Thursday’s job numbers came out and as expected, at least for those of us who live in the world of economic reality, the numbers were disappointing. With the addition of only 80,000, or a whopping 1,600 per state, this is hardly a sign of a robust recovery as some would want us to believe. We also saw U.S. manufacturing shrink in June for the first time in 3 years (1) (2) . With only four months remaining before the November election, President Obama faces the daunting task of facing voters with a contracting economy, hardly an ideal position for an incumbent president.
What these numbers reveal is that our economy finds itself in a continuing state of stagnation. The bad news is that markets do not remain in states of stagnation and move either up or down depending on how investors view the economic future. If investors see a bright future, they will feel emboldened to release spent up capital and invest it in order to grow their companies. If, however, they see a bleak future they will begin pulling out their investment capital and investing it elsewhere. Looking at the current stock market trends, I fear this pulling out of capital has begun to occur and if the increase in capital gains rises from 15 percent to the normal tax rate, we may see even more investors pull out their investments prior to the end of the year.
In order to insure we move upward out of our current state of stagnation, we must create an economic climate that promises investors a brighter future. The prospect of Taxmageddon (3) coupled with the additional Obamacare taxes and regulations (4) (5) create the prospect of a bleak future for investors resulting in a downward exit out of the state of stagnation. Therefore, we must create a picture of a brighter future by
1. Extending, or better yet making permanent, the current income tax rates including the lower capital gains rate.
2. Lower the corporate tax rate to encourage corporate investment and expansion in order to create private sector jobs. This will encourage less outsourcing and may even create some insourcing such as Airbus’ plans to open up a plant in Alabama.
3. Repealing of Obamacare so companies will know what the cost of hiring new employees will be and that they will not be subject to a tidal wave of new government regulations and taxes.
4. Easing up on EPA regulations so we can have stable energy prices due to more domestic energy production and stop seeing the spikes in energy prices we have seen over the last 4 years.
This is another reason why the upcoming election is so important. On the one hand, we have the incumbent, Barak Obama who promises more of the same; increased regulations with the full implementation of Obamacare, higher taxes brought on by the expiration of the Bush tax rates, and additional taxes with full implementation of Obamacare. On the other hand, we can elect Mitt Romney, a greater conservative majority in the House, and a conservative Senate, resulting in the repealing of Obamacare, lower taxes, and lower regulations. This will provide the perception of a brighter future for the U.S. economy and encourage more investment and less outsourcing.
I am hopeful that a majority of the voters in November will make the right decision. A decision not based the emotion of what feels good now as voters did in 2008, but a decision based on what is right for the country both now and into the future. Please pass this around and encourage your liberal friends to take a serious look at their current economic condition. Most likely, unless they are a government employee, it is no better than it was when Obama was inaugurated and may even be worse. Remind them of the famous quote of Thomas Edison “Insanity is doing the same thing over and over again expecting a different result.” Obama’s policies have had 3 ½ years to begin working and we have seen no progress and find ourselves in a state of stagnation.
Our nation needs different results. It needs to change direction and cease implementation of the same failed policies that have shown themselves not to work both now, throughout history, and in different parts of the world. In other words, the United States needs to come out of its current state of insane stagnation and begin moving forward economically in an upward direction through the implementation of sound economic policies.
1. Fox News. After weak jobs report, 4 more chances for Obama to show economic growth. Foxnews.com. [Online] Fox news, June 6, 2012. [Cited: June 7, 2012.] http://www.foxnews.com/politics/2012/07/06/employers-add-just-80000-jobs-in-june-unemployment-rate-stays-at-82-percent/#ixzz1zqYdO8JG.
2. Associated Press. US manufacturing shrinks for first time in 3 years. www.foxnews.com. [Online] Fox News, July 2, 2012. [Cited: July 7, 2012.] http://www.foxnews.com/politics/2012/07/02/us-manufacturing-shrinks-for-first-time-in-2-years/.
3. Payne, Amy. Morning Bell: How Taxmageddon Will Impact You. blog.heritage.org. [Online] The Heritage Foundation, June 15, 2012. [Cited: July 7, 2012.] http://blog.heritage.org/2012/06/15/morning-bell-how-taxmageddon-will-impact-you/.
4. Kartch, John. Full List of Obamacare Tax Hikes: Listed by Size of Tax Hike. m.atr.org. [Online] Americans for Tax Reform, June 29, 2012. [Cited: July 7, 2012.] http://m.atr.org/article.php?id=7010.
5. Angle, Jim. Efforts to implement ObamaCare law raise concerns of massive government expansion. www.foxnews.com. [Online] Fox News, July 3, 2012. [Cited: July 7, 2012.] http://www.foxnews.com/politics/2012/07/03/efforts-to-implement-obamacare-law-raise-concerns-massive-government-expansion/#ixzz1ziuZDCSV.
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