Skip to comments.Obama's Real Cost: $19 Trillion in Missing GDP
Posted on 01/26/2013 4:45:28 AM PST by Kaslin
There's a super storm raging over our economy that's been seeded and fueled by the federal government over a period of the past several decades. And it's literally costing the country trillions of dollars in GDP per year. Its not merely garden-variety government waste that's the problem either. It's monumental stupidity by the government, combined with venial cupidity by voters who think they can get others to pay for their free lunch.
This government-created storm has, more than any other factor, contributed to the fiscal crisis; a crisis that is creating more expansive government programs, robbing us of more GDP, thus ensuring the political class will take more actions that punish the most productive and dynamic elements of our society.
You know? The people who create economic growth?
In order to understand how this storm is being fed, you need only consult some official government figures. The labor participation rates released recently by the Bureau of Labor Statistics now stands at 63.6, near Carter-recession levels.
According to policy scholar and historian, Professor Richard Vedder of Ohio University, that means as many as 14 million of people are officially out of the labor pool. And the professor from Ohio says it's the government's own unemployment program that's helping to reduce the number of bodies willing to work.
If you give people money to not work, says Vedder, some people will say Gee thats a pretty good option. There have been a lot of studies over the years going back to the 1970s that show these programs on balance added a bit to the unemployment rate.
Because unemployment compensation has lasted so long, however, unemployment rates have gone up a couple of percentage points from where it would otherwise be.
Vedder's back-of-the-envelope calculations that he shared with me says that those missing workers could be costing the economy as much as $800 billion in GDP per year. Thats $2500 for every person, or $10,000 for every family in GDP he says.
But that's not all: Multiplied and compounded over 10 years, that's not $8 trillion missing from the economy, but rather $9 trillion.
If you want to know why we have an entitlement crisis, why some cities, like Detroit, can't afford to pay for basic services or why teacher pension plans have to cut back benefits, it's not because tax rates are too low, or spending has been cut to the bone. It's because politicians have made off with $9 trillion from our GDP. That's not just missing GDP, you see; it's missing payroll taxes, income taxes, sales taxes and teacher pension contributions.
While our political and cultural elite like to pretend that there is a settled science that supports the notion that government creates "revenue by Acts of Congress and the generosity of the Executive Office, once again they have it exactly backwards: All public revenues first start out as private money in the economy. When that money is missing from the private sector, it can never afterward make its way to the public sector.
Now here's the bad news: Labor participation rates, and the effect they have on GDP, are just long spring showers that someday will end compared to the storm created by the regulatory burden in the country. According to a report in 2011 by the Heritage Foundation, the government's own Small Business Administration estimates that compliance with various federal regulatory structures cost the economy another $1.75 trillion every year. And that's before we even account for the costs of Obamacare and Dodd-Frank financial "reform" - both of which appear to have higher price tags than originally touted.
While we will never have a regulation-free government- nor should we- it bears asking how long we can afford to pay 13 percent of our GDP to comply with federal mandates, over and above taxes that we pay to support basic services like the common defense.
Because doing my own back-of-the-envelope calculation says that by cutting regulatory costs to half of what they are currently means we can add another $9.8 trillion in GDP as well. If we combine that growth with policies that encourage employment, we can add $19 trillion to GDP over ten years.
$19 trillion could go very far toward righting our fiscal ship even as the fiscal storm continues.
Because the fiscal storm that we see happening in western, industrialized counties isn't just fiscal, it's also demographic. With aging populations and near zero internal birth rates, we can no longer rely, as we once did, on a riding tide of population to lift all boats in our economy.
We need to get back the private GDP that politicians today are so happily squandering through myriad government schemes like Sarbanes-Oxley or emergency unemployment benefits. Since its unrealistic to expect politicians to make meaningful cuts in government spending, we have to reduce the burden of government- over 40 percent of our GDP in 2013- by growing the private sector more rapidly.
Or we risk being swamped in the face of this man-caused, government sponsored super storm.
I was talking to a man the other day—an aquaintance, he got laid off from his job at the Naval base. I don’t know what his job was or what he was paid.
