A Look Back To March 2010 - Same Problems & Solutions Needed

Following last Friday's DOL unemployment report Carol asked me to repeat the message entitled All You Need To Know About Creating Jobs – this original message of March 8, 2010 is based on a metaphor presented to me by Professor Carbaugh of Central Washington University.  I presented it @ the last several FairTax seminars I have given in NJ & it sticks in people's minds.

 

As background, the unemployment rate in September remained 9.1% meaning that 14 million people who were looking for work could not find it.  More importantly the labor underutilization rate (known as U-6) increased to 16.5% meaning that over 25 million people are now covered by this broader joblessness rate – consisting of the aforementioned 14 million people plus 9 million people who are underemployed (part time but wanting full time work – those working part time out of necessity rather than choice) & two & one half million people who have stopped looking for work.

 

The Washington Times recently reported that the top 1 percent of income earners pay roughly 40 percent of all federal income taxes - the top 5 percent pay some 70 percent.  Meanwhile, the bottom 50 percent of earners pay just 3 percent.  About 47 percent of American households pay no federal income tax at all.

 

According to the Tax Policy Center, the breakdown works like this: The bottom 20 percent pay -3.8 percent (that's minus 3.8). That means they actually get money from the federal government. The second 20 percent gets even more — they pay -4.3 percent. Thus, the bottom 40 percent not only pay nothing, they get cash back.

 

The middle quintile — that 40 to 60 percent zone, which has an average income of $44,000 — pays 3.9 percent of the total federal income-tax revenue. The fourth quintile, with incomes up to $102,000, pays 15.1 percent.

So, 80 percent of American taxpayers combine to pay 10.9 percent of federal income taxes, according to the TPC — about $1 in every $9 of income taxes paid.

Now to those pesky millionaires and billionaires. The highest 0.1 percent of all income-earners (not 1 percent, zero-point-one percent), pay 16.4 percent of all federal income taxes — $1 in every $6 paid. Thus, the top 0.1 percent pay more than the bottom 80 percent, even though that much larger group made more than six times what the tiny top group makes.

BO wants to target "millionaires and billionaires" (although there are only 235,000 of them out of over three hundred million people — and FYI, that's a lot less than there were before BO took office).

 

Want to solve the problems with the above listed unemployment & income tax paying disparities?  You can narrow the degree of income inequality & reinvigorate America's middle class – refresh your memory from a year & a half ago with the piece below.  The numbers may be a little different but both the problems & their solutions remain the same today. 

 

---All You Need To Know About Creating Jobs – March 8, 2010---

 

Due to the arithmetic involved the unemployment rate was unchanged @ 9.7% in February but the more substantive statistic in our jobloss recovery was that 36,000 more jobs were lost in the month. Many people are calling on BO & Congress to switch from working on Healthcare reform & start working on creating jobs. I am asking them to stop working on both & just get the hell out of the way.

 

The way to maximize the creation of value producing jobs that increases our standard of living is for the government to stop its constant intervention & interference in the economy & unleash entrepreneurs & innovators in a true free enterprise system - which is far from what we have had in a long time. BO's policies not only don't maximize the chance for creating such jobs, they don't even minimize it - they virtually eliminate the possibility of any such jobs being produced. And of course this is by design.

 

To understand how value producing jobs are created think of the world economy as a ladder - a metaphor recently presented to me by Professor Robert Carbaugh of Central Washington University. The U.S. is currently on the top rung & developing nations with low tech labor intensive jobs are on the bottom rungs. The other countries are in between. All countries try to climb to the next rung. This works well if the topmost countries create new industries & products, thus adding another rung to the ladder like when we replaced horse drawn carriages that used buggy whips with cars. Older industries can move overseas while new jobs are generated @ home. It is when innovation stalls @ the highest rung that the portion of Americans near the bottom of the income distribution must compete with workers in developing countries. This is what we are facing today as far too many Americans are poorly educated with skills so limited that no employer can use them. It is only through constant brainwashing that the government will take care of you that would allow someone to become so ill-prepared to support themselves that they are now competing with third world people who make pennies a day.

 

Now the government intervention & interference I referred to is not limited to America's government because there is really no such thing as a fair & level playing field in the global economy of international trade. Virtually every country in the world uses tariffs, quotas, quota licenses, tariff rate quotas, export quotas, domestic content requirements, subsidies, export subsidies, dumping - sporadic, predatory, & persistent, government procurement policies, & social regulations such as the average fuel economy standards of cars to protect their workers. Of course the workers needing the most protection are the lowest skilled least educated people. Accordingly, as politicians try to buy votes to get re-elected there is no free & unfettered trade - protectionism of the weak in one form or another reigns @ the expense of the American consumer.

 

All of this falls in line with BO's plans for completing the socialism of America & people's dependence on his government. By pretending to be concerned about American workers he can talk up any program he wants that in reality will not help but most Americans are too ignorant to realize what is happening to them or our country.

 

To BO his success as President depends on the very misunderstanding he claims & pretends to protect. His policies will lead to more stagnation, no value producing jobs, & certainly more government dependence that will reward those statists in power with an anti-American agenda that preys on the populist movement through class warfare & economic illiteracy.