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Peter Schiff: Economy on Thin Ice, the Poor and Middle Class Should Prepare to Suffer the Most

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Photo Credit: NoHoDamon / Creative Commons Friday’s release of disappointing August payroll numbers should have been a jarring wake-up call warning Wall Street that the economy has been treading on thin ice. Instead the alarm clock was stuffed under the pillow and Wall Street kept sleeping. The miss was so epic in fact (the 142,000 jobs created was almost 40% below the consensus estimate) that the top analysts on Wall Street did their best to tell us that it was all just a bad dream. Mark Zandi of Moody’s reacted on Squawk Box by saying “I don’t believe this data.” The reliably optimistic Diane Swonk of Mesirow Financial told Reuters the report “sure looks like a fluke, not a trend”.

But the opinions of those that really matter, the central bankers in charge of the global economy, are likely taking the report much more seriously. . . Since the markets crashed in 2008, central banks around the world have worked feverishly to push up the prices of financial assets and to keep consumer prices rising steadily. They have done so in the official belief that these outcomes are vital ingredients in the recipe for economic growth. The theory is that steady inflation creates demand by inspiring consumers to spend in advance of predictable price increases. . . In other words, seed the economy with money and inflation and watch it grow.

Thus far the banks have been successful in creating the bubbles and keeping inflation positive, but growth has been a no show. The theory says the growth is right around the corner, but like Godot it stubbornly fails to show up. This has been a tough circle for many economists to square.

. . .This is where we are with stimulus. Six years of zero percent interest rates and trillions and trillions of new public debt have failed to restore economic health, but our conclusion is that we just haven’t given it enough time or effort. My theory is a bit different. Maybe zero percent interest rates and asset bubbles hinder rather than help a real recovery. Maybe they resurrect the zombie of a failed model and prevent something viable and lasting from gaining traction? This is a possibility that no one in power is prepared to consider. . .

The tragedy is that if the policy fails to produce real growth, as I am convinced it will, the price will be paid by those elements of society least able to bear it, the poor and the old. Inflation and stagnation mean lost purchasing power. The rich can mitigate the pain with a rising stock portfolio and more modest vacation destinations. But they won’t miss a meal. Those subsisting on meager income will be hit the hardest.

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Unprecedented: Food Stamp Enrollments Top 45 Million, 3 Years in a Row

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Photo Credit: AP

Photo Credit: AP

President Barack Obama and vulnerable Democrats facing tough midterm elections in 71 days are scrambling to prop up the moribund U.S. economy in the minds of disgruntled voters. However, one of the quickest shorthand economic measurements–food stamp enrollments–paints a startling portrait of the “new normal” in the Obama economy.

According to the Department of Agriculture’s most recently released data, the number of individuals enrolled in the food stamp program (known officially as the Supplemental Nutrition Assistance Program, or SNAP) has remained above 45 million every single month for three years straight.

In May 2011, 45,410,683 individuals received food stamps. As of May 2014 (the most recent date for which data are available), 46,225,054 people were on food stamps. At no point between the two dates did the number of food stamp enrollments ever fall below the 45 million mark.

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How Obamacare Is Constricting the Economy

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Photo Credit: TownHallWhile the Bureau of Labor Statistics’ jobs report this week contained mostly good news, our economic statistics have been shaky over the past few months. A major downward revision to economic gowth has a report showing that the economy contracted by almost 3% last quarter.

It’s possible that Obamacare is holding back the economy. Jared Meyer, policy analyst at Economics 21, wrote about how Obamacare’s hurting economic growth:

The Employer Mandate. The Act originally required businesses with over 49 full-time equivalent employees to offer insurance that met government requirements by January 1, 2014, but President Obama has delayed the mandate. Once implemented, if employers decide not to offer coverage, they will face fines of $2,000 per worker (the first 30 workers are exempt). This penalty is effectively over $3,000 since it is not tax deductible. Going from 49 to 50 workers will cost a business an additional $60,000.

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Save the American Economy. Have a Baby. Make it Three.

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Photo Credit: iStockI know it sounds creepy to suggest that Uncle Sam ought to bribe women to have more babies. It has the whiff of something that chest-baring ultra-nationalist Vladimir Putin would do. More future patriots from Russian mothers for Mother Russia!

Most Americans would probably say nosy technocrats have no business trying to engineer some socially desirable family size, either bigger or smaller. And they would be right.

