifetime expense account? Somebody needs to ask that question. By the way, Mitt Romney could have claimed exactly the same SEP-IRA deduction that the Obamas did, based on his net business income, which would have further reduced his tax liability, but chose not to. So what does this say about character?

Next, the Obamas also claimed a $47,564 home mortgage deduction amounting to 5.6% of their income, while the Romneys claimed none. Wow! So since the Obamas claimed both a $47,564 home mortgage deduction, and the $49,000 maximum retirement contribution exclusion, while the Romneys claimed neither, this gave the Obamas an 11.4% handicap. Note: According to the Internal Revenue Service, in tax year 2010, only 25.8% of tax filers claimed the home mortgage deduction, which kind of makes the case for placing limits on this deduction.

Now when it comes to charitable contributions, as stated earlier, the Romneys gave $4,000,000, or around 29.2% of their income, while the Obamas gave $172,130, or 20.4%. But since the Romneys only chose to write-off $2,250,772, their actual deduction amounted to just 16.4% of their income. So once again the Obamas had a slight advantage, yet when their total itemized deductions are compared, we find that the Romneys amounted to 34.2% of their income, while the Obamas amounted to 33.0%, or about the same.

Finally, the Romneys federal taxes included an Alternative Minimum Tax (AMT) of $674,512, representing 4.9% of their income, while the Obamas incurred a liability was $12,491, or 1.5%. The AMT limits certain deductions and tax preferences to ensure that high income earners pay at least a minimum amount of tax. So what will happen when the AMT is eliminated? Will the rich pay less in taxes? Not necessarily, because if the same deductions and tax preferences for high income earners were eliminated from the get go, then the AMT wouldn’t be necessary. Isn’t this the objective of tax reform, to eliminate deductions and preferences, lower tax rates, and thus simplify the tax code? So when tax rates are cut by 20% in the next year or two, and that’s where we’re headed, the first place to look for deductions and preferences to eliminate is within current AMT regulations.

Content of Character

So what’s the point? First of all, we learned that in 2011, the Romneys paid a total of $3,454,434 in federal, state and local taxes, while the Obamas paid $209,057. When state and local taxes were added to the mix, we found that the Romneys paid an overall effective tax rate of 25.2%, versus the Obamas 24.8%. But when charitable contributions were figured in, we discovered that the Romneys paid a real effective tax rate of 54.4% compared to the Carters 45.6%, the Obamas 45.1%, and the Roosevelts 33.3%.

What should be clear is that measuring a person by the size of their effective tax rate reveals nothing about their character. If those who pay the largest share of taxes are the most patriotic among us, then that all but eliminates everyone except for the Top 1 Percent. If effective tax rates are so important, then why not simply convert to a flat tax (i.e. the FairTax)? That way the concept of effective tax rates becomes meaningless. In a perfect world it seems this would be the goal.

Is paying more taxes than absolutely necessary savvy? No, but anyone who voluntarily pays more must really love this country. Mitt and Ann Romney didn’t claim all of the charitable contributions they could have, and thus paid a higher amount in taxes than legally required. When it comes down to it, no one that I know cares anything about increasing their own personal effective tax rate; most are like the Obamas, preoccupied with finding ways to reduce it.

The main point of this post has been to prove that measuring any American by the size of their effective tax rate reveals next to nothing about the content of their character. Thus, Barack Obama’s entire fair share mantra turns out to be nothing but rubbish. The rich already pay more than their fair share sir. It’s time to bring on a business guy, someone who really understands what’s going on in this country. It’s time to lower income tax rates, limit deductions and preferences, broaden the tax base, and reduce the size of government. It’s time to lower the federal deficit and move towards a balanced budget. It’s time to purge Barack Obama’s jaded philosophy of – do as I think, not as I do.

Definitions:

(a) The Traditional Model – Under the traditional model, the effective tax rate is calculated by dividing total income taxes (before tax credits and other taxes), by total income (before exclusions and deductions).

(b) Effective Federal Tax Rate – The effective federal tax rate is determined by dividing total federal income taxes (before tax credits and other taxes), by total income (before exclusions and deductions).

(c) Effective State and Local Tax Rate – The effective state and local tax rate is determined by dividing total state income taxes, real estate taxes, and personal property taxes claimed on federal Schedule A, by total income (before exclusions and deductions).

