Tag Archives: GDP

Commentary

First oil rig leaves USA for Egypt following Obama’s talk of drilling ban

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From the Houston Chronicle. (H/T Michelle Malkin)

Excerpt:

Diamond Offshore announced Friday that its Ocean Endeavor drilling rig will leave the Gulf of Mexico and move to Egyptian waters immediately — making it the first to abandon the United States in the wake of the BP oil spill and a ban on deep-water drilling.

And the Ocean Endeavor’s exodus probably won’t be the last, according to oil industry officials and Gulf Coast leaders who warn that other companies eager to find work for the now-idled rigs are considering moving them outside the U.S.

Devon Energy Corp. had been leasing the Endeavor to drill in the same region of the Gulf as BP’s leaking Macondo well, which has been gushing crude since a lethal blowout April 20.

But Diamond announced Friday it will lease the rig through June 30, 2011, to Cairo-based Burullus Gas Co., which plans to send the Endeavor to Egyptian waters immediately.

Devon is one of three companies that has cited the deep-water drilling ban in trying to ease out of contracts to lease Diamond rigs. Diamond, a drilling company, said it expects to make about $100 million from the deal, including a $31 million early termination fee it recovered from Devon.

Larry Dickerson, CEO of Houston-based Diamond, signaled that other of his company’s rigs could be relocated, too.

“As a result of the uncertainties surrounding the offshore drilling moratorium, we are actively seeking international opportunities to keep our rigs fully employed,” Dickerson said. “We greatly regret the loss of U.S. jobs that will result from this rig relocation.”

I went to sleep in the USA and I woke up in communist Venezuela.

You bash corporations, you lose jobs. Do you know what causes outsourcing of jobs? Attacking businesses with tariffs, regulations, lawsuits, and taxes. Environmental regulations, labor regulations, etc. That’s what causes outsourcing of jobs. If you want businesses to start here, to stay here and to move here from abroad, you create a business climate with low taxes, minimal regulations, and no unions. We should be drilling in ANWAR and building nuclear power plants, not kicking out oil rigs. We needed those jobs.

What about Obamacare?

From Investors Business Daily.

Excerpt:

“Independent experts have found that the new health law will increase the cost of health insurance and health care services,” the two doctor-senators say, noting the Congressional Budget Office concludes that “premiums for millions of American families in 2016 will be 10%-13% higher than they otherwise would be. This represents a $2,100 increase per family, compared with the status quo.”

Two thousand dollars more? Did something hidden in the 3,000 pages of the ObamaCare bill, which the White House and leading congressional Democrats moved heaven and earth to get passed, make those evil health insurers even greedier?

Or is it greedy Uncle Sam? As the senators point out, “According to an April 2010 memo from the Actuary of the Centers for Medicare and Medicaid Services, the medical device and pharmaceutical drug fees and the health insurance excise tax will generally be passed through to health consumers in the form of higher drug and device prices and higher insurance premiums, with an associated increase in overall national health expenditures.”

Add to that the fact that according to the Joint Committee on Taxation, much of ObamaCare’s new taxes will trickle down and end up being paid for by health care consumers. These include “the $60 billion tax on health plans, the $20 billion tax on medical devices and the $27 billion tax on prescription drugs.” Makes you wonder which party is on the side of the little guy.

Perhaps Obama was hoping that the businesses he is taxing would take the blame for the increases in premiums. That might have flown in the days before the Internet, but it doesn’t fly today. But it gets worse – much worse.

What about deficit-spending?

More from Investors Business Daily.

Excerpt:

Based on current estimates, today’s total federal debt of just over $13 trillion will hit $20 trillion by 2020. Beyond that, the coming retirement tidal wave of 65 million baby boomers will push Social Security and Medicare spending to stratospheric levels. America’s debts will become crippling.

By some estimates, total U.S. commitments for entitlements total $107 trillion over the next 75 years or so. That’s an unpaid tax bill of $912,000 per household, or $351,000 for each child born today.

[…]Today, the federal government alone is spending around 25% of GDP, compared with its long-term average of 18%. If expected massive deficits are closed with taxes rather than spending cuts, it will require a 25%-plus increase in the real size of government.

That won’t be the end of it. Absent serious spending cuts, spending will rise to 32% of GDP by 2030, Congressional Budget Office data show. At current levels, taxes on Americans would have to rise 78% to pay for all that spending. Ready for that?

By the way, when state and local spending are added in, government in a few short years will take up more than half of all U.S. GDP. In short, the U.S. is essentially on the road to becoming just another stagnant, state-run welfare economy.

Suppose you were a young man with a decent salary. Should you make the decision to get married and have children? Children who will owe hundreds of thousands of dollars because Obama had to buy votes using taxpayer money? I guess Democrats don’t want to be bothered with love, marriage and parenting. I guess Democrats just want a check from the government.

Commentary

How Democrat policies cause unemployment to increase

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Consider this article from the Washington Post. (H/T Belmont Club via ECM)

How Democrats prevent job creation

Most of the article talks about how Obama’s temporary hand-outs will not create any lasting jobs – they’ll simply go away as soon as the government stops taking money from the private sector to pay for these public works projects. But then the article talks about free trade and how free trade creates jobs. Is Obama in favor of free trade?

Excerpt:

More promising is the president’s call for a renewed national emphasis on exports, which currently support about 10 million jobs in the United States. It’s a sound concept, especially at a time when the weak dollar improves this country’s global competitiveness. But the goal he set in his State of the Union address — doubling exports to $3 trillion per year over the next half-decade — is unreachable via the laudable but modest policies that he has been willing to embrace so far, such as greater trade promotion efforts and relaxed controls on national security-related export controls. Though he called for “strengthened” trade relations with South Korea, Panama and Colombia, he did not challenge Congress to approve pending free-trade agreements with those three countries. That would require defying labor unions and other interest groups in his party. But it would create hundreds of thousands of jobs.