But what if Washington has already inadvertently instituted its own version of China’s awful one-child policy? After all, American families are having fewer children than they want. Surveys show a steady, four-decade preference for 2.6 kids. But today’s actual number is something more like 2.0.

Why the gap? Parents point to pocketbook issues. When asked by Gallup why they aren’t having more kids, 65 percent of respondents mentioned “not having enough money or the cost of raising a child.” Another 11 percent blamed the state of the economy or the paucity of jobs in the U.S. You can at least partially blame government for that, at least to the extent that bad policy slows economic growth and makes education and health care less affordable.

But there is another way government may hinder family formation. Considerable academic research suggests social insurance programs, such as Social Security and Medicare, reduce fertility rates in advanced economies. Thanks to these government-funded safety nets, parents have less incentive to produce kids to care for them in old age.

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Obama’s Economy Helps Democrats, Says Wasserman Schultz

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Photo Credit: AP / Carolyn Kaster

Photo Credit: AP / Carolyn Kaster

The Obama economy will help Democrats in the November election, Rep. Debbie Wasserman Schulz told reporters Wednesday.

“No question the economic issues are an advantage for Democrats,” Wasserman Schultz, head of the Democratic National Committee, said at a May 7 breakfast hosted by the Christian Science Monitor.

The GOP’s attempts to repeal Obamacare, and its support for the budget plan drafted by Rep. Paul Ryan, show “Republicans are focused on making sure a select few are able to do even better,” she said.

But she latter admitted that her constituents are unhappy with President Obama’s economy, even as she spun the admission to highlight Democrats’ spending plans. Voters, she said, “are asking about investing in education, focusing on continuing to create jobs, on making housing more affordable, the bread and butter kitchen table issues that will add to the confidence that Americans have that this economy is continuing to improve.”

“There is certainly room for improvement” in the economy, she acknowledged, as she downplayed a river of bad economic news about income, the middle-class, the widening wealth gap, more use of foreign workers, and the rising number of people who have lost hope for economic change.

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Obama’s America

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Photo Credit: Getty Images

Photo Credit: Getty Images

Welcome to Obama’s America, a place where 50 and 60-year-olds are moving back in with their parents in order to survive terrible, ongoing economic conditions. From the NYT:

Debbie Rohr lives with her husband and twin teenage sons in a well-tended three-bedroom home in Salinas.

The ranch-style house has a spacious kitchen that looks out on a yard filled with rosebushes. It’s a modest but comfortable house, the type that Rohr, 52, pictured for herself at this stage of life.

She just never imagined that it would be her childhood home, a return to a bedroom where she once hung posters of Olivia Newton-John and curled up with her beloved Mrs. Beasley doll.

Driven by economic necessity — Rohr has been chronically unemployed and her husband lost his job last year — she moved her family back home with her 77-year-old mother.

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Just When You Thought Obama Had Damaged The Economy Enough…

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Photo Credit: Western Journalism

Photo Credit: Western Journalism

In an op-ed for the Las Vegas Sun, President Obama gave his argument for supporting the proposed minimum wage increase, which would increase the federal minimum wage rate by nearly 40% from the current rate of $7.25/hr to $10.10/hr.

In the article, the President made claims that are false. According to him, a full-time employee making $7.25/hr would be living in poverty. By the federal government’s own poverty threshold, a single person household working 40 hours a week at minimum wage is making nearly 20% more than the poverty threshold.

Second is the effects that this would have on education. A teacher in Mississippi who graduated with a bachelor’s degree will be earning an insignificant 15% more than an unskilled employee working as a drive-thru clerk or Quik Stop cashier. With this law, there will be convicted rapists and even murderers (there are thousands of convicted rapists and murderers released from prison each year), many of whom have no skill at all, earning nearly as much as the people who educate our children. While it is true that most minimum-wage workers are not convicted felons, it is a fact, however unpleasant it may be, that a vast majority of them are unskilled workers.

What incentive is there for someone to go to college? The average bachelor’s degree costs a student over $30,000 and four years of their lives. The only way people are going to get out of poverty is to become a skilled worker rather than an unskilled one, and that is done through education, not minimum wage increases. This legislation removes the incentive to go to college. If all someone had to do to raise a family is flip burgers or wash dishes, those jobs would be in much higher demand. But there’s a reason employers don’t want to pay unskilled workers wages as high as skilled workers.

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Seven Devastating, Inescapable Economic Facts for America

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Photo Credit: Natural News

Photo Credit: Natural News

The stock market appears to be doing better and some companies are hiring again. Meanwhile, home prices have risen somewhat, banks are beginning to lend again and the jobless rate is the lowest it has been in about five years.

Things are finally looking up – right?

Um, not so much.

On the outside, the U.S. economy appears to be recovering from dramatic lows just a few years ago, when the country was navigating through one of its worst financial crises in history. But before you pop the cork on the champagne bottle and celebrate, there are seven things you need to understand about the real state of the economy that don’t bode well for our future, if they remain unchanged:

— Nearly 92 million Americans have dropped completely out of the workforce, and no, it’s not because an unusually large number of us are retiring. According to the Labor Department, the latest figures show that a record 91.8 million Americans are no longer in the labor force, which helps explain last month’s .3-percent drop in the unemployment rate (it wasn’t because hundreds of thousands of Americans found jobs). As reported by Breitbart News, “to be included in the Labor Department’s calculations for this statistic, a person must be 16 years or older, a civilian, not in an institution (such as prison), and someone who has not looked for a job in the last four weeks.”

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Joe Miller: These Two New Facts Should Give Everyone Pause

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Photo by Joshua Doubek

Photo by Joshua Doubek

This week we’ve already learned at least two facts that should give pause to anyone who cares about the liberty and prosperity of this country. First, an FBI investigation into the IRS scandal has so far determined there was no criminal wrongdoing and therefore no one should be held accountable. In other words, after investigating itself, the Obama Administration announced, “There is nothing to see here. Move along, Move along.”

This “investigation” was led by a political supporter of Barack Obama, who gave several thousand dollars to his campaign over both cycles. The probe, which reportedly did not even involve interviewing members from most of the targeted tea party and other conservative groups, found the IRS employees implicated were simply ignorant as to the rules. They did not have any particular political motive.

Really? I am not making any of this up.

The “investigation” cleared this atrocious abuse of government power by the IRS, which blatantly violated Americans constitutional rights to freedom of association and freedom of speech.

These are the kinds of unlawful or immoral actions we have come to expect from this Administration. Yet Senator Mark Begich has no intention of standing up for Alaskans’ constitutional rights or the cherished freedoms of all Americans. You only need look to the IRS scandal, the NSA surveillance scandal, the Associated Press wire-tapping scandal, or Benghazi.

Or how about the liberal Politifact’s number-one rated lie of 2013: “If you like your healthcare, you can keep your healthcare”? Senator Begich joined with President Obama in making that promise, yet thousands of Alaskans have seen their plans cancelled.

If you are tired of the lies, and the countless scandals with no one being held accountable, stand with me and help me remove Obama-enabler Senator Begich from office.

The second piece of news is that, for the first time in the history of Index of Economic Freedom published each year by the Heritage Foundation and the Wall Street Journal, the United States does not rank in the top ten nations. Denmark and Ireland moved ahead of the U.S., causing us to drop out of the top ten. We are now the only nation in the history of the index to fall for seven years in a row.

The United States has earned the dubious distinction of being only “mostly free” while other nations enjoy the ranking and benefits of being “free.” The main issues that caused America to lose its place include: new and onerous regulations, including ObamaCare; quantitative easing, where the fed prints money out of thin air; and out of control deficit spending.

If you agree it is time to begin restoring America to the “city on hill” she is meant to be, I need to hear from you today. We can’t win this effort without your help. One thing is for certain, Mark Begich and my Establishment primary opponents will not move America off the path that leads to continued decline.

Rest assured, I am committed to making the United States once again the beacon of freedom, both politically and economically, but I need your help today!

In Liberty,

Joe Miller, Candidate
United States Senate

Levin: Obama Is ‘an Economic Illiterate…Who Takes Responsibility for Nothing’ (+video)

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Photo Credit: markn3tel/flickr

Photo Credit: markn3tel/flickr

Discussing President Obama’s remarks in the White House Tuesday, Mark Levin called the president an “economic illiterate” during Tuesday evening’s radio show…

Levin: “So there’s Obama today, with about ten people behind him, which demonstrates what a failure he is, and what a failure his policies are. And, of course, they don’t even get the irony of the damn thing. And, he says among other things, cut one, go:

Obama: “But, although the economy has been growing, and we’ve been adding new jobs, the truth of the matter is, is that the financial crisis was so devastating that there’s still a lot of people who are struggling, and in fact, if we don’t provide unemployment insurance, it makes it harder for them to find a job.”

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