(d) Overall Effective Tax Rate – The overall effective tax rate is calculated by dividing total federal income taxes (before tax credits and other taxes), plus total state and local taxes as in (c), by total income (before exclusions and deductions).

(e) Real Effective Tax Rate – The real effective tax rate is calculated by dividing total federal income taxes (before tax credits and other taxes), plus state and local taxes as in (c), plus charitable contributions, by total income (before exclusions and deductions).

References:

The Romneys 2011 Tax Return

The Obamas 2011 Tax Return

The Roosevelts 1937 Tax Return

The Carters 1978 Tax Return

Romney’s Taxes: A Window Into Charitable Giving

Even at 14%, Romney Pays a Higher Rate than 97% of His Fellow Americans

Ex-presidents have huge expense accounts

President Obama’s Taxpayer-Backed Green Energy Failures

Thursday, October 18, 2012

Debate 2 | Obama’s Oil & Gas Rhetoric


Forget Fact Checking: Where’s the Logic?

- By: Larry Walker, Jr. -

In a real town hall meeting, the person asking a question gets to follow up. What we saw Tuesday night wasn’t a town hall meeting at all. The readers appeared to be simply mouthing someone else’s prearranged questions. There wasn't any passion. But what if the public was allowed to retort? Following are my thoughts on the lecture Barack Obama provided in response to the second question, a rather simple one which he has yet to answer.

QUESTION: Your energy secretary, Steven Chu, has now been on record three times stating it's not policy of his department to help lower gas prices. Do you agree with Secretary Chu that this is not the job of the Energy Department?

OBAMA: The most important thing we can do is to make sure we control our own energy. So here's what I've done since I've been president. We have increased oil production to the highest levels in 16 years.

Natural gas production is the highest it's been in decades. We have seen increases in coal production and coal employment. But what I've also said is we can't just produce traditional source of energy. We've also got to look to the future. That's why we doubled fuel efficiency standards on cars. That means that in the middle of the next decade, any car you buy, you're going to end up going twice as far on a gallon of gas. That's why we doubled clean -- clean energy production like wind and solar and biofuels.

So by the middle of the next decade, or around the year 2025, if I’m in the new car buying market at the time, I’ll be able to go twice as far on a gallon of gas. But, since a gallon of gas today costs more than twice what it did four years ago, we’re already at net zero. Mr. President, I was talking about today, right now, not 13 years from now or sometime after I’m dead and gone. And what exactly do coal, wind and solar have to do with the price of gasoline? Retail gasoline prices are sitting at a national average of $3.77 a gallon, just $0.33 off the all time high of $4.10 set in July 2008 (see chart above).

And all these things have contributed to us lowering our oil imports to the lowest levels in 16 years. Now, I want to build on that. And that means, yes, we still continue to open up new areas for drilling. We continue to make it a priority for us to go after natural gas. We've got potentially 600,000 jobs and 100 years worth of energy right beneath our feet with natural gas.

Oil imports may be at the lowest levels in 16 years, but the gasoline I need to fill up my tank only cost an average of $1.23 a gallon in 1996, which would be equivalent to around $1.81 today, yet I’m paying around $4.00. Is the reason gasoline cost so much today perhaps the result of fewer imports? And as far as natural gas goes, can I fill up my tank with that tomorrow morning?

And we can do it in an environmentally sound way. But we've also got to continue to figure out how we have efficiency energy, because ultimately that's how we're going to reduce demand and that's what's going to keep gas prices lower.

We can drill for oil in an environmentally sound way? What does that mean? And what do you mean by ultimately reducing demand? How far away is that, longer than four years? Although it’s true that less demand can result in lower prices, it only works if supply remains constant or increases. But if both supply and demand are cut at the same time, then consumers won’t realize any price change at all. And if demand declines too rapidly, then many suppliers may be forced out of business. And then what will we do?

[The price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D). The diagram shows a positive shift in demand from D1 to D2, resulting in an increase in price (P) and quantity sold (Q) of the product.]

Now, Governor Romney will say he's got an all-of-the-above plan, but basically his plan is to let the oil companies write the energy policies. So he's got the oil and gas part, but he doesn't have the clean energy part. And if we are only thinking about tomorrow or the next day and not thinking about 10 years from now, we're not going to control our own economic future. Because China, Germany, they're making these investments. And I'm not going to cede those jobs of the future to those countries. I expect those new energy sources to be built right here in the United States.