This guy is what I call a spaceman, smart real smart, but can barely tie his shoes.
He told me flat out that he would not work for under $100,000 dollars.
Not bad, I would work for that too.
The fact is he gets enough from unemployment that he doesn’t have to work, and that is the problem in the country today.
The federal statists and their media lap dogs are pushing their shop-worn “Recovery surges!” message at the beginning of 2013, just as they did in January 2012 and January 2011.
They hope to fool the people one more time, but by March, it becomes apparent that this is the usual smoke and mirrors and lies as the economy heads into its annual doldrums.
Rising taxes, dangerous deficits, obscene CommieCare costs, and a bulging population of Takers are not the elements of a strong economy.
The price tag for the Wall Street bailout is often put at $700 billionthe size of the Troubled Assets Relief Program. But TARP is just the best known program in an array of more than 30 overseen by Treasury Department and Federal Reserve that have paid out or put aside money to bail out financial firms and inject money into the markets.
To get a sense of the size of the real $14 trillion bailout, see our chart at web site. Below, a guide to the pieces of the puzzle:
Treasury Department bailout programs
(Remember that Obama's Treasury Dept was controlled by his then-COS Rahm Emanuel---a savvy, connected G/S lobbyist in the WH)
Money Market Mutual Fund: In September 2008, the Treasury announced that it would insure the holdings of publicly offered money market mutual funds. According to the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), these guarantees could have potentially cost the federal government more than $3 trillion [PDF].
Public-Private Investment Fund: This joint Treasury-Federal Reserve program bought toxic assets from banks and brokeragesas much as $5 billion of assets per firm. According to SIGTARP, the government's potential exposure from the PPIF is between $500 million and $1 trillion [PDF].
TARP: As part of the Troubled Asset Relief Program, the Treasury has made loans to or investments more than 750 banks and financial institutions. $650 billion has been paid out (not including HAMP; see below). As of December 21, 2009, $117.5 billion of that has been repaid.
Government-sponsored enterprise (GSE) stock purchase: The Treasury has bought $200 million in preferred stock from Fannie Mae and another $200 million from Freddie Mac [PDF] to show that they "will remain viable entities critical to the functioning of the housing and mortgage markets."
GSE mortgage-backed securities purchase: Under the Housing and Economic Recovery Act of 2008, the Treasury may buy mortgage-backed securities from Fannie Mae and Freddie Mac. According to SIGTARP, these purchases could cost as much as $314 billion ---SNIP---.
LONG READ---go to web site to read more and checkout the shocking financial charts.
Remember when Pres Obama bragged about Joe Bidens fiscal discipline cred in 2009? To you, hes Mr. Vice President, but around the White House, we call him the Sheriff, Obama warned government employees. Because if youre misusing taxpayer money, youll have to answer to him.
Fast-forward to 2012. Call in the search teams. Since being appointed the nations stimulus spending cop, Sheriff Joe has taken a permanent donut break. Hes AWOL on oversight. In fact, hes been bubble-wrapped, boxed and kept completely out of sight. The garrulous gaffe machine hasnt sat down for a national media interview in five months.
The Democrats trillion-dollar American Recovery and Reinvestment Act, however, keeps piling up waste, failure, fraud and debt. Who benefited most? Big govt cronies. (Excerpt) Read more at michellemalkin.com ...
POSTER COMMENTS It doesn't have to take years of investigations----this is easily disposed of w/ stim crooks nabbed easy as 1-2-3:
REFERENCE Under the Bank Secrecy Act passed by Congress, banks are required to establish, implement and maintain programs designed to detect and report suspicious activity indicative of money laundering, govt fraud and other financial crimes. The Bank Secrecy Act was enacted to protect the tax-paying public from harm by identifying and detecting money laundering from criminal enterprises, govt fraud, tax evasion and other unlawful activities, explained the special agent in charge for Internal Revenue Service Criminal Investigations.
We need to know the number and location of secret LLC bank accounts the stim crooks opened. How many wire transfers were facilitated? How much was secreted offshore?
