Economic Myths (Jan 2012 Update)


Economic Myths (January 2012 Update)

We must address common 7 myths I have come to encounter in the press and blogs:

1. “President Obama’s policies have created more jobs in 2 years than Bush created in 8”: Go to bls.gov web site and you will find that after 2001 recession ended, from 2003 – 2007, the economy created 7.8 million new jobs and the unemployment rate fell from over 6% to 4.4%. From 01/2001 – 11/2007 number of jobs increased from 136,181,000 to 147,118,000 or peak net gain of 10,937,000. Per recession starting Dec 2007, mainly due to government interference in housing market, employment dropped to 140,436,000 in 01/2009 or an 8 year net gain of 4,255,000 for Bush. With recession technically over in June 2009 employment was 140,826,000. In 30 months since, BO’s watch, employment has only increased by only 244,000 to 141,070. All numbers are not seasonally adjusted. Reference : http://data.bls.gov/pdq/SurveyOutputServlet

2. GOP does not want to help jobless: GOP supports KeyStone pipeline, drilling in Gulf, shale, and environmentally safe fracking. BO is against all. Explain this: BO directed export import bank to provide US taxpayer $ as loan to Brazil so they can drill where BO forbids US companies to drill. Can anyone justify BO here? BO publically stated that he wants US to be Brazil’s best customer. What about US energy corporations that hire US workers?

3. Stimulus created jobs: $800 billion stimulus promise was that majority would go to private sector. Most private jobs become self sustaining and create ancillary jobs. Instead 80% of stimulus went to public union jobs rewarding them for 2008 election. Most of these jobs do not self sustain themselves as most create little if any economic growth or new tax revenues. Most jobs created by stimulus are gone or fading and significantly added to our total debt.

4. BO latest ‘jobs’ plan will create jobs: See #3 above for reason why plan will not

5. GOP wants to depress the economy: No – GOP wants to stop economic destruction that socialist leaning policies create. Reference – Europe

6. GOP forced domestic budget cuts: Since when is a decrease in planned increases, but still an increase, a cut?

7. GOP forced Congress to 2 month payroll tax cut, not 12: No. GOP aimed for 12 months with real cuts to play for the tax cuts.

An inconvenient truth for the socialist leaning is what occurs with long term tax cuts (Bush 2001 and 03, and Reagan 1981) – they tend to increase Treasury revenues and grow the economy. Facts from Treasury Dept:

1. Total federal revenues under Bush soared by nearly 30%, from $1.991 trillion in 2001 to $2.568 in 2007.

2. 30 months after end of 2008-09 recession (June 2009) US GDP is only 0.04% greater that peak before recession. 30 months after 1981-82 Recession, GDP surged by 12%. Major reason: Reagan stimulated private sector; BO public. We all desire stronger economic growth. Contact BO and Democrats and Republicans in Congress to implement pro private economic initiatives, starting with “shovel ready” energy projects.

Still unconvinced, blog on-line. I have plethora of more evidence.

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About economics501

1 - free market Capitalist; 2 - Fitness Entrepreneur; 56 years old, VP at an Investment Bank in NYC, ex Venture Capitalist, happily married with 2 girls. Education: Rutgers and NYU. I allow Ted Hruzd, my friend to blog at will here. He has many posts here. I have known Ted since we were both students at NYU. Ted also works for an Investment Bank as a VP in Equity Global Markets. ------------------------- I was very very Socialist leaning as a 22 year old. I then strongly believed in Gov role in helping the poor. However, as a USDA Child Nutrition Programs, I personally accounted for millions of fraud, abuse, and waste of tax payer money. I came to believe that the poor would be best served with less Gov programs and more with direct aid via tax system. Then after 5 years I became a free market capitalist, was a venture capitalist in 2007 and helped start 2 high tech companies. I dedicate this site to champion free market capitalism as the best road to Prosperity. Please join in. If you disagree, fine, but please post with dignity and class and be civil. Argue with facts always.
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