By Patricia L Johnson and Richard E Walrath

The $150 billion dollar economic growth package was announced by President Bush on January 24, 2008 after a bipartisan agreement was reached with the leaders of the U.S. House of Representatives.  The plan consists of $100 billion in temporary relief for families, and $50 billion in business incentives.

The plan calls for taxpayers to receive rebates of "up to" $600 for individuals, and "up to" $1,200 for couples.  Anyone eligible for the above, would also be eligible for an additional $300 per child, which sort of gives you the impression that if you're married and have two kids you're about to receive "up to" $1,800 from Uncle Sam.

Don't rush out and spend the money yet!

Whenever this administration uses the words "up to" you can bet your booties you're going to get less, so how much less?  Department of the Treasury examples follow:

Married with children:

1) Married couple with two children*, earned income of $4,000, no federal income tax paid.

Individual rebate = $600

Child tax credit = $600

TOTAL = $1,200

2) Married couple with two children, earned income in excess of $3,000, AGI = $45,000, federal income tax is $323.

Individual rebate = $600

Child tax credit = $600

TOTAL = $1,200

3) Married couple with two children, AGI = $48,000, federal income tax is $773.

Individual rebate = $773

Child tax credit = $600

TOTAL = $1,373

4) Married couple with two children, AGI = $80,000, federal income tax paid in excess of $1,200.

Individual rebate = $1,200

Child tax credit = $600

TOTAL = $1,800

5) Married couple with two children, AGI = $160,000, federal income tax paid in excess of $1,200.

Individual rebate = $1,200

Child tax credit = $600

Phaseout reduction = ($500) [5% x ($160,000 - $150,000) = $500]

TOTAL = $1,300

*All children referenced in the examples are qualifying children for purposes of the child tax credit.

Looks like you won't be pulling in $1,800 unless your adjusted gross income is more than $80,000 and you have paid in more than $1,200 in federal income tax.

The current agreement also provides a temporary tax cut for businesses providing them with the opportunity to purchase equipment this year and deduct an additional 50% of the cost in 2008.

Treasury Secretary Paulson says that he hopes the Senate doesn't meddle with the stimulus package.  He's afraid that the Senate might put some stimulus into it--like money for food stamps as well as extended unemployment compensation.

The package does not provide assistance in the form of extended unemployment insurance benefits, food stamp money, or spending on infrastructure, but it does provide some assistance for homeowners who are struggling to keep their homes in the current mortgage crisis. 

Will it be enough?

Of course not!

How much worse are economic conditions today than they were when the first Bush tax-cuts went into effect? 

Is there anyone who would disagree that they are much worse today than they were then?

So, why are we talking about a $150 billion stimulus, maybe, when hundreds of billions in tax-cuts were put into effect then?  Granted, most of those Bush tax cuts went to the rich and business, and we see how much benefit they provided to the economy. 

The purpose of the Jobs and Growth Plan of 2003 was to stimulate the economy with the influx of $350 billion dollars.  On a temporary basis it succeeded in providing some stimulus, but in 2003 we weren't looking at 1.8 million subprime loans getting ready to reset with higher rates over the next two years.

If the situation is far worse today--as it is--how is $150 billion going to solve the problem?

By:  Author and Photographer Unknown

Lessons on Life

There was an Indian Chief who had four sons. He wanted his sons to learn not to judge things too quickly. So he sent them each on a quest.., in turn.., to go and look at a pear tree that was a great distance away.

 The first son went in the Winter, the second in the Spring, the third in Summer and the youngest son in the Fall. 
When they had all gone and come back, he called them together to describe what they had seen.

 The first son said that the tree was ugly, bent, and twisted.
The second son said "no" it was covered with green buds and full of promise.
The third son disagreed; he said it was laden with blossoms that smelled so beautiful.  It was the most graceful thing he had ever seen.
The last son disagreed with all of them; he said it was ripe and drooping with fruit, full of life and fulfillment.

The man then explained to his sons that they were all right, because they had each seen but only one season in the tree's life.

