Why the Numbers Don’t Work

There is no question about it, President Obama is going to have to fight the toughest campaign he has ever had to fight in the coming months. There is a very big reason why. After nearly four years in office, our economic numbers just do not work. In 2008, the President said,



One ad that got a lot of air play and was specifically endorsed by the President, describes Gov. Romney as “out of touch”. It uses clips of Romney, deliberately out of context, in order to paint a false narrative.

Going much, much further, in probably the nastiest ad of this campaign season, Priorities USA Action, a PAC working to keep President Obama in office, insinuated that Romney was indirectly responsible for the death of a woman who developed cancer.

It is now known that the woman learned of her cancer 5 years after Bain shut down the company her husband worked at and 7 years after Romney left Bain to work on the Olympics. She also had coverage through her own employer after her husband lost his job. In that same article, after first denying any knowledge, Jen Psaki, a spokeswoman for the Obama campaign, acknowledged that the campaign was aware of this ad prior to its airing.

Throughout the Olympics and continuing on through today, virtually every ad I’ve seen has been an ad attacking the Republican candidate, now nominee, instead of providing a variation of the President’s unique and charismatic description of “Hope and Change” that was so inspiring in 2008. There is a reason why. This year’s slogan is a simple proclamation: “Forward”. “Forward” is uninspiring. It provides a direction without meaning. Right now, “Forward” is leading us into a debt-filled abyss. The numbers bear this out and there is no way around it.

Labor Force

If we look at the labor numbers over the last 30 years we see a defining trend, until recently. Every four years, from President Reagan’s first term, starting in January 1981, we saw an increase in our labor force, upwards of 4 million people. The two biggest gains were from January 1985 to January 1989, with 8.6 million people added to the labor force under Reagan and January 1997 to January 2001, with 8.3 million people added to the labor force under President Clinton. Incidentally, not only did we have a balanced budget during Clinton’s 2nd term, we had a surplus. Even in the years that followed the September 11th attacks, the labor force grew by over 4 million people. This is significant for two reasons. The first is that, obviously, with less workers in the workforce, there is, generally, less revenue for the government to operate. The second is that booms in the size of the labor force, generally, are consistent with a strong economy.

Our labor force is a big component, because it doesn’t just show how many people we could have working, it also shows how many people are not working, when compared against our total population. Our population estimate is approximately 314 million. Over half of our population is not in the labor force and, therefore, does not work, nor are they even counted in our labor numbers.

In the last 3 1/2 years, since Obama took office, our labor force has grown by only 777,000±. That is abysmal. Our population didn’t reduce in size. No, we actually grew by over 2 million people this last year … and the year before that … and the year before that. We’ve added over 6 million people to our population. Over 87& of our recent population growth are not in our labor force, contributing. If they’re not contributing, they are …


The labor force is obviously only one piece of the pie. The other piece is employment, which, conversely, gives us our unemployment rate. Our unemployment rate is currently 8.3%, down from 10% just two years ago. On the face of it, this looks like only good news. Looking deeper at it, as we will, shows this is not the case.  Part of the reason that the unemployment rate has gone down is due to the fact that we’ve been adding jobs from our lowest point in October 2009. Many Democrats have, until recently, proclaimed that there has been “25 Straight Months of Job Growth.” This is not correct. Looking at the labor numbers again, we can see we had job growth from October 2009 until June 2010 (7 months). We then had three months of growth before a month of decline in October 2010. Then 5 months of growth and then a decline. Then, one month of growth and a month of decline in June 2011. From there, there was 8 months of growth until a decline. That already puts us into 2012. Below, I’ve outlined the employment numbers with a decline in red to make it easier to see. Clearly “25 Straight Months of Job Growth” is a distortion.

The job growth we did have was anemic, at best. “Our economy needs to add at least 125,000 new jobs every month just to keep up with population growth.” In the 33 months since 2009, the economy added 3.819 Million jobs. That averages out to 115,700 jobs per month. So, why did our unemployment rate go down? The reason: our labor force. If the labor force had grown at its usual pace, we would be seeing unemployment closer to 10.1%. Additionally, from the numbers, you can see that in the last 3 1/2 years, we’ve had an effective job growth rate of only 33,000.  Just with straight jobs gains to population growth comparison, one can see that 99% of that population growth has no job. Interesting, isn’t it? No wonder the “99%” are upset.

Federal Budget

Our federal budget has been over $500 Billion (yes, that’s a “B”) more than the highest amount of the highly controversial spending of President Bush each and every single year since Obama took office. Worse than that, we have, for the past three years, spent over $1.2 Trillion (yes, that’s a “T”) more than we take in every Fiscal Year.

In 2008, then Senator Obama, had this to say about the spending under President Bush:

“The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up the national debt from 5 trillion for the first 42 presidents — number 43 added 4 trillion dollars by his lonesome, so that we now have 9 trillion dollars of debt that we are going to have to pay back — $30,000 for every man, woman and child. That’s irresponsible. It’s unpatriotic.”

The President’s answer, after being sworn in, and having both Houses of Congress under Democrat control for the first two years of his Presidency, was to double down on the already outrageous spending of his predecessor. After complaining about the amount of debt accumulated during the eight years President Bush was in office, President Obama did the same in less than four.


The President has suggested that raising taxes on the wealthiest Americans is the way to get this economy turned around. “Today, the richest 1 percent of Americans pay a top federal rate of 29 percent, according to Emmanuel Saez, an economist at the University of California, Berkeley.” Mr. Saez published a study that even the New York Times describes, modestly, as “not the mainstream view.” The Times goes on to say, “some economists really dislike them. And they are not absolutely airtight. The calculations rely on estimates about how higher tax rates would discourage the rich from working or investing over a couple of years at most. But we know little about how they might affect long-term decisions …” Even with Mr. Saez’ controversial conclusion of “raising the top tax rate on the top 1 percent of earners to 67 percent,” additional revenue would increase by about “$4 trillion over a decade.” The Times says, “that’s a start.” It is true, that is an incredible amount of money. It is also an average increase of $400 Billion each year, amounts to little more than 11% of our current federal budget and still requires us to borrow almost 70% of our current FY deficit. The President’s more modest proposal would raise half the amount Saez’ study proposes and would amount to less than 6% of our current federal budget and would require us to still borrow nearly 84% of our current FY deficit.

The President is going to have the toughest fight of his political career. This election is about jobs and the economy, like it was in 2008. Given the last 3 1/2 years, the information you’ve just read, and the fact that the President has decided to attack his opponent to paint him “as someone people should run from,” instead of meeting with his jobs council any time in the last six months, isn’t it about time that he take responsibility and realize that the reason he has this tough fight is because his policies have not worked. The numbers prove it.


About justincaselawgic

I could go into my background, but none of that really matters. I like to put out factual analysis, using multiple citations for the basis of the analysis. Dissent is expected and encouraged. Debate is expected and encouraged.
This entry was posted in Emmanuel Saez, Federal Budget, Gov. Mitt Romney, Labor Force, New York Times, President Obama, Tax Policy, Unemployment and tagged , , , , . Bookmark the permalink.

One Response to Why the Numbers Don’t Work

  1. Pingback: President Obama’s Speech to the DNC: What the President Said and Didn’t Say and Why | Empathy's Sword

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s