GOLDMAN: The Economy Is Slowing, And This Weeks Jobs Report Will Be Worse Than What People Expect

Goldman Sachs is out with a depressing way to start the week: Bearish commentary on the state of the economy and a negative call on this Friday's big jobs report.

The first is that Goldman's own proprietary economic indicator shows a clearly decelerating US economy.

Then Hatzius says that this Friday's jobs report will be weaker than the 165K new new jobs created that analysts expected. Hatzius sees just 125K.

Most of the job surge over the last few months came in cold states (suggesting that the weather played a huge impact) and we really haven't seen a payback, as evidenced that the dark line hasn't fallen sharply below the light line (for warm states).

There is no doubt that greater exploration and production of our energy resources will create jobs and increase revenue. The question is what will we do with that increased revenue?

We are witnessing the collapse of the welfare state, which is unsustainable. We owe $15.6 trillion and borrow 42 cents of every federal dollar spent. And the entitlement programs represent an unfunded liability of over $60 trillion (75 year period.) In 1950 there were 16 workers for every retiree; today there are 3.3; and by 2030 there will be two workers for every retiree. And by 2030 one in every 5 residents of this country will be 65 or older, twice what it is now.

The multinational corporations are moving abroad to places like China and India that can provide just as educated a workforce as we can at much lower cost with fewer regulations and closer cooperation and support from the host country government. The multinationals are equipping their factories abroad with the latest technology to make their workers just as productive as Americans. It will be harder and harder to compete globally.

The U.S. adds one international migrant (net) every 36 seconds. Immigrants account for one in 8 U.S. residents, the highest level in more than 90 years. In 1970 it was one in 21; in 1980 it was one in 16; and in 1990 it was one in 13. In a decade, it will be one in 7, the highest it has been in our history. And by 2050, one in 5 residents of the U.S. will be foreign-born. Currently, 1.6 million legal and illegal immigrants settle in the country each year; 350,000 immigrants leave each year, resulting in a net immigration of 1.25 million.

Since 1970, the U.S. population has increased from 203 million to 310 million, i.e., over 100 million. In the next 40 years, the population will increase by an additional 130 million to 440 million. Three-quarters of the increase in our population since 1970 and the projected increase will be the result of immigration. The U.S., the world’s third most populous nation, has the highest annual rate of population growth of any developed country in the world, i.e., 0.963% (2011 estimate,) principally due to immigration.

87 percent of the 1.2 million legal immigrants entering annually are minorities as defined by the U.S. Government and almost all of the illegal aliens are minorities. By 2019 half of the children 18 and under in the U.S. will be classified as minorities and by 2039, half of the residents of this country will be minorities. Generally, immigrants and minorities vote predominantly for the Democrat Party. Hence, Democrats view immigration as a never-ending source of voters that will make them the permanent majority party. It is worth noting that the out of wedlock birth rate for Hispanics is over 50% topped only by the black rate of 71% rate. And both have over 50% school drop out rates. These two group are the fastest growing part of our society. That does not bode well for our future unless we can find ways to keep families together and educate their children.

Minorities are disproportionately affected by the importation of cheap, unskilled labor, which results in unemployment and depressed wages. The Bureau of Labor statistics for January 2012 show a national unemployment rate of 8.3 percent, including 13.6 percent for blacks and 10.5 percent for Hispanics. These numbers are probably much higher, especially in urban areas. The silence from the Black and Hispanic Caucuses has been deafening on these Depression-like numbers. In the meantime, there are 8 million illegal aliens holding jobs and we are importing another 125,000 legal foreign workers A MONTH! This includes new permanent residents (Green Cards) and long-term temporary visas and others who are authorized to take a job.

57 percent of immigrant headed households with children use at least one major welfare program. We are importing poverty and hundreds of thousands of high school dropouts every year through our kinship system of immigration. 25 percent of the adult legal immigrants who enter each year lack even a high school degree.

Unless we go after the drivers of our debt (entitlement programs) and reduce our immigration levels and go to a merit based system, increasing our revenue and growing jobs will not solve the problem, just delay the final reckoning. The Left will want to use the increased revenue to keep the welfare state going a little longer. They will raid defense spending until that runs out. We just have to look to Europe to see our future if we continue on the same path.

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