He told them that you cannot judge a tree, or a person, by only one season, and that the essence of who they are and the pleasure, joy, and love that come from that life can only be measured at the end, when all the seasons are up.
If you give up when it's Winter, you will miss the promise of your Spring, the beauty of your Summer, the fulfillment of your Fall.

Moral:
Don't let the pain of one season destroy the joy of all the rest.
Don't judge life by one difficult season.
Persevere through the difficult patches and better times are sure to come.

Live Simply.
Love Generously.
Care Deeply.
Speak Kindly.
Leave the Rest to God.
Happiness keeps You Sweet,
Trials keep You Strong,
Sorrows keep You Human,
Failures keep You Humble,
Success keeps You Glowing,
But God keeps You Going!

The following pictures are of the same place but taken in different seasons..!

By Patricia L Johnson

A few months ago my partner and I, Richard Walrath, wrote an article on Income Mobility and a reader recently sent us an inquiry on the subject.

After a couple e-mails back and forth it finally occurred to me this reader was not completely aware of the difference in Earned and Unearned Income and I started wondering if other people are also confused on the subject.

Earned Income is any income derived from employment for services rendered.    If you are a contractor build a house, and get paid for your services, that is earned income.  If you are a contractor, get an advance payment for building the house, that is unearned income, once you build the house the unearned income then becomes 'earned' income.

Other forms of unearned income are civil service annuities, workers' compensation, unemployment compensation, life insurance proceeds (over and above the cost of the deceased last illness and burial), gifts, support and alimony (either in cash or in-kind), prizes and awards, dividends and interest, rents and royalties (except those considered earned income), Social Security benefits, Railroad Retirement benefits, Department of Veterans Affairs pension and compensation payments, private pensions and annuities.

I used gifts as an example of unearned income in my e-mails, and I'll use it here also as there are probably many people that aren't fully aware of what a neat treat the IRS gave us in the form of gift tax exclusions. 

The following is from IRS publication 950

For Gift Tax Purposes the following are applicable:

Year:   2007, 2008 - Annual Exclusion:  $12,000

*Unified Credit Amount:  $345,800 - Applicable Exclusion Amount:  $1,000,000

Unified Credit (Applicable Exclusion Amount) A credit is an amount that eliminates or reduces tax. The unified credit against taxable gifts will remain at $345,800 (exempting $1 million from tax) through 2009.

Generally, the following gifts are not taxable gifts:

Gifts, excluding gifts of future interests, that are not more than the annual exclusion for the calendar year,

Tuition or medical expenses you pay directly to a medical or educational institution for someone,

Gifts to your spouse,

Gifts to a political organization for its use, and

Gifts to charities.

Here are a few examples:

Example 1.    In 2007, you give your niece a cash gift of $8,000. It is your only gift to her this year. The gift is not a taxable gift because it is not more than the $12,000 annual exclusion.

Example 2.    You pay the $15,000 college tuition of your friend. Because the payment qualifies for the educational exclusion, the gift is not a taxable gift.

Example 3.    In 2007, you give $25,000 to your 25-year-old daughter. The first $12,000 of your gift is not subject to the gift tax because of the annual exclusion. The remaining $13,000 is a taxable gift. As explained later under Applying the Unified Credit to Gift Tax, you may not have to pay the gift tax on the remaining $13,000. However, you do have to file a gift tax return.

Please click the following link to read complete publication from the IRS.

http://www.irs.gov/publications/p950/ar02.html#d0e308

By Richard E Walrath

The Democrats shouldn't waste time on Bush. Get a bill on his desk as soon as they can without tax-cuts for business and the rich.  That's the most inefficient means of providing stimulus.  They just pocket the money.  If Bush wants to veto the bill, let him do it.  

He and the Republicans can take the heat in November. 

Food stamps, extended unemployment benefits, and a month's rent would be good for starters. 

On the McLaughlin Group this past Friday, Monica Crowley said that the last time they gave out refunds some of the people didn't spend them--they saved them. 

That's because they started passing them out from the top. 

Try doing it from the bottom this time, and all the money will get spent.

