As the New Year begins, government’s policies are still failing us

Commentary by James Shott

As the economic non-recovery crawls into 2014, the “good news” on the jobs front – that the unemployment rate dropped .3 percent in December to 6.7 percent – is far less impressive when you look beneath the surface.

The reason the unemployment rate dropped was not that a strengthening economy produced a sharply higher number of new jobs, as should be expected in a true recovery. December showed only a puny 74,000 new payroll jobs were added. Data from the Bureau of Labor Statistics (BLS) indicates that the drop resulted because five times that many people – 374,000 – became discouraged that they couldn’t find work and dropped out of the labor force.

Adding even a small number like 74,000 to a smaller labor force misleads us into thinking things have improved.

The BLS identifies June of 2009 as the official end of the recession, at which time the labor force participation rate was 65.7 percent (162 million workers). At the end of December, the rate stood at a pitiful 62.8 percent (155 million workers).

Using the size of the labor force in 2009 and the adding back into the equation the 7 million who have dropped out, the unemployment rate is just under 11 percent.

We should not celebrate a drop in the unemployment rate to 6.7 percent when 7 million Americans have given up looking for work because the economy still has not produced jobs for them.

Hopefully, the New Year will bring an infection of fiscal responsibility to our national leaders. It is interesting how liberals see global warming/climate change – a widely popular but unproven theory – as a true crisis, but don’t see years of budget deficits near and above a trillion dollars, and a national debt of nearly $17 trillion, as a problem.

President Barack Obama’s first year in office, 2009, saw a deficit of $1.4 trillion, which gets credited to George W. Bush, but contained the contribution of nearly $200 billion from the Obama stimulus. But over the next four years Mr. Obama racked up more than $4.2 trillion in deficits – FY 2010: $1,294 billion; FY 2011: $1,300 billion; FY 2012: $1,087 billion; FY 2013: $680 billion. This fiscal year the projection is a deficit of $744 billion, and the FY2015 deficit is projected at $577 billion.

To help put this in perspective, The Weekly Standard noted back in November of 2012 that, “According to the White House OMB, we ran up $1.8 trillion in real (inflation-adjusted) deficit spending during fiscal years 1942-45,” and that “we’ve now run up $3.4 trillion in real (inflation-adjusted) deficit spending under Obama — in less time than it took us to fight World War II.”

If there is good news in Obama deficit numbers it is that the deficits are coming down, but real good news would be Congress and the president taking concrete steps to get spending under control.

That seems unlikely, given Rep. Nancy Pelosi’s (D-CA) opinion that “The cupboard is bare. There’s no more cuts to make,” a position gleefully adopted by most, if not all, Congressional Democrats.

In her view there is no waste, fraud or abuse, despite more than ample evidence to the contrary, and there’s no unnecessary spending, either.

Senator Tom Coburn (R-OK) issues an annual report on government waste, and in “Wastebook 2013,” he lists 100 examples totaling $30 billion. Heaven only knows the total of all the wasteful spending of the federal government.

* The military has destroyed more than 170 million pounds of useable vehicles and other military equipment, approximately 20 percent of the total U.S. war material in Afghanistan, totaling $7 billion, rather than sell it or ship it home.

* The SuperStop is a $1 million bus stop complete with heated benches and sidewalks, and wireless zones for personal computers. Yet its roof doesn’t protect from the rain, snow, wind or blazing sun.

* One of NASA’s next research missions won’t be exploring an alien planet or distant galaxy. Instead, it is spending $3 million to go to Washington, D.C. and study one of the greatest mysteries in the universe — how Congress works.

* When officials at the Manchester Boston Regional Airport in New Hampshire installed new solar panels costing $3.5 million, they did not anticipate one quarter of them would not be used 18 months later because the reflection from the panels blinds pilots and controllers.

* The Treasury Department’s Inspector General for Tax Administration discovered the IRS paid up to $13.6 billion in false Earned Income Tax Credits in 2012.

* While millions of Americans continue to pay taxes on their hard earned wages, many federal employees are tax cheats, to the tune of $3.6 billion.

* The feds keep the lights on in empty and little used federal buildings, costing $1.5 billion.

* Out of the $33.5 billion in Pell Grants the federal government doled out last year, individuals posing as students took off with $1.2 billion.

When an elected public servant believes there can be no spending cuts in the face of such wanton waste, it speaks volumes about the integrity and motivation of that individual.

Federal spending is a giant problem that we had better address soon.

Cross-posted from Observations