Mr. President, I don’t need you to tell me what Governor Romney’s plan is, he can do that himself. The question was: Do you agree with Secretary Chu that it’s not the job of the Energy Department to help lower gas prices? So it seems your answer is that I need to be thinking about 10 years from now, and forget about how I’m going to get to and from work today, tomorrow, next week, or even four years from now. I see. And you’re willing to cede the jobs of the present in hopes that jobs of the future will be based on your present day policies, which for all we know might be considered archaic a month from now.

That's going to help Jeremy get a job. It's also going to make sure that you're not paying as much for gas.

What’s going to help Jeremy get a job, a policy geared to kick in by the middle of the next decade? In the meantime I guess poor Jeremy will have to get by on two or three McJobs, and hope he makes enough to cover the cost of getting to and from work. So is that it? Are you finished?

CROWLEY: Mr. President, let me just see if I can move you to the gist of this question, which is, are we looking at the new normal? I can tell you that tomorrow morning, a lot of people in Hempstead will wake up and fill up and they will find that the price of gas is over $4 a gallon. Is it within the purview of the government to bring those prices down, or are we looking at the new normal?

OBAMA: Candy, there's no doubt that world demand's gone up, but our production is going up, and we're using oil more efficiently. And very little of what Governor Romney just said is true. We've opened up public lands. We're actually drilling more on public lands than in the previous administration and my -- the previous president was an oil man.

Wait, so world oil demand and our production are going up? But you just said that our ultimate goal is to reduce demand in order to keep gas prices lower. So if the supply and demand of oil is going up, and you’re drilling more than the last administration, then how is this achieving your goal? And actually very little of what you just said is true. According to the U.S. Energy Information Administration production of finished motor gasoline is trending downward, not up (see chart above). Maybe this is why gasoline prices are hovering near historic highs? After all, we’re not talking about jet fuel and diesel, are we?

And natural gas isn't just appearing magically. We're encouraging it and working with the industry.

Can I fill up my car with natural gas tomorrow morning? Because if I could, that would truly be magical.

And when I hear Governor Romney say he's a big coal guy, I mean, keep in mind, when -- Governor, when you were governor of Massachusetts, you stood in front of a coal plant and pointed at it and said, "This plant kills," and took great pride in shutting it down. And now suddenly you're a big champion of coal.

Maybe Romney’s a big champion of jobs, unlike you Mr. President. At least he's got a plan to create 12 million jobs in four years to eliminate the current jobs deficit. Where's yours?

So what I've tried to do is be consistent. With respect to something like coal, we made the largest investment in clean coal technology, to make sure that even as we're producing more coal, we're producing it cleaner and smarter. Same thing with oil, same thing with natural gas.

Yeah, consistently wrong. The question wasn’t about coal, clean coal or natural gas, you we’re specifically asked to comment on the Energy Departments role in keeping gasoline prices affordable.

And the proof is our oil imports are down to the lowest levels in 20 years. Oil production is up, natural gas production is up, and, most importantly, we're also starting to build cars that are more efficient.

So now you’re saying that oil imports are down to the lowest levels in 20 years. A minute ago you said 16 years. Let’s see, so that would be 1992, right? In 1992 the price of regular unleaded gasoline averaged $1.13 per gallon, which would be equivalent to $1.86 today. So if oil production is up, oil imports are down, and they’re building more efficient cars, then why am I still paying close to $4.00 a gallon at the pump?

And that's creating jobs. That means those cars can be exported, 'cause that's the demand around the world, and it also means that it'll save money in your pocketbook.

So by producing more efficient cars, America will someday be able to export them to Libya, Egypt, Iraq, Iran, Greece, Spain and such, and this will create jobs and save money in my pocketbook. Well, that’s interesting, albeit illogical.

First of all, switching over from the production of less efficient to more efficient cars doesn’t add any net jobs, because as new jobs are created, old ones are destroyed. It’s at best a zero sum game, and perhaps even worse looking at the latest green energy failure. The electric-car battery producer, A123 Systems, Inc. filed for bankruptcy just hours ahead of your wishful thought. How many is that? Looks like around 16 so far, see Obama's List Of Failed Green Energy Jobs & Companies.