By Patricia L Johnson

The U.S. stock markets were closed Monday in observation of Martin Luther King Jr. Day but that didn't stop the Dow Jones industrial average futures from dropping 436 points or 3.6%, following the lead of foreign markets.  Japan's Nikkei 225, Hong Kong's Hang Seng, London's FTSE-100, German's DAX 30 and France's CAC040 all dropped considerably on Monday and Tuesday.

So what happened - what spooked the world markets?

One thing that happened is the Conference Board leading index decreased by 0.2 percent in December.  This is the third month in a row this indicator has decreased, and it has been down four of the past six months.  Of the 10 components in this index, six were negative for the month of December 2007 -- not a real good sign.

The FOMC, under the direction of Chairman Ben Bernanke, has already taken adequate measures to date based on market conditions, but the foreign sell off caused an emergency video meeting Monday night and on Tuesday morning the FOMC announced a decrease in the federal funds rate 75 basis points to 3-1/2 percent and a decrease in the discount rate 75 basis point to 4.0 percent and left he door open for further cuts following their scheduled meeting for next week.

President Bush has announced his plans for a stimulus plan to jump-start the economy, but it shouldn't surprise anyone that Bush's new stimulus proposal will have little impact on the people in this country that need it most, the poor and the middle class.

Where the Democrats want a plan that provides additional spending for food stamps, extended unemployment and infrastructure projects, Bush has different priorities stated in his weekly radio address:  "This growth package must be built on broad-based tax relief that will directly affect economic growth -- not the kind of spending projects that would have little immediate impact on our economy".

The January 18, 2007 Press Briefing by Treasury Secretary Henry Paulson and Chairman of the Council of Economic Advisors, Ed Lazear provide us with few details on the plan.

The total package will probably be between $140 to $150 billion, with the biggest portion, perhaps $100 billion benefiting individuals and perhaps $50 billion for business investment incentives.

Secretary Paulson when asked whether or not Social Security recipients might get a one time payment responded:

..."The Christmas season has come and gone. We're not trying to decorate a Christmas tree here."

He further stated the proposed stimulus plan:

 "is focused on broad-based tax relief for those who are paying taxes, and that was the principle he [President Bush] laid out. This is something that has worked well before, has worked in 2001, worked in 2003 -- get to consumers, put money in the hands of people, letting them spend it rather than the government spend it."

The problem with the Economic Growth and Tax Relief Reconciliation Act of 2001 [June 7, 2001] and The Jobs and Growth Tax Relief Reconciliation Act of 2003 [May 28, 2003] is the outcome.

As Chairman Lazear indicates in the press briefing

"There are two major parts of the economy that we have to deal with: the consumption side, and the investment side. Consumption is important, of course, because it is the major component of GDP; it's 70 percent of GDP. But in addition to that, investment is extremely important not only because it's a significant part of GDP, but also because investment is the way that we create demand for labor. And demand for labor means more jobs and more wages, and that's the reason that we have to focus on that side as well."

Over the past seven years the stimulus plans put in place by this administration have added a grand total of 6,011,000 jobs to the economy.  That's 6.0 million in seven years, or little more than 71,000 jobs per month to an economy that needs twice that many jobs added just to keep pace with population growth.  Source:  Bureau of Labor Statistics

The subprime mortgage crisis is the force pulling the economy down and with 1.7 million subprime mortgages scheduled to reset in 2008 and 2009, the maximum $150 billion dollar stimulus plan proposed by the White House may do little to curb recession fears.

What we may be looking at is another "growth" package from 1600 Pennsylvania Ave that grows little more than grass on the White House lawn and may be the very reason why world markets are ringing alarm bells.

By Patricia L Johnson

This morning the Federal Open Market Committee announced a decrease in the federal funds rate 75 basis points to 3-1/2 percent and a decrease in the discount rate 75 basis point to 4.0 percent.

By Richard E Walrath

So far, you'd think the subprime mortgage crisis affects only houses in the cheap rent districts.  Not so, the next wave is going to hit homes that look like these.

FDR declared a Bank Holiday until a way could be figured out to keep the banks from going under.  We need a a Home Holiday on mortgage increases for 90 days.

One of the funniest things the media is putting out now is the idea that Willard Romney will benefit from the economic crisis we're having because he has such extensive business experience. 

Does he have an MBA, too?  Just like Bush?

That will be such a help! 

Why do I refer to him as Willard Romney?  That's because it's his first name. 

"Some Simple Emergency Survival Tips" posted on January 20, 2008 contained the following statement in error.

"A pair, or two, of extra socks tucked inside your car will help keep you warm if you get stranded, and you will have a pair handy if your feet get wet and/or cold."

Please note the following correction:

By Richard E Walrath

No, don't tuck your socks inside your car. Your car doesn't care whether it's warm or not--it has no feelings.  Tuck your extra  pair(s) of socks inside your shirt to keep them warm and dry, and to help keep you warm.

By Richard E Walrath

Survival techniques for emergencies. 

A candle burning in your car if you get stranded will give off enough heat to keep you from freezing to death.  Open the window a little now and then to get some air. 

Keep a bag of newspapers and some matches in your trunk so you can build a fire - this may help somebody find you and will keep you alive until you're rescued.

A pair, or two, of extra socks tucked inside your car will help keep you warm if you get stranded, and you will have a pair handy if your feet get wet and/or cold.

To survive, you have to make your situation better, not perfect, just better.  That makes you feel better.  Then you find or think of something else you can do to improve your situation.  It helps if you know a few things to start with.

Countries in Europe use hot water to heat their homes.  The water is centrally heated and piped into houses and buildings.  With 400 million people, Europe uses about half the energy the United does with only 300 million people.

Water running into a bathtub provides heat, and once the bathtub gets hot, the heat stays there.  If you're cold and you start to feel warmer, you feel better right away.

A few techniques for keeping your home heating costs down:

Block drafts - if you cannot afford weather stripping, roll up a towel, blanket or throw rug and place in front of the door.

Dress in layers - the more layers you wear, the warmer you'll be.  Five layers is about as many as you can wear and still move around.  Outer garment should be some kind of wind breaker, not a sweater.  If you're going to be outdoors, a sweater won't keep the wind, snow or rain out.  If you're indoors, it doesn't matter so much. But if there is no heat in your house, you'll feel warmer with an outer garment.  Wear the sweater inside.

Invest in electric blankets - if you have little or no heat, you can still stay warm at night if you have electric blankets.

Open your drapes or blinds to let the sun in during the day. 

Close your unused rooms and shut the heater vent.

By Patricia L Johnson

Beep, beep, beep...

Beep, beep, beep...

Beep, beep, beep...

Over and over again the electronic ballot box rejected Mike's ballot.  After the 5th rejection the election judge provided him with a new ballot to complete and upon completion we once again heard:

Beep, beep, beep...

Beep, beep, beep...

Beep, beep, beep...

As a former election judge I accompanied Mike to the early polling place this afternoon just to take a look see at what procedures were in place and see how much action our newly implemented early voting was getting.

When the second ballot was rejected I advised the person working with Mike that the screen on the optical scanner should provide him with information on why the ballot wasn't accepted.  Since the election worker wasn't familiar with the information indicated on the screen he telephoned the election office to be advised that the machine was telling him the ballot was being placed in the wrong ballot bin.

During an election ballots are coded for each precinct.  The early voting polling location covers several precincts so there were many optical scanning ballot boxes in place.  Even though the election judge told Mike to place his ballot in the second machine, after the machine scanned the ballot it knew it was in the wrong bin and rejected it.

Score - Machine 1 - Human 0

Upon arriving home I was bombarded with newspaper headlines reading "NH Recount Finds Irregularities" - "NH Recount Finds Vote Count Errors" as well as a blog headline that I won't repeat because that would encourage the nonsense.  As you might guess the blog article is extremely popular and had a count of 179 on Digg. 

What is unfortunate about the blog article is the fact they are claiming huge errors were made by Diebold in counting the votes.

