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Politicians proclaim the benefits of small business while on the campaign trail. But when they meet in the seedy halls of Congress, they have no problem doing whatever they can to stifle, regulate, and subdue their progress. Instead of siding with entrepreneurs, these politicians often side with political allies and cronies that helped put them into office.
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The U.S. dollar has been the world's reserve currency for almost a century, and already there are signs it may be in decline. But that doesn't mean it's not still valuable. On the contrary... As Chris Mayer explains, there are many reasons the U.S. dollar will remain relevant on the world stage for years to come. Read on...
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The Congressional Budget Office said the government needed to reach 7 million people by the end of March. They claim to have reached the goal and now the debate about Obamacare is over. But what does this milestone really mean in the ongoing healthcare discussion? And more importantly, how will it affect reforms going forward?
If you’re good at something should you be penalized so others have a chance at success? Should award winning actors and actresses be barred from future Oscar ceremonies to give other men and women the chance to succeed? Success should always be rewarded and encouraged. But what happens when you have a government that wants to even the playing field and take away the spoils of success. Gregory Bresiger finds out...
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Practical people often pooh-pooh fiction reading as a time wasting dalliance, dominated by a Marxist coloring of the world. However, fiction readers were given a scientific reason recently for spending hours absorbing fanciful figments of someone’s imagination.
Argentina is suffering the ravages of government debasement of the currency -- i.e., inflation, the process by which government pays for its ever-increasing debts and bills by simply printing more paper currency. The expanded money supply results in a lower value of everyone’s money, which is reflected in the rising prices of the things that money buys.
When government expansion is allowed to continue unabated or when it casts a heavy regulatory shadow on America’s entrepreneurial spirit, the freedoms that we’ve come to know, and perhaps take for granted, slowly begin to slip away.
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The new reality of Obamacare’s tax credits has left finance reporters to pen articles warning readers to “take care” when considering a tax credit and providing strategies for how best to “protect yourself.” So what do finance reporters know that the White House doesn’t?
Nihilo ex nihilo fit. Out of nothing, nothing comes. First put forward by ancient Greek philosopher Parmenides in the fifth century B.C., Thomas Aquinas and St. Augustine later used this axiom to prove that the universe needed a “first mover” to get things going. Even if the whole thing began with some kind of “Big Bang” moment, it still needed a banger to bang it. Who? God, of course.
What positive steps can we take? The energy that is now expended by well intentioned, freedom-seeking individuals on the destructive course of politics can be turned into powerful steps that will have a positive effect on the future. All are moral, right and just. None require aggressing. Consider the following...
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Politicians and bureaucrats are notorious for manufacturing euphemisms -- clever but deceptive substitutes for what they really mean but don’t want to admit. That’s how the phrase “revenue enhancement” entered the vocabulary. Some of our courageous friends in government couldn’t bring themselves to say “tax hike.”
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National Treasury Union President Colleen M. Kelly recently described the 2014 IRS budget allocation as “woefully inadequate.” But the agency has not proven itself to be an efficient steward of taxpayer dollars. Here are ten ways the IRS lost the trust of the American people.
It’s easy to be negative about the U.S. economy these days. Find a glint of silver, and folks come running to point out all of the dark clouds looming about. This, of course, is what we got last week when the monthly jobs report was released from the U.S. Department of Labor (DOL). Folks pooh-poohed the number of jobs and whining that they’re not enough or that it’s less than a bunch of economists thought that it might be. But you know what? Stuff ’em.
Given how poorly states like California and Illinois have funded the pension funds for their own employees, one would think that this would stop dead in its tracks any plan to have the government assist in managing private sector funds too. The spate of recent activity, however, suggests otherwise.
Facts are easy. You can check facts. What supporters of the Affordable Care Act are doing, on the other hand, transcends factual bungling. It’s far more advanced: a warping of reality so debauched it looks like something out of a tale by H.P. Lovecraft.
Some statistics cannot be understood without being set within a political framework, because they reflect politics as much as, or more than, they do reality.
The unemployment rate is an example and a cautionary tale.
According to the Bureau of Labor Statistics (BLS), the seasonally adjusted official unemployment rate for February fell to a four-year national low of 7.7%. While the White House cautiously congratulated itself, Republicans quickly pointed to what is often called the real unemployment rate; it stood at 14.3%.
