Tuesday, February 19, 2013

Four Years Under Obama, a Graphic View

In 2008 Obama was elected president by a 10 million vote margin. He came into office promising to not only stop the economic collapse but reverse it, end the wars, lower taxes and energy prices, protect the environment and generally save our nations future. Then, despite having a negative approval rating as well as the vast majority of the people thinking the country was on the wrong track he was re-elected again in 2012 by only 51.1%, with a winning vote margin of less than half that of 2008.

When I looked at every economic metric prior to the 2012 election it looked as though Obama would easily lose, after all in terms of real numbers the country was no better off and in some cases was worse off than in 2008. But, he was elected. I'd like you take a look at these charts which cover everything from gas prices to deficits to military spending to gold prices.

The last 4 years have not been good and there is no reason to expect the next 4 will be better as a result of his policies. If things do recover it will be in spite of his actions, not because of them.

This first chart comes from Real Clear Politics and shows that American's have thought the country was on the wrong track in 2009 and continues to be on the wrong track.
(click images to view larger)

Next, let us look at the U6 unemployment rate. This shows that the U6 rate is 0.2% higher today than it was when Obama took office. Effectively, the unemployment rate hasn't budged and in terms of real numbers the Obama administration has been flat out lying.

Each month hundreds of thousands of people enter the work-force for the first time so even if Obama "saved or added" 4 million "new" jobs in 3 years the unemployment rate would not move and may even rise simply because the level of job creation doesn't even meet population growth.

This next graph comes straight from the Bureau of Labor Statistics. It shows the labor participation rate which is defined as the percentage of eligible workers aged 16 and above who are currently employed. As you can see the percentage of people working has dropped continually.

The next series of graphs will focus on government spending.

Here we have the amount of revenue the government has received each year in the form of income taxes, social security taxes, tariffs, fees and so forth. You'll notice a marked increase between 2010-11 and a continual rise expected through 2017. If you look at the projections you'll see that revenue jumps from $2.4 trillion in 2012 to nearly $4 trillion in 2017. That is among the fastest jump in history over a 5 year period outside of wartime and is based on new taxes from Obama's policies. This comes from the Tax Policy Center. 

This shows the deficit year-over-year. While the amount of deficit each year tends to fall we have still spent between $800 billion to over $1 trillion each and every year more than the government brings in.

It's a well known fact that ALL of the supposed cuts proposed by both parties are not real cuts but rather, cuts in proposed spending increases. When ever Obama talks about cutting spending or saving money he's talking about using a slight-of-hand "fuzzy math" trick. You see, each year the government gets an automatic spending increase based on a number of factors and when people talk about cutting or saving they're talking about having a smaller increase, not a real cut to a spending level lower than the previous year.

The more government spends the less the private sector has and thus the less you have. Taking money from you to spend on failed billion dollar solar programs, trillion dollar wars and even the estimated $1 billion spent solely on Secret Service protection will not save the economy, it hurts it. All of the rhetoric coming from Obama such as "if we cut spending you'll put people out of jobs" is nothing but fear mongering. Yes, some in government or in companies propped up by government (which mean they'll always be a drain) might lose their jobs but businesses will have more money to spend to expand and hire and those government employees will be able to find a private job where they actually do something. When WWII ended people screamed and worried that if the government cut spending millions of people who had been employed for the war would go without work, food or shelter. When the government finally cut spending, all of those government employees found private work and our economy took off faster than in any other time.

Here is a graph showing the amount spent on defense. Obama promised an end to constant warfare and to use that "saved" money to fix the economy and put it back into the hands of everyday people. Obviously, he forgot to keep that promise.

Next we have the debt. Everyone knows we're in debt and the debt is rising. Unfortunately few in Congress want to actually fix it. In 2008 Obama promised to cut the debt by trillions, instead he now claims that even cutting government spending by $85 billion this year (less than 3%) would be devastating.

Once again, you can see the rate of increase is much faster than in the past and between 2008-2013 increases by nearly 80%.

Just as anyone with a credit card must pay interest on their debt so must the government pay interest on the debt.

Each year we spend at least $200 billion on interest payments. That is more than twice the amount the government spends on education each year. If Obama really cared about education he would cut our debt so we could use the savings in interest payments on education. Not that spending more on education increases the actual education or testing scores of children (as I pointed out in a previous post) but it does show you where Obama's priorities are.

The final government related graph comes from the Heritage Foundation and it shows the tax rate as a percentage of GDP from 1975 to 2055. If you look at the mid point of the graph you'll see a huge increase in the tax rate. That time period corresponds to the Obama administration.

I guess Obama wasn't serious when he said he'd cut the overall tax rate, make the tax code simpler and not raise taxes on average Americans. Let's not forget the $80 a month or more you're probably missing each month from taxes you didn't have to pay this time last year.

Now I'd like to focus on general economic factors like the dollar index, precious metal prices and gas prices.

 The US Dollar Index is a way to measure the strength and stability of the dollar. When it drops, the dollar is weaker and when it rises the dollar is stronger. The entire purpose of the Federal Reserve is to provide a stable dollar and stable prices and Obama won the election by promising the strengthen our economy.

Does that look stable to you? Not only is the dollar unstable the Index is actually lower today than in 2009.

Of course there are other factors that lead to higher prices but there's no getting around the simple fact that a weak dollar means higher prices.

Here is a graph showing the national average price of gas. From GasBuddy.com

In Feb. 2009 the price of gas was about $1.90/gal, today it's pushing $4/gal.

This shows the price of silver from 2000 to today.

You can easily see the jump in prices since Obama has been in office. This might be good news to those who invest in precious metals but it's a bad sign for the overall economy.

And finally, the price of gold.

By any measure the last 4 years have not been good. We may be stuck with Obama for the next 4 years but we do have a chance to grab a hold of the Senate and place more people in the House who truly understand that more government is not the answer. This post has been focused on Obama but the truth is these problems have roots in both the Democrat and Republican parties.

Let us make sure that 4 years from now we're not looking back on a country that completely fell off the cliff when we knew beyond any doubt that the only answer is smaller government, free markets and a more constitutional approach to all things domestic and international.

--Jacob Bogle