All ballots cast in New Hampshire are paper ballots, with some counted by Diebold Optical Scanning devices.  This is the basically the same technology that is used to scan your ATM card when you go to the bank, scan bar codes on purchases of merchandise in department stores, and the same technology that was used to let the election worker at the precinct know that the ballot was being placed in the wrong bin.

The recount is being done by hand and minor discrepancies found were due to human error.  Some voters didn't follow instructions properly resulting in improperly marked ballots that could not be read by the scanning devices.  Not much room for error when it comes to optical scanning.

The exception to the minor errors found were in the Manchester Ward 5 where larger errors were found.  Clinton's total dropped from 683 to 619 and Obama's total went from 404 to 365.  Other candidates totals dropped as well.  However,  once again, the error was made by a human, not an electronic counting device.

New Hampshire voters may vote for a Vice-Presidential candidate on their ballot and some voters wrote their choice for president in the Vice-Presidential space.  The clerk posting the totals erroneously added in the Vice-Presidential votes to the totals for the Presidential candidates resulting in overcounts.

Humans make errors on a regular basis, machines seldom do.

Score - Machine 2 - Human 0

What is incredible about this whole mess is we have 291 more days until the actual election.

Voting irregularities have made all of us more conscious of what is going on at our polling place, which is good for the country as a whole, but all of us must remember that humans are far more error prone than machines.

According to the New Hampshire WMUR article "Human Error, Not Machine, Found During Recount" hundreds of people have e-mailed New Hampshire Secretary of State, Bill Gardner, calling him a "liar", calling the election process a "sham" or threatening to have him arrested for "rigging the election".

Most of the irregularities found in voting tabulations over the past several years have been due to human error of some sort, but you generally don't hear that because it doesn't sell newspapers.  What sells newspapers and what gets peoples attention on the Internet are the articles that claim there is a conspiracy going on to steal your vote, or there is some sort of fraud.

This country needs a voting system that is standard from one county to the next, one state to the next, from the Atlantic to the Pacific.  We need election officials that are well trained in procedures and can concentrate their efforts on helping the voter get in and out of the polling place as quickly as possible.

And the one thing we need more than anything else is electronic voting machines that allow the blind, the disabled and the non-English speaking public to vote without assistance.

The reason HAVA passed was due to the extraordinary number of votes that were lost in prior elections. 

Standard voting procedures, standard voting machines and trained personnel limit the number of lost votes. 

By Patricia L Johnson

The National Bureau of Economic Research (NBER) is the organization responsible for calling a recession, "a recession".  They determine when a recession begins based on their definition: 

“A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real [inflation adjusted] GDP [gross domestic product], real income, employment, industrial production, and wholesale-retail sales.”

The last time NBER's Business Cycle Dating Committee called a recessionary period was in 2001, for the 8-month period beginning March 2001 and ending November 2001.

The November 2001 trough was announced July 17, 2003.
The March 2001 peak was announced November 26, 2001.

The CBO, in their January 2008 report Options for Responding to Short-Term Economic Weakness indicate five economists, "Richard Berner (Morgan Stanley), Martin Feldstein (HarvardUniversity), William Gross (PIMCO), Robert Shiller (Yale University) and Lawrence Summers (Harvard University) have all stated that the probability of a recession this year is greater than 50 percent."

All too often the media is full of reports about how this or that economist missed the boat on a forecast, but we'll give these guys the benefit of the doubt and agree that we'll probably have a recession this year.

Although a recession won't be called until 'after the fact' our economy is now operating in slow motion, so now what?

The Federal Reserve has been taking bold actions to keep the economy running on an even keel, but even the Big Bank may not be able to stop the tsunami caused by the subprime mortgage mess.  There are still 1.7 million subprime ARMs that will reset in 2008 and 2009.

Many of the 2008 presidential hopefuls have put together various stimulus packages.  Whether or not a stimulus package is needed to jump-start the economy has pretty much been answered, while the remaining question becomes what type of stimulus package will best serve our failing economy.

Three questions must be answered when looking at the various proposals.

1. Are they cost effective? 
2. Are they timely - do they provide a quick fix to the economy?
3. How sure are we of the end result?