The BLS looks at six categories of different data, from U-1 to U-6, to analyze employment every month. U-3 includes people who have been unemployed but who have actively looked for work during the past month; this is the official unemployment rate used by the media. U-6 contains data excluded from U-3, including part-time workers and the unemployed who have unsuccessfully looked for a job in the last year; this is the real unemployment rate.
Those politicians who want to take credit for lower unemployment thrust U-3 figures forward. Those who wish to deny them credit prefer U-6.
But matters may be even worse.
Now there is fresh reason to believe that even the 14.3% rate may be a considerable understatement.
The Disabled and the Unemployment Rate
National Public Radio recently published the results of a six-month investigation by reporter Chana Joffe-Walt: “Unfit for Work: The Startling Rise of Disability in America.” Joffe-Walt uncovered what she calls a “disability-industrial complex,” which spends more on disability payouts than on welfare and food stamps combined.
About a year ago, the New York Post reported that “more than 10.5 million individuals” received disability each month, and that the reserves will be exhausted in 2018. Joffe-Walt claims the federal government sends out approximately 14 million payments; Social Security’s disability fund is expected to run out of reserves by 2016.
On March 22, during an interview with This American Life, we learned that “since the economy began its slow, slow recovery in late 2009, we’ve been averaging about 150,000 jobs created per month. In that same period every month, almost 250,000 people have been applying for disability.”
Why do disability figures skew the unemployment rate? In the NPR article, Joffe-Walt explains that “the vast majority of people on federal disability do not work. Yet because they are not technically part of the labor force, they are not counted among the unemployed.” They become the invisible unemployed.
What Explains the Rise in Disability Payouts?
The precipitous rise in disability claims comes from the unintended consequences of political maneuvering.
“The End of Welfare as We Know It” was announced in 1996 when President Clinton signed a reform act intended to move people off welfare rolls and into jobs. Clinton “encouraged” the individual states to push for the transition by making them fund a much larger share of their welfare programs. To encourage the individual recipients, the reforms also capped the length of time a person was eligible for welfare.
The incentive worked on the states, but not in the manner intended.
Each person on welfare became a continuing cost for a state, but each person who moved onto disability saved the state money, because Social Security disability insurance is fully funded by the federal government.
In her NPR report, Joffe-Walt indicates how aggressively the states shifted welfare recipients onto disability. She writes:
“PCG [Public Consulting Group] is a private company that states pay to comb their welfare rolls and move as many people as possible onto disability… The company has an office in eastern Washington state that’s basically a call center, full of headsetted women in cubicles who make calls all day long to potentially disabled Americans, trying to help them discover and document their disabilities.”
A recent contract between PCG and the state of Missouri offered PCG $2,300 per person it shifted from welfare to disability.
The incentive for individuals to leave welfare also worked, but, again, not in the manner intended.
Disability is easier to qualify for than welfare and has no time limit. Moreover, those on disability qualify for Medicare and other benefits, as well as receive payments roughly equal to a minimum-wage job. According to Joffe-Walt, only 1% of those who go onto disability leave to rejoin the workforce.
Conclusion: What Is the Actual Unemployment Rate?
If neither the official (U-3) nor the real (U-6) unemployment rate can be trusted, then how can we ascertain a more reliable rate?
A huge step would be to acknowledge the invisible unemployed who are not part of the current BLS calculations. They include not merely the so-called “disabled,” but also those who have left the workforce for other reasons.
CNS News noted of the February 7.7% unemployment rate: “The number of Americans designated as ‘not in the labor force’ in February was 89,304,000, a record high… according to the Department of Labor.” The economic trend-monitoring site InvestmentWatch concluded that the actual American unemployment rate — one that includes all unemployed — is around 30%. The site reasoned that “89 million not in the labor force = 29%, give or take, assuming the U.S. population is 310,000,000 + official unemployment 7.7%.”
It is not possible to render an entirely accurate unemployment picture. For example, the population figure of 310,000,000 used by InvestmentWatch almost certainly includes people under 16 who cannot legally work. Thus, the unemployment rate may be higher. On the other hand, many “not in the labor force” could be retired or otherwise voluntarily unemployed. Not enough data are available.
It is possible, however, to reject the official unemployment rate. And it is necessary to cultivate a healthy skepticism of statistics produced by politics, as so many are.