THE PAPER TRAIL IS HUGE L/E should subpoena bank records of all stim recepients----demand to see copies of (1) checks, (2) wire transfers, (3) bank account statements, (4) invoices, (5) bills, (6) delivery tickets, (7) correspondence (e-mail, cell records), copies of employment contracts, salary agreements, records of payouts, and, (8) all other financial books/records.
L/E need should subpoena records WRT monies stim recepients paid to (a) brokers, sub-brokers, (b) family members, (c) mortgage brokers, (d) financial managers, and, (e) real estate agents, brokers, and developers.
L/E needs to scrutinize stim recepients' bank accounts for suspicious activites: (A) large deposits, (B) funds transferred from one account into another, (C) request for withdrawals.
HAPPILY EVER AFTER L/E can then sue banks of stim recepients if found to be covering up govt fraud.
Feds say they have 1900 cases of stim wrongdoing.....with that number about to explode. But, but.....Obama said at the stim bill signing at a special ceremony in Colorado that VP Biden would be in charge of "keeping track of every penny"
"Hi there, Americans. Obama put me in charge of the trillion dollar stimulus. My son and brother are gonna help me disperse the money. "
Offshore Fraudster had links to offshore fund run by VP's relatives
Reuters on Yahoo | 2/23/09 | BY Ajay Kamalakaran
(Reuters) A fund of offshore hedge funds run by two members of VP Joe Biden's family was marketed exclusively by offshore firms controlled by Texas financier Allen Stanford, charged by regulators with an $8 billion fraud, the Wall Street Journal said.
The Bidens $50 million fund was jointly branded between the Bidens' Paradigm Global Advisors LLC and the offshore Stanford Financial Group entity headquartered in Antigua, and was known as the Paradigm Stanford Capital Management Core Alternative Fund, the paper said. Stanford-related offshore companies marketed the Biden fund to investors and also invested about $2.7 million of their own money in the fund, the paper said, citing a lawyer for Paradigm.
Paradigm Global Advisors is owned through a holding company by the vice president Biden's son, Hunter, and Joe Biden's brother, James, according to the WSJ. Paradigm's attorney, Marc LoPresti, who represents Hunter Biden and James Biden, as well as Paradigm, told the paper he did not know which Stanford entity invested the roughly $2.7 million. (Excerpt) Read more at news.yahoo.com ...
NOTE A lawyer for Hunter Biden and James Biden told reporters the Bidens NEVER met or communicated with Stanford. (/snicker)
Stanford is in jail for 110 years---but the Bidens got off scot-free.
Major Banks, Governmental Officials and Their Comrade Capitalists Targets of Spire Law Group, LLPs Racketeering and Money Laundering Lawsuit Seeking Return of $43 Trillion to the United States Treasury
NEW YORK, Oct. 25, 2012 /PRNewswire/ Spire Law Group, LLPs national home owners lawsuit, pending in the venue where the Banksters control their $43 trillion racketeering scheme (New York) known as the largest money laundering and racketeering lawsuit in United States History and identifying $43 trillion of laundered money by the Banksters and their U.S. racketeering partners and joint venturers now pinpoints the identities of the key racketeering partners of the Banksters located in the highest offices of government and acting for their own self-interests.
In connection with the federal lawsuit now impending in the United States District
(for more go to the link.)
George Soros' group applauds that we now can pay over $5,000 to people this year who pay no Federal Income tax.
Isn't that great?
And we are making matters worse by importing 1.2 million LEGAL immigrants a year, most of whom are poor and uneducated. We are importing poverty. 57% of immigrant headed households with children are on welfare. Milton Friedman said that, "You cannot have mass immigrations simultaneously with the welfare state." We have both.
We are down the communism rat-hole and there is really no ‘peaceful resolution’ at this point. The Left had been working towards another civil war, all the tidbits point to this.
Pretend Obama wants the best for our Republic is not going to help anybody.
A mental disorder that dates back several thousand years and has brought down countless governments.
Thanks for posting that link about the real size of the bailout.
You’re very welcome.