Secondly, as far as saving money in my pocketbook, what’s a pocketbook? It seems that you’re either talking about something way off in the distant future, or the archaic past, but the question pertains to right now, today, within my lifetime.

OBAMA: That's the strategy you need, an all-of-the-above strategy, and that's what we're going to do in the next four years.

No Mr. President, that’s not the strategy I need. What I need is for gasoline prices to drop by at least half of where they are today. So do you agree with Secretary Chu that it’s not the job of the Energy Department to help lower gasoline prices or not? Will gasoline prices be half what they are today if you get reelected, or twice as high? Oh never mind, I’m leaning heavily towards the other guy anyway. I can make sense out of Romney's policies, but as for yours, the record speaks for itself.

References:

Presidential Debate Full Transcript | ABC News

U.S. Energy Information Administration

A123 Bankruptcy Gives Romney New Example of Green-Energy ‘Loser’

Obama's List Of Failed Green Energy Jobs & Companies!!!

U.S. Jobs Deficit Improves by 1,000 in September

Sunday, October 14, 2012

Austerity Matrix


Excerpt from: Krugman’s Anti-Austerity Madness

- By: Larry Walker, Jr. -

In economics, austerity refers to a policy of deficit-cutting by lowering spending via a reduction in the amount of benefits and public services provided. Austerity policies are often used by governments to try to reduce their deficit spending and are sometimes coupled with increases in taxes to demonstrate long-term fiscal solvency to creditors. However, austerity policies don’t have to include tax hikes, and in fact as we shall see the optimal austerity policy actually involves a combination tax cuts paired with deficit reduction.

The key phrase above is “to demonstrate long-term fiscal solvency to creditors”. If there were no creditors, then politicians and government officials wouldn’t have to worry about austerity. If there were no creditors, nations could simply print their own currencies on an unlimited basis, and spend without consequence. But in the real world, since creditors exist, some measure of austerity is required no matter what emotions dictate. Besides, history itself teaches us that printing money without restraint is the surest path to the vicious spiral of hyperinflation, a large increase in the money supply not supported by gross domestic product (GDP) growth, which leads to rapid erosion of a nation’s currency and ultimately to ever more pain.

In the table below, I have summarized all the possible fiscal austerity combinations available to the United States and Europe. When viewed graphically the optimal policy choice should be clear.

Although many Americans, including the President, think the way forward should involve some combination of spending cuts and tax hikes, credit ratings agencies disagree. For example, according to Fitch Ratings Co., “Fiscal Indecision Threatens US ‘AAA’ - Under current law, tax increases and spending cuts equivalent to about 5% of GDP will take effect in 2013 – if permanent, such a “fiscal cliff” could derail the US economic recovery…” Yet it’s not the spending cuts that are problematic, deficit reduction is a must, but rather the combination of tax hikes and spending cuts.

Following the Austerity Matrix, it turns out that:

  1. Tax hikes lead to the fiscal cliff no matter what happens with spending. Why? Because tax hikes lead to private sector austerity, resulting in job and benefit cuts, which leads to lower tax revenues and less economic output. So tax hikes should be off the table. The only reason they’re still being discussed in the United States is because of Obama’s “fairness doctrine”, which if you ask me is total nonsense. Besides, raising taxes on 1% of taxpayers won’t change anything for the other 99%, where the main problem is the lack of opportunities.

  2. Maintaining current tax rates can work, but only in conjunction with spending cuts. However, this only leads to slow growth, which is basically what we have now. Our current real gross domestic product (GDP) annual growth rate of 1.3% is not enough to change the trajectory of our ever increasing jobs deficit. If tax rates are maintained while spending levels are maintained or raised, we still wind up plunging over the fiscal cliff.

  3. The optimal fiscal austerity policy involves a combination of tax cuts and deficit reduction, which leads to rapid growth, or exactly what is needed following an economic crash. But, cutting taxes while maintaining or increasing spending levels only hurtles us over the fiscal cliff.

So there is only one viable fiscal austerity alternative: Cut taxes and reduce government spending. But this always brings up the same old moth-eaten question from faithless do nothings. How will you pay for the tax cuts? The apparently not so obvious answer is -- with jobs.

