Posted on 03/02/2013 6:01:45 PM PST by whitedog57
Sequestration, the measly slowdown in the growth rate of government spending, was President Obama and his Chief of Staff (now Treasury Secretary) Jacob Lew’s idea. Now President Obama has signed it into law.
Today, I received an email from The White House explaining that it is all the Republicans fault for not closing tax loopholes on the wealthiest Americans. Furthermore, hundred of thousands of Americans will lose their jobs … or see their paycheck reduced. Dang, I wish Obama had thought of that in the first place!!
Well, this is a better forecast that Maxine Waters’ (D-CA) prediction of 170 million job losses (since that is more than the total labor force in the USA).
But the truth is that the American economy has been stagnant for years, at least in terms of median income. In 1975, median income was $44,851. In 2011, median income was $50,054. Even worse, 2011 median income is now below 1989 median income in real terms.
How is it that we had a home ownership and house price boom when real income has been effectively flat? Ah, low down payments, streamlined credit and a big boost from The Fed lowering mortgage rates. So when the underlying economy can’t drive the housing market, create an artificial bubble.
So, even BEFORE sequestration, wages and salaries have been stagnant, a bad sign.
And the more the Federal government spends, the worse it is for American households.
Say maybe President Obama and now Treasury Secretary Lew were right. Cutting the Federal budget is the only thing that can save the US from default.
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