Archive for July 6th, 2010

Analyst: Obama Has U.S. Economy in ‘Death Spiral’

Tuesday, July 6th, 2010

We can only hope that this trend can be reversed.

A new analysis of the U.S. economy shows that since 2007, the private sector has lost 10.5 million jobs while the public sector has added 720,000 jobs, creating a “death spiral” for the nation’s economy.

The study comes from The Free Enterprise Nation, a nonpartisan national membership/advocacy organization for individuals and businesses that make up the private sector.

The analysis was done using statistics about employment data from the U.S. Bureau of Labor Statistics.

The recession of the last two years exacerbated the larger problem that already was in place, it revealed.

“Over the 10-year period between March 2000 and March 2010, the private sector lost over three million jobs, while the public sector gained nearly two million jobs,” the analysis concludes.

Among the changes were California’s loss of 665,800 jobs in the private sector. But government in the Golden State added 163,800 jobs.

Also, Michigan lost 791,700 private-sector jobs, a “staggering” 20 percent. Government bureaucracies, however, kept all but 7 percent of their positions.


* North Carolina showed a 10-year loss of 138,200 private-sector jobs, or 4 percent of its private-sector workforce, while adding 127,100 government jobs, a 20 percent increase.

* Colorado’s population increased by 17 percent in the past decade while losing 3 percent of its private-sector jobs. Government employment increased by more than 17 percent during the same time frame.

* Tennessee lost 157,300 private-sector jobs while adding 13,900 in government agencies.

* While Texas added 616,000 private-sector jobs, it also added 295,200 government jobs, almost one bureaucratic position for every two positions in private enterprise.

* Florida also added private-sector jobs overall – 39,600. But it also added 127,100 government positions.

* Massachusetts lost 168,700 private-sector jobs but still found the need to add 7,500 government jobs.

* Wisconsin lost 149,400 private-sector jobs; added 22,300 to government payrolls.

“The consequence of this employment shift is that a smaller number of private-sector employers and workers are saddled with the tax burden of financially supporting a growing government workforce,” said MacDougald.

“Since public-sector workers are paid more on average in compensation and benefits than private-sector workers, it is financially unsustainable for the government to continue to grow while the private-sector workforce shrinks,” he said.

He explained to WND that while the problem is massive, there is the potential for a solution.

“There are 89,000 taxpayer-supported entities that make up the ‘public sector,’ and no one is in charge of their collective efforts. About one-half of the 22 million public-sector workers are in public education. (And only about one-half of the people employed in public education are teachers!)” he said.

“It is possible that the federal government thinks it can solve the unemployment problem by hiring more people, but, if so, it would be another indication of just how far removed from reality the federal government’s economic policies are,” he said.

“Our population grew by 25 million from 2000 to 2010. We needed to create at least 20 million new jobs. Instead, we lost 3 million in the private sector. The ‘shortfall’ of 23 million jobs could not possibly be made up by government hiring, as they would have to double in size in order to do so,” he said.

The real problem is not necessarily with the number of government jobs but the cost of their “huge pensions, early retirement and health-insurance benefits.”

“That is where the real ‘cost of government’ is,” he continued. “As numbers of workers in the private sector decrease, and public-sector hiring increases, it places an impossible burden on those individuals and businesses left who actually pay taxes.

“Unfortunately, the current approach is to charge more taxes to those who actually pay federal income taxes (one-half of tax filers), and businesses. Businesses (employers) have no choice but to reduce overhead, which means fewer domestic workers. A death spiral,” he warned.

The solution would be a hard pill to swallow for many, he warned.

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