The jobless rate has shot up to 10.2% according to a story in USA Today. Now, in the video that covers this story on USA Today's website, AP reporter Mark Hambrick says that if you factor in those people who have settled for part time work or have given up altogether, the rate is 17.5%. So, what is the real jobless rate? Well, we may all agree that the real rate is those who are actually without work and are still looking, that's a fair definition. However, the fact that the other numbers aren't reported to everyone, or aren't widely known seems to be... misleading? deceptive? Here's one person's take on it.
Now the question is: "What does interventionism have to do with the jobless rate, and what does that even mean, anyway?" Slow down, there. One at a time.
First, interventionism is defined by Wikipedia, here. Basically, it's when a government feels an undying need to interfere in an economy. For details on that, just google the word "federal" and add any of the following names of these Fortune 500 companies: AIG, GM, Citigroