The New Normal

We are awaiting the May jobs report numbers but is there something of greater concern of which we should discuss.  The current forecasts are estimating a May jobs growth number somewhere around 200,000. Of course it will be touted as a positive – and we all want to see Americans getting back to work. However, this number is falling short of the 300,000 monthly average of late last year and well below a sustained number required for an economy of our size.  As a matter of fact, a comparison of monthly jobs numbers between the Reagan and Obama administrations are quite telling. It is believed the U.S. unemployment rate will remain at 5.4 percent. Sadly, that number does not account for the almost 93 million Americans who are without work and not actively seeking employment – effectively they are dropped from consideration.  If they were included – as they should be – our actual unemployment rate would be nearing 12 percent.

Recently we learned of the first quarter, 2015 GDP number being revised to -0.7 percent; again, a comparison with the Reagan administration GDP numbers is telling. The average GDP growth number for the Obama administration is just under 2 percent.

Are we accepting a new normal in our economic policies to mask their failure? America can print money and artificially maintain low interest rates for only so long. This “new normal” is a dangerous façade that could lead to an even deadlier fiscal crisis than the one we experienced in 2008. It is imperative that America restores an “opportunity economy” that is based upon real jobs and GDP growth emanating from the investment, ingenuity, and innovation of the indomitable American entrepreneurial spirit – free enterprise, private sector and not the public sector. We cannot tax ourselves into economic growth.

 

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