The CBO has listed nine possibilities and prepared a chart (page 20) indicating the pros and cons of each.

• Lump-Sum Rebate
• Temporary Tax Reduction
  • Withholding Holiday for the Employee Payroll Tax
  • Across-the-Board Tax Rate Cut
• Deferring or Eliminating Scheduled Tax Increases
  • Extending the AMT Patch
  • Deferring or Eliminating Tax Rate Increase under EGTRRA or JGTRRA
• Cut in Corporate Tax Rates
• Incentives for New Investment
• Extending Operating Loss and Carryback Provision
• Direct Transfer Payments to Households
  • Extending or Expanding Unemployment Benefits
  • Temporarily Increasing Food Stamp Benefits
• Providing General Aid to State and Local Governments
• Investing in Public Works Project

Deciding what to do shouldn't be complicated if you look at the prior stimulus packages put into place during the Bush administration - they didn't work, so obviously a different approach is needed.   Providing tax cuts to the rich and tax and investment incentives to big business, just didn't provide the goals sought - unless the goal was to bankrupt the rest of us.

A review of the Consumer Price Index, CPI, report issued January 16, 2008 could provide an excellent case for directing the brunt of a new stimulus package to those needing it most, the poor and middle class.  The increases in basic necessities over the past year; food, energy and medical costs has impacted all of us, but has been especially detrimental to the poor and middle class. 

Nearly all the indicators have gone up considerably in the 12-months ended December 2007 v. the 12-months ended December 2006, with Energy commodities having the biggest increase at 29.4%, followed by Energy at 17.4%, Transportation 8.3%, Medical Care 5.2%, Food and Beverages 4.8%, Energy Services 3.4%, Other Goods and Services, 3.0%, Housing and Education at 3.0% each, Recreation at .8% and Apparel at -.3%.

The percentages indicated above are a sum of all items within a particular index.  Some increases in the food and beverage group over the past year are milk up 19.3%, cheese up 13.0%, cereal up 5.4%, bread up 10.5%, fruits and vegetables up 5.9%, and meats, poultry, fish and eggs up 5.4%.

Maybe I'm wrong, but it seems to me that eating, staying warm and being able to afford medical care when necessary shouldn't be a luxury in this country, but that appears to be the direction we're heading.

Food and energy costs spur increase; industrial production stalls

WASHINGTON - Higher costs for energy and food last year pushed inflation up by the largest amount in 17 years, even though prices generally remained tame outside of those two areas. Meanwhile, industrial output was flat in December, more evidence of a significant slowdown in the economy.

Click the following link to read full story:  http://www.msnbc.msn.com/id/22681319/

By Richard E Walrath

The big ' R'  is fast closing in on us, so now we hear about plans for doing something about heading it off. 

Hillary Clinton is proposing a $70 Billion stimulus plan for those with lower incomes--that's called trickle up.

What I don't understand is why does it take seven years and $700 billion of trickle down to get us where we are? 

Why not just skip the trickle down idea since we know it doesn't work?

If we can head off the big 'R' with only $70 Billion, just think of what we could do with $700 Billion!

People are way over their heads in debt, and have no way out except bankruptcy which the Republicans have made more difficult and more costly to protect their business interests, but bankruptcies are on the rise.

People on the bottom half just can't make it any more on their incomes.  The median household income is below $50,000.  Food, housing, health care and energy are consuming more and more of their incomes.

Add a debt burden that has been steadily growing to this picture, and you see the
Big 'R' fast approaching.

What the bottom half needs is an increase in income--not just a short-time, one-time
stimulus. 

Wages have been suppressed and depressed for years.  The minimum wage stayed at $5.15 an hour for almost ten years! 

When you have to stop going out to McDonald's, you know things are getting bad.

Starbuck's sales are dropping.  People who used to spend $3 for a cup of coffee aren't going to do that anymore.  Appleby's has been having problems for some time and Wendy's is even worse off.

Even more telling are McDonald's sales which have fallen.  People aren't eating out so much--even to buy a hamburger.  When you have to stop going out to McDonald's, you know things are getting bad.

