Misery Index

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The Federal Budget

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Unemployment

The number of jobs needed per month to keep up with population growth depends on the rate of population growth, and the participation rate. We also have to be clear on the time frame we are discussing. The CBO report is through 2021, and the CBO is projecting the participation rate to fall to 63% by 2021 due to an aging population.

If, instead, we asked how many jobs are needed over the next year to keep the unemployment rate steady using the CBO projection of the participation rate, the answer is very different. The CBO is projecting the participation rate will be at 64.6% in 2012 and the current participation rate is 64.1%...

It would take 187,000 jobs added per month over the next year to hold the unemployment rate steady if the participation rate rises to 64.6%. If the participation rate stays steady, it will take 95,000 jobs added per month.

I also included the number of jobs needed to lower the unemployment rate by one percentage point to 8.2%. If the participation rate rises, then it would take 316,000 jobs per month. If the participation rate stays steady, it would take 224,000 jobs per month to lower the unemployment rate to 8.2%.

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It is a Spending Problem

In the debate about raising the debt ceiling, the reality is often lost that the top 10 percent of income earners—those making more than $113,799 in 2008 (the latest year available from the IRS)—already pay 69.9 percent of the income taxes. The same top 10 percent, however, earn only 45.8 percent of the income.

The IRS also reports that in 2008, the top 25 percent of income earners—those earning $67,280 or more—pay 86.34 percent of the income taxes, yet earn only 67.38 percent of all income in the U.S.

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Production

Technology and Standards of Living

June Unemployment 9.2%

The only good news is that June is over.

There were few jobs created in June (only 18,000 total and 57,000 private sector). The unemployment rate increased from 9.1% to 9.2%, and the participation rate declined to 64.1%. Note: This is the percentage of the working age population in the labor force.

The employment population ratio fell to 58.2%, matching the lowest level during the current employment recession.

U-6, an alternate measure of labor underutilization that includes part time workers and marginally attached workers, increased to 16.2%, the highest level this year.

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Gold Predictions

Higher than $10,000

1. Mike Maloney: $15,000
2. Howard Katz: $14,000
3. Silver-Coin-Investor.com: $7,000-$14,000
4. Jim Rickards: $4,000 – $11,000
5. Roland Watson: $10,800 (in our lifetime)

$5,001 – $10,000

1. Bob Kirtley: $10,000 (by 2011)
2. Arnold Bock: $10,000 (by 2012)
3. Porter Stansberry: $10,000 (by 2012)
4. Tom Fischer: $10,000
5. Shayne McGuire: $10,000
6. Eric Hommelberg: $10,000
7. Gerald Celente: $6,000 – $10,000
8. Peter Schiff: $5,000 – $10,000 (in 5 to 10 years)
9. Egon von Greyerz: $5,000 – $10,000
10. Patrick Kerr: $5,000 – $10,000 (by 2011)
11. Peter Millar: $5,000 – $10,000
12. Alf Field: $4,250 – $10,000
13. Peter George: $3,500 (by 2011-13); $10,000 (by 2015)
14. Jeff Nielson: $3,000 – $10,000
15. Dennis van Ek: $9,000 (by 2015)
16. James Turk: $8,000 (by 2015)
17. Joseph Russo: $7,000 – $8,000
18. David Petch: $6,000 – $$8,000
19. Michael Rozeff: $2,865 – $7,151
20. Martin Murenbeeld: $3,100 – $7,000
21. Dylan Grice: $6,300
22. Aubie Baltin: $6,000 (by 2017)
23. Murray Sabrin: $6,153
24. Harry Schultz: $6,000
25. Paul van Edeen: $6,000
26. Lawrence Hunt: $5,000 - $6,000 (by 2019)
27. Paul Brodsky/Lee Quaintance: $3,000 – $6,000