Free trade creates jobs by allowing our businesses to buy cheaper materials from abroad, and to sell their products into foreign markets. Consumers also benefit by being able to buy cheaper foreign goods, which allows them to save, invest or buy other things.

The only people who suffer are labor unions, who are paid salaries and benefits far in excess of what their skills really warrant. For example, a unionized GM auto worker in Detroit may be paid $70/hour in salary and benefits, while a non-unionized Honda auto worker in Ohio may be paid $40/hour. Unfortunately, these unions play a big role in getting Democrats elected, sometimes by using violence, etc., to get their man elected.

How Democrats cause jobs to be shipped overseas

Here is the latest from the Heritage Foundation. (dated 01/12/10)

Excerpt:

According to an Associated Press analysis reviewed by independent economists at five universities, the $20 billion spent nationwide on infrastructure so far “has had no effect on local unemployment rates.” And this was just the most recent embarrassing headline for the White House’s signature economic policy. Since the first reporting deadline in October, newspapers and other media outlets across the country have identified 94,341 fake jobs reported by the Obama administration as jobs “created or saved” by the stimulus. After the Government Accountability Office issued a report finding “significant reporting and processing problems that need to be addressed,” Obama administration spokesman Ed Pound offered this defense of the Obama administration’s jobs numbers: “Who knows, man, who really knows.”

Now Office of Management and Budget Director Peter Orszag issued a little-noticed memo last month ending the “saved or created” metric and instead directing agencies to count only jobs “funded” by stimulus dollars. But as Harvard University labor economist Lawrence Katz tells ProPublica, this is not really an improvement: “I just think it’s a silly exercise.” Instead Katz says a more accurate way to account for the effect of the stimulus is to look at the unemployment numbers put out by the Bureau of Labor Statistics.

That is a great idea. The latest BLS report issued last Friday found that the U.S. economy dropped 85,000 jobs in December, bringing the jobs lost total to 2.7 million since the stimulus was passed and 3.4 million since Obama became President. In contrast, the President’s White House Council of Economic Advisers had promised total employment of at least 138.6 million by 2010. Actual employment as of December was reported to be 130.9 million, leaving the Obama jobs deficit at 7.7 million.

The problem with infrastructure spending as stimulus, and really government spending as stimulus, is that Congress does not have a vault of money waiting to be distributed. Every dollar Congress injects into the economy must first be taxed or borrowed out of the economy. No new spending power is created. It is merely redistributed from one group of people to another. Businesses are telling pollsters that among the biggest reasons they are not creating jobs is the prospect of new tax and regulatory burdens. A better solution to reduce unemployment is to simplify and reduce the barriers to business success.

The problem is that Obama is associated with special interests who are hostile to business, like unions, trial lawyers, and environmentalists, so he won’t do what needs to be done. Whenever Democrats tax, regulate, intimidate, and demonize business, they cause unemployment to increase. Fancy that. All this complaining by Democrats about “greedy corporations” and “global warming” cost you your job.

Obama promised that his policies would create jobs, but his policies failed. He predicted that his policies would work, but they did not work. He prescribed pixie dust to fix the economy, and it failed. He failed. And his only response to his failure is to blame his predecessor who embraced tax cuts and free trade, and presided over a 5.2% average unemployment rate over 8 years. George W. Bush didn’t attack businesses, and we all had jobs. Remember that?

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News

Does 5.7% GDP growth help to alleviate the 17% effective unemployment rate?

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Consider this article from Bloomberg News. (H/T ECM)

Excerpt:

New York University Professor Nouriel Roubini, who anticipated the financial crisis, called the fourth quarter surge in U.S. economic growth “very dismal and poor” because it relied on temporary factors.

Roubini said more than half of the 5.7 percent expansion reported yesterday by the government was related to a replenishing of inventories and that consumption depended on monetary and fiscal stimulus. As these forces ebb, growth will slow to just 1.5 percent in the second half of 2010, he said.

Investors Business Daily explains:

So let’s deconstruct that 5.7% a bit. For one thing, most of the gain — nearly two-thirds, in fact — was a result of an end to the panicked inventory liquidation that took place at U.S. firms last year. Remove that, and a different picture emerges — a 2.2% rise in GDP.

Most economists agree that GDP growth of 3% or so is needed to boost employment. That may in part explain why GDP could grow 2.2% in the third quarter and 5.7% in the fourth quarter, while businesses slashed 735,000 jobs over the same six months.

More meaningful is year-over-year growth. By that measure, we barely grew — real GDP rose just 0.1% in the fourth quarter from last year, virtually flat. Worse, real nonresidential fixed investment — a proxy for business investment in future output — plunged 14.6% from last year. That’s a shocking vote of “no confidence” in Obamanomics by America’s entrepreneurs and businesses.

We wish that was all, but it isn’t. According to the Labor Department, wages and benefits rose in 2009 by just 1.5%, the smallest rise in history. Meanwhile, weekly earnings for nonmanagement workers fell 1.6% last year, the worst since the 1991 recession.

These subpar numbers only underscore the weakness of our job market. In just two years, we’ve destroyed almost 8 million jobs and watched as the unemployment rate surged to 10%.

One quarter of growth isn’t going to change anything – we still have 10% unemployment, which is actually 17% when you consider the people who are no longer actively looking for work. Obamanomics wrecked the economy, starting in late 2006 when the Democrats got control of the House.