Did you get that? Cutting tax rates across the board, which incidentally is included in the Romney-Ryan Plan, is not a way of giving anyone anything, since the government is merely enabling everyone to keep more of their own money. The dirty little secret is that this is how you grow an economy. When the government confiscates less money from the private sector, the economy eventually finds its footings and will dig its own way out of any hole. I challenge anyone to show me when this form of austerity has ever been implemented and failed to deliver greater revenues and higher levels of economic growth.

At this point you’re probably thinking, “Well, Bill Clinton raised taxes and cut spending and everything was copacetic.” But according to history, that’s actually incorrect. Although it’s true that President Clinton raised taxes during his first term, government spending also increased, that is until 1995 when his Democratic party lost control of both Houses of Congress.

It was actually during his second term when the austerity policy I’m talking about took place. That’s when Republicans passed the Taxpayer Relief Act of 1997, a reconciliation bill that reduced taxes and hence increased the deficit, paired with the Balanced Budget Act of 1997 (H.R. 2014 and H.R. 2015 respectively), each signed by President Clinton. Thus, it was actually tax cuts in conjunction with deficit reduction which produced the boom of the 1990’s, not the Clinton tax hikes.

The only differences between 1997 and today are that the United States wasn’t teetering on the edge of a fiscal cliff, and Republicans don’t currently control both Houses of Congress, but the solution to greater revenues, less spending and higher economic growth is the same.

References:

Krugman’s Anti-Austerity Madness

Has Obama’s Loot-and-Plunder Theory Worked?

Photo Credit:

Covertress | From Riches to Rags: Inflation & Poverty in Zimbabwe

Saturday, October 6, 2012

U.S. Jobs Deficit Improves by 1,000 in September


Measuring Relevance

:: The U.S. Jobs Deficit declined by 73,000 in September, however since it increased by 72,000 just one month prior, the result was a net improvement of an entire 1,000 jobs since July.

- By: Larry Walker, Jr. -

The ever elusive jobs deficit rose from 11,760,000 in July to 11,832,000 in August, and then pulled back to 11,759,000 based on yesterday’s Employment Situation Report. Employers added 114,000 jobs for the month, while the July and August figures were revised upward by 86,000. Thus, the U.S. realized a net gain of an even 200,000 Nonfarm jobs in September. And, since the U.S. needs to create a minimum of 127,000 jobs a month solely to keep pace with population growth; this results in an overall improvement to the jobs deficit of 73,000, as compared to the prior report. However, since the deficit increased by 72,000 in August, it really amounts to a net improvement of a mere 1,000 jobs since July.

Here’s the big picture. Today 12,088,000 Americans are officially unemployed (down from 12,544,000 in August). Another 6,427,000 are unemployed and want jobs, but have dropped out of the labor force and are not officially counted (down from 7,031,000 in August). Still another 8,613,000 are employed part-time for economic reasons (up from 8,031,000 in August). What this means is that 27,128,000 American’s are still unemployed or underemployed, an amount essentially unchanged since August. The truth is that if Barack Obama’s trickle-down-government approach had worked, then the jobs deficit wouldn’t be worse today than it was in December 2009, when it registered in at 11,479,000, yet it is.

In light of September’s minuscule improvement, how many jobs must now be created each month in order to reach full-employment? How long will this take? And, in light of the answer, is another four years of Obamanomics the cure? But first here’s a quick synopsis.

Synopsis

What is the jobs deficit? — It’s a measure of how far the United States has strayed from full-employment during the current economic recovery. More specifically, it tracks the shortfall in the number of jobs needed to keep up with population growth, and to recover those lost since the Great Recession.

Basically, the U.S. has needed to add 127,000 jobs a month since December 2007, the month the recession commenced, simply to keep up with population growth. Thus, a minimum of 7,366,000 new jobs have been needed since the recession began (58 months times 127,000). However, instead of adding jobs, the U.S. has instead lost 4,393,000 (see related table). So since we needed to add a minimum of 7,366,000, but instead lost 4,393,000, the sum of the two equals the current jobs deficit of 11,759,000 (see chart above). Got it?

Who initiated the benchmark, some right-wing economist? — No. The idea was actually initiated by Economist Paul Krugman. Here’s a quote from his December 2009 column: “Even if we add 300,000 jobs a month, we’re looking at a prolonged period of suffering — a huge cost from the Great Recession. So that’s kind of a minimal definition of success. Anything less than that, and it’s bad news.” But sadly, since December 2009, the U.S. has only averaged about 127,000 jobs a month. So in other words, we’ve basically been treading water since the measure was first established. For more, see Paul Krugman’s New York Times opinion piece entitled, The Jobs Deficit.

