Random Economic Thoughts For Friday

Economic bad news from a number of quarters today starting with the unemployment number going up to 9.1 percent. As expected, President Obama is getting all the blame for it. GOP front runner Mitt Romney says that the president is destroying our country and "we are only inches away from ceasing to be a free market economy." Here's why that is a load of shit. 

What I find amusing about all of this is these same people that are doing the blaming seem to forget that if he did more than he is doing then we would be slipping into a more centrally planned economy. There's not anything he can do about high gas prices or the tsunami in Japan, the two main reasons the job market is so weak, so why put the blame on him?

Simply put, people aren't spending money. Whether it's individuals or governments, no one is spending which means businesses aren't making money which means they aren't hiring. Public sector job losses are seeing the biggest hit with 28,000 job losses last month, the most since November of 2010. 18,000 of those jobs are in education.

The only good news out of all of this is that most economists think these are temporary setbacks. And I tend to look at reports like this with a grain of salt. These days, economic reports have the emotional balance of a 14 year old girl. One day, everything is amazing. The next, all is lost and we are drowning in a boiling pit of sewage.

Through all of this, we have the debt ceiling dithering. At this point, anything coming out of the mouths of the GOP is silly when you consider these 10 points.

1. Republican Leaders Agree U.S. Default Would Be a "Financial Disaster"
2. Ronald Reagan Tripled the National Debt
3. George W. Bush Doubled the National Debt
4. Republicans Voted Seven Times to Raise Debt Ceiling for President Bush
5. Federal Taxes Are Now at a 60 Year Low
6. Bush Tax Cuts Didn't Pay for Themselves or Spur "Job Creators"
7. Ryan Budget Delivers Another Tax Cut Windfall for Wealthy
8. Ryan Budget Will Require Raising Debt Ceiling - Repeatedly
9. Tax Cuts Drive the Next Decade of Debt
10. $3 Trillion Tab for Unfunded Wars Remains Unpaid

What about #5? Taxes are low and people still aren't spending their money. So the argument that taxes need to be cut more makes no sense. Corporate Taxes, as I demonstrated the other day, are in the negative in some cases. Yet they are still holding on to their cash. Why? Because of the evil gubmint? That makes no sense either. They have everything they want and no taxes.

Honestly, I'm not sure I have the answer. Part of it does have to do with the plutonomy we created but are people really that stupid to hoard cash when they know it will ultimately bring down the system they need to remain wealthy?

None of this makes any sense.