Next thing people will have to do is learn to boil water and make soup.

Meanwhile, debt in the bottom half has soared.  Add to this grim picture growing unemployment and the financial crisis due to the subprime mortgage mess, and you can understand the situation we are in. 

Richard E Walrath is a former budget analyst and co-owner of the Articles and Answers News and Information sites:  Articles and Answers  Articles and Answers 2007 and the Alternative Augumenta blog.

By Patricia L Johnson

Each month the Bureau of Labor Statistics (BLS) prepares the Employment Situation Report for the prior month.  This particular report is a big deal because it's a "market mover" meaning the results of this report have the ability to push the Dow Jones Industrial Average, DJIA, higher if the results are good, or send the stock market spiraling if the numbers are poor.

The employment report consists of a combination of data from two separate sources:

•  Household Survey is a sampling of approximately 60,000 households and only covers a small percentage of employed persons.
• Establishment Survey is a survey conducted on approximately 400,000 businesses of all sizes and represents about 33% of total nonfarm employment.

Between the two data sources the BLS is able to provide us with various information in their report, including the following figures for December 2007, as released on January 4, 2008. 

• Unemployment Rate - 5% - Household Survey
• Nonfarm payroll employment - +18,000 - Establishment Survey [138,495]
• Number of unemployed persons  - 7.7 - Household Survey
• Total employment - 146.2 million - Household Survey

The figures released each month are the seasonally adjusted totals and the key number is the increase/decrease in nonfarm payroll employment.  In the month of December 2007 the increase in nonfarm payroll employment is +18,000, meaning 18,000 jobs were added to payrolls during the month of December 2007.

During a President's term of office, the number of jobs produced during his/her administration becomes a very important issue because job creation is based on economic policies put in force by the administration.

Upon release of the January 4, 2008 Employment Situation Report, the White House placed a Fact Sheet on their website claiming "Since August 2003, more than 8.3 million jobs have been created". 

Knowing the Bush administration didn't start in August 2003 and knowing 8.3 million jobs since August 2003 averaged out to little more than 160,000 jobs a month I decided to research the subject further.

During the eight years, Bill Clinton was in office, his economic policies produced 23.1 million jobs [average 240,000 per month] as follows:

Data extracted on: January 12, 2008 (11:19:19 AM)

Employment, Hours, and Earnings from the Current Employment Statistics survey (National)

Series Id:     CES0000000001
Seasonally Adjusted
Super Sector:  Total nonfarm
Industry:      Total nonfarm
NAICS Code:    N/A
Data Type:     ALL EMPLOYEES, THOUSANDS

Year
Dec

1992
109418

2000
132484

At the end December 1992 the Bureau of Labor Statistics, BLS is indicating total, seasonally adjusted nonfarm employment, of 109,418,000.  At the end of December 2000, the total has increased to 132,484,000.  The difference is 23,066,000 or 23.1 million new jobs were produced during the Clinton presidency. 

In contrast, George Bush has been in office seven years and his economic policies have produced a total of 6.0 million jobs as follows:

Data extracted on: January 12, 2008 (11:31:47 AM)

Employment, Hours, and Earnings from the Current Employment Statistics survey (National)

Series Id:     CES0000000001
Seasonally Adjusted
Super Sector:  Total nonfarm
Industry:      Total nonfarm
NAICS Code:    N/A
Data Type:     ALL EMPLOYEES, THOUSANDS

Year
Dec

2000
132484

2007
138495(p)

p : preliminary

At the end December 2000 the Bureau of Labor Statistics, BLS is indicating total, seasonally adjusted nonfarm employment, of 132,484,000.  At the end of December 2007, the total has increased to a preliminary figure of 138,495,000.  The difference is 6,011,000 or 6.0 million new jobs have been produced during the seven year period from January 2001 through December 2007, the length of time President Bush has been in office.  

If the White House is stating 8.3 million jobs were created and I'm saying 6.0 million jobs have been created, who is correct? Both figures are correct - they just represent different periods of time.  The White House is simply ignoring the job losses incurred during the first 32 months of the Bush presidency.