Updated Jobs Benchmark

Updating Mr. Krugman’s benchmark with the latest figures, we discover that to be meaningful, the number of jobs needed to return to more or less full employment by December of 2014 (the original target date), or within the next 27 months, is now 562,518 jobs a month, as follows:

In order to keep up with population growth, we would need to create 127,000 jobs times 27 months, or 3,429,000. Add in the need to make up for the jobs deficit and we’re at around 15,188,000 (3,429,000 + 11,759,000) over the next 27 months — or 562,518 jobs a month.

Since this isn’t going to happen under the evanescent policies of Barack Obama, we might as well extend the time frame. But, even if we extend the target date to 5 years from today, which will be more than 8 years from the time the recession ended, then the number of jobs needed to return to more or less full employment by September of 2017, or within the next 60 months, is now 322,983 jobs a month, as follows:

In order to keep up with population growth, we would need to create 127,000 jobs times 60 months, or 7,620,000. Add in the need to make up for the jobs deficit and we’re at around 19,379,000 (7,620,000 + 11,759,000) over the next 60 months — or 322,983 jobs a month.

Did the U.S. add 562,518 jobs last month? Nope. In fact we haven’t come anywhere close during the entire Obama recovery. Did U.S. employers add 324,200 jobs last month? Nope. We haven’t even come close to that, with the exception of the single month of May 2010, but those were just temporary Census jobs which disappeared in subsequent months.

Le Coup de Grâce

When averaged, the number of Nonfarm jobs created since the end of January of 2009 comes to a loss of -20,000 jobs a month. Well, that doesn’t work. So if we average the number of jobs created over the last 9 months, we arrive at 146,000 a month. That’s better. And when we divide this into the 4,393,000 jobs lost since the recession began, it tells us that at the current pace we should recover the jobs lost to the recession in another 30 months, or 2.5 years. That’s fantastic! It means it will only have taken 6.5 years to get back to square one!

The only problem with this less than rosy scenario is that since we still need to create a minimum of 127,000 jobs a month, in order to keep up with population growth, based on the 9-month average, the jobs deficit is only declining by 19,000 jobs a month (146,000 – 127,000). Thus, full-employment is more like 619 months away, or another 52 years. So four more years of the trickle-down-government approach places us on track to reach full-employment by around the year 2064. Huh? Sorry Democrats but, we can’t wait.

No matter how you spin the numbers, they aren’t good. Until we see the number of Nonfarm jobs expanding by a minimum of 322,983 a month, for a sustained period of at least five years, anything short is just bad news. The addition of 114,000 jobs in September was 65% short of the mark required to reach the long-term target. And with the national debt hovering above $16 trillion, and beginning its ascent towards $20 trillion, there’s really no good reason to consider a second Obama term. None!

The Obama-Biden program establishes a goal of creating 1,000,000 new manufacturing jobs over the next four years, which would be an improvement, considering their policies have thus far resulted in a loss of 610,000, since January 2009. But that only accounts for a potential of 250,000 jobs per year, or around 21,000 a month. What about the other 300,000 jobs?

In stark contrast, the Romney-Ryan Plan includes a goal of creating more than 12,000,000 jobs over the next four years, or more than 250,000 a month. So which plan is most likely in the best interests of the United States? The one we’ve already witnessed for the last four years, or something different? Vote Romney-Ryan for real change. Hey, it’s math! It’s arithmetic! It’s all about relevance! You can’t fool the jobs deficit.

“You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.” ~ Abraham Lincoln

Data: Worksheet on Google Drive

Photo Credit: Direct Relevance | University of Miami, Department of Computer Science

Related:

U.S. Jobs Deficit Increases by 72,000 in August

U.S. Jobs Deficit Holds at 11,760,000 in July

U.S. Jobs Deficit Grows by 47,000 in June

The Real Jobs Deficit | Moving in the wrong direction.

Obama Jobs Scorecard, Part 3 | The American Dream

Cross Reference: This Week’s Watcher’s Council Nominations – Paul Ryan Edition | Watcher of Weasels