Posted on 03/03/2013 10:12:32 AM 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).
The Sequesteria continues. NBC has a list of state by states disasters that will occur … from an itsy-bitsy slowdown in government spending.
Another view of sequestration.
If we see a blip up in unemployment or U6 in the coming months, remember 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. Here is wages and salaries (divided by GDP) plotted against government spending. Somehow, American households are worse off as government grows.
We need SERIOUS budget cuts in the USA and there is plenty of outrageous waste in spending that could be cut.
* $1 million lottery winner who bought a new home and car receiving food stamps; “I thought that they would cut me off, but since they didn’t, I thought maybe it was okay because I’m not working.”
* Part of an $11 million grant intended to provide business attire to 400 low-income job-seekers helped only two people
* Detroit paying city employees overtime to go on a spending spree with federal cash; The city has accumulated nearly $70 million in unspent community development and if it isn’t spent, the city risks not get as much money in future years
* Party in the USDA: Agriculture Secretary kicks off department’s 150th anniversary the commemoration and USDA field offices across the country will celebrate all year
* Massachusetts anti-poverty agency misspent up to $224,110 in federal grants, including pay to top exec who spent afternoons playing video poker and card games at casino
* USDA rural development grant paying for a gateway arch at the entry of an Oregon town with less than 10,000 residents
* Naked Cow Dairy receives USDA grant to promote its cheese even though it doesn’t even have the equipment to make cheese on a commercial scale
* Federal funds pay to give store fronts and building facades in Texas a facelift
* While in jail, murderer collected $30,000 in unemployment benefits, which was used to benefit a criminal gang
* Federal agencies study relationship breakups in the Facebook era
* A new $750,000 soccer field being built for detainees at Camp 6 in Guantanamo; The detainees will now have three recreation facilities
* NASA studies menu options for trips to Mars; Participants will get an all-expenses paid trip to Hawaii and $5,000
* Scarcely used Florida airport to spend $575,000 of federal funds to relocate alligators and scare away birds
* USDA grant to promote alpaca products
* USDA grant to advertise Idaho potatoes
* Audit of Wisconsin job training agency finds spending irregularities, including travel, reimbursement, procurement and cash control; CEO resigns and then hired back as a consultant
* Federal health funds spent on a campaign-style flier promoting mayor seeking re-election weeks before his name appeared on the ballot; Mayor admits “it was flashy and high-quality” but claims “if it got one person (out of depression) or thinking about not committing suicide, then it did its job.”
* About a third of federal grants steered to a government contractor in Connecticut used to fund projects marred by unnecessary, shoddy or incomplete lead-reduction work
* National Science Foundation spends $705,000 to research whether or not stressed out birds make good parents
The list goes on and on and you get the idea. To quote the Mel Gibson character from the flick Get the Gringo, “And stop spending my f***ing money!”
Bingo gringo.
It has all been a mirage. We simply have used debt to ‘grow’ the economy.
Kind of like all those home equity loans
people used for income.
This bubble could go off like a nuke.
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