There have been 8.3 million jobs created since August 2003, but there were 2.3 million jobs lost during the period from January 2001 through July 2003, bringing the job creation total down to 6.0 million from January 2001 through December 2007.

This is a very important subject and you really shouldn't believe either what the White House is stating, or what I'm indicating regarding these numbers.  To confirm the validity of the numbers, you should extract the data yourself from the Bureau of Labor Statistics.

What these numbers prove is the economic policies put forth by the Bush administration, mainly The Jobs & Growth Tax Relief Reconciliation Act of 2003 have backfired. 

The tax cuts in this plan were intended to "encourage consumer spending that will continue to boost the economic recovery and create jobs" and "promote investment by individuals and businesses that will lead to economic growth and job creation."

Our country cannot move forward with policies that create little more than 71,000 jobs per month.

Most Americans are worried about the economy and think this country needs change.  The major change needed is to go back to the policies that were in effect under the Clinton administration, where all of us prospered, not just the rich and big business.

Patricia L Johnson is a former special assignment writer/photographer and co-owner of the Articles and Answers News and Information sites. You may read more by this author at http://www.articlesandanswers.com or http://articles2007.spaces.live.com

By Richard E Walrath

People are way over their heads in debt, and have no way out except bankruptcy which the Republicans have made more difficult and more costly to protect their business interests, but bankruptcies are on the rise.

People on the bottom half just can't make it any more on their incomes.  The median household income is below $50,000.  Food, housing, health care and energy are consuming more and more of their incomes.

Add a debt burden that has been steadily growing to this picture, and you see the Big 'R' fast approaching.

What the bottom half needs is an increase in income--not just a short-time, one-time stimulus. 

Wages have been suppressed and depressed for years.  The minimum wage stayed at $5.15 an hour for almost ten years! 

Meanwhile, debt in the bottom half has soared.  Add to this grim picture growing unemployment and the financial crisis due to the subprime mortgage mess, and you can understand the situation we are in. 

By Richard E Walrath

The big 'R" is fast closing in on us, so now we hear about plans for doing something about heading it off. 

Hillary Clinton is proposing a $70 Billion stimulus plan for those with lower incomes--that's called trickle up.

What I don't understand is why does it take seven years and $700 billion of trickle down to get us where we are? 

Why not just skip the trickle down idea since we know it doesn't work?

If we can head off the big 'R' with only $70 Billion, just think of what we could do with $700 Billion!

By Richard E Walrath

It looks like another Perfect Storm to me.

I'm talking about the NH Primary results which left egg all over the pollsters and the political pundits and the media. 

Ever since the book and the movie, by the same name, came out, things that go wrong are called a perfect storm.

For opera lovers, it was the Una Furtiva Lagrima that escaped from Hillary Clinton as she bravely faced the cameras and voters on the fateful final day before the election.  That's what swayed the election, say they.

Not so, says Andrew Kohut, President Pew Research Center, who brings you the Pew Polls.  It was the po' white folks, the poor women voters, to be exact, who turned out in record numbers to vote for Senator Clinton. 

Kohut, in his NYT Op-Ed piece today, probably has summed up the results best. 

Pollsters, pundits and the media saw what they wanted to see, not what was really there.

Now they will have to face the possibility that their dwindling number of readers and viewers will continue to dwindle and diminish.  But I would suggest that being wrong isn't something that the pollsters, the political pundits and the media should find so hard to explain. 

After all, they've had lots of practice.

It reminds me of one of Clint Eastwood's movies, Pink Cadillac.  Somebody named Roy is supposed to be acting as a look-out, but a gang goes right around him unnoticed by Roy.  How could they get by Roy, says one character in the  movie. People have been getting by Roy for years is Eastwood's answer.

Lots of stuff--people and things--have been getting by the pollsters, political pundits and the media for years--seven going on eight years, at least.

Richard E Walrath is a former budget analyst and co-owner of the Articles and Answers News and Information sites:  Articles and Answers  Articles and Answers 2007 and the Alternative Augumenta blog.