$5,000

1. David Rosenberg: $5,000
2. Martin Hutchinson: $5,000 (by end of 2010)
3. Doug Casey: $5,000
4. Peter Cooper: $5,000
5. Robert McEwen: $5,000
6. Martin Armstrong: $5,000 (by 2016)
7. Peter Krauth: $5,000
8. Tim Iacono: $5,000 (by 2017)
9. Christopher Wyke: $5,000
10. Frank Barbera: $5,000
11. John Lee: $5,000
12. Barry Dawes: $5,000

$2,500 – $5,000

1. Pierre Lassonde: $4,000 – $5,000;
2. Mary Anne and Pamela Aden: $3,000 – $5,000 (by February 2012)
3. Bob Chapman: $3,000 (by 2011)
4. Larry Edelson: $2300 – $5,000 (by 2012)
5. Luke Burgess: $2,000- – $5,000
6. Ian Gordon/Christopher Funston; $4,000
7. D.P. Baker: $3,000 – $3750
8. Christopher Wood: $3,500 (in 2010)
9. Adam Hamilton: $3,500 (by 2010-11)
10. Eric Roseman: $2,500 – $3,500 (by 2015)
11. John Henderson: $3,000+ (by 2015-17)
12. Hans Goetti: $3,000
13. Michael Yorba: $3,000
14. David Tice: $3,000 (by 2012)
15. David Urban; $3,000
16. Michael Lambert: $3,000
17. Brett Arends: $3,000
18. Ambrose Evans-Pritchard: $3,000
19. Trader Mark: $3,000 (by mid-2011)
20. John Williams: $3,000
21. Byron King: $3,000
22. ThumbCharts.com: $3,000
23. Ian McAvity: $2,500 – $3,000 (by 2012)
24. Jeff Nichols: $2,000 – $3,000
25. Graham French: $2,000 – $3,000
26. Sascha Opel: $2,500+
27. Rick Rule: $2,500 (by 2013)
28. Daniel Brebner: $2,500

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Keynesianism Diagnosed

Researchers funded by the National Institutes of Health have found evidence that a retrovirus that has been linked to schizophrenia and multiple sclerosis may also cause Keynesianism. The discovery raises hopes that a cure may be found for this economy-destroying disease.

“The breakthrough was realizing that schizophrenia and Keynesianism have many of the same symptoms,” said Dr. Charles Rivers of the Harvard School of Medicine. “For example, both conditions cause delusions. A schizophrenic may think that the CIA is trying to kill him, while many Keynesians believe that government spending stimulates the economy.”

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Stimulus Spending Equals More Debt, Not Economic Growth

Yet this was the recovery that was aided by the largest Keynesian-style big government “stimulus” since World War II. Since 2008, total federal “stimulus” has been $4.6 trillion, as shown in the chart. As a share of GDP, recent deficit spending has been far greater than during all other recessions since the war.

Biggest Keynesian Stimulus + Slowest Recovery = Time to Rethink Keynesian Theory.

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Inflation: 3.6%

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Cartoon: The Economy

Cartoon: Housing Market

Cartoon: Unemployment

Cartoon: Spending

Cartoon: Debt Ceiling

$2 Trillion in Spending Cuts

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Economic Freedom and Quality of Life

Federal Revenues and Spending

The CBO report and many centrist budget wonks focus more on the problem of rising federal debt than on rising spending. As a result, many wonks clamor for a “balanced” package of spending cuts and tax increases to solve our fiscal problems. But CBO projections show that the long-term debt problem is not a balanced one—it is caused by historic increases in spending, not shortages of revenues.

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GDP Growth

The obvious connection, as I’ve pointed out on many occasions, is that America is becoming a European-style welfare state and it is unavoidable that we will suffer from European-style economic malaise.

P.S. It should be noted that America’s anemic economic performance in recent years is not solely Obama’s fault. As the White House repeatedly points out, he inherited a downturn. That is completely accurate. My complaint, however, is that Obama promised hope and change but instead has exacerbated the big government policies of his predecessor.

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