President Obama fancies himself the reincarnation of President Franklin Delano Roosevelt, who took office in 1933, meaning, among other things, that Obameconomist intends to use over-the-top spending by government to save the economy and wipeout unemployment or at least greatly diminish the unemployment rate. To this effect, he has led the way for the bailout, the stimulus package, and the current giveaways to Social Security recipients (amounting to well over $1.5 trillion), with a planned budget reaching so far into the trillions that no one, in or out of government, understands just how deep the hole will be, since the national till is empty.
The strangest thing about this is that the Congress, in which one could expect a large number of people to have common sense, has gone along – okay, just the democrats – and in the process revealing that their collective knowledge of history amounts to zilch. There aren’t even enough blue-dog democrats to either see the light or have the guts to stop the administration’s nonsense.
Roosevelt inherited an unemployment rate of 23.6%. In 1938, after five years of the FDR New Deal spending, some of it on good causes, the unemployment rate stood at 19%. In 1940, it was down to 14.6%, but one has to figure the upturn in industry as it related to preparing for World War II.
Ronald Reagan inherited an unemployment rate of 7.1% in 1981 (prime interest rate, 20%). With the Carter economy in freefall, it ballooned to 9.7% in 1982, but, after Reagan took just the opposite approach to that of FDR – cutting spending and adjusting the tax rates – the unemployment rate was down to 7.5% in 1984 (prime interest rate, 10.5%). There’s a lesson here that a totally clueless administration and Congress can’t fathom, or won’t fathom because their agenda may be the same as that of the Workers Party in the 1930s, i.e., installing socialism or communism, but even the unions would have none of that, notwithstanding the siren song of “something for nothing.”
Actually, the situation was so much worse in the 1930s than that of today that there’s no comparison, mainly owing to a societal change of drastic proportions. In 1940, 25.4% of women over age 14 held paying jobs. In 2008, that figure was 59.5% for women over age 16. In other words, the work force of the 1930s was largely male – fathers, husbands. Today, that’s not the case. If the situation in the 30s were like that of today sociologically, the actual figure of unemployment would have been 34%, a far worse picture than is displayed just by statistics.
If the situation today were like that of the 30s – workforce mostly male – the unemployment rate would be 3.6%, a totally different number from the current 8.5%. In the 30s, men expected to be the breadwinners for their families. Today, men are not expected to fill that role, and probably most husbands/fathers prefer this. Certainly, the women do. In 1957, the average number of children in a family was 3.7; today, that figure is 1.9, barely enough to sustain the population. As more women have entered the workforce, children have become increasingly inconvenient.
So, even though the circumstances of today are nowhere near as bad as those of the 30s, Obama and his crowd have not only decided to spend the nation into insolvency (actually already there), thus inducing socialism, but have moved to take over both the financial and manufacturing bases of the economy. The bailout of the banks has devolved into enhancing their bottom line without the bother of lending money, thus decreasing the availability of capital. Banking decisions can be made only with the approval of Obama, making him the actual keeper of the national books.
Obama and the country’s best-known tax-cheat, aka Treasury Secretary Geithner, are now running both Chrysler and General Motors, actually running them both into an obviously well-planned bankruptcy leading to total government control of the auto industry. Their union allies, when they discover they’ve been bamboozled, will cry the loudest.
These takeovers give the two companies a tremendous advantage over Ford, Toyota and other car companies, since the government’s deep (imagined) pockets reach to infinity, while the private enterprises have to desperately try to compete. The objective of Obama and crowd is to drive Ford and the others into bankruptcy, also, thus completing the cycle. This can be replicated for all other manufacturing enterprises, and Geithner already has (or will have) the power to shut down any company he claims is not viable…his call, and his alone.
Either the Congress will get a grip on this country…or else. FDR gave the country Social Security, which was a Ponzi scheme in 1937, workers paying retirees. Obama is going for universal health-care, another Ponzi scheme, workers paying astronomical costs that should be borne by individuals and their insurance companies, with proper regulation, though Medicare is evidence that proper regulation is hard to define.
In 1950, the ratio of workers to retirees drawing benefits was 16:1. Now, it’s about 3:1, and as the boomers retire it will become 2:1, virtually unsustainable. President Bush tried to get Congress (both parties) to address the problem. No dice. The original SS tax was $60 per year (2% of first $3,000 in wages). Today, it is 6.2% on the first $106,800 of wages matched by the government for a total of 12.4% or one-eighth of most workers’ annual wages. The individual Medicare tax is at 1.45% matched by government for another 2.9% altogether. This represents one-seventh of a worker’s income. Add the income taxes and all other state and local taxes and it’s gangbusters!
In the midst of this, Obamessiah and the Congress are tooling up a budget of trillions – okay, printing money, soon to be worthless. Obama promised change and the country is getting it in spades. The entrepreneurship that made this country is being demolished by leaders who are either subversive, intentionally destructive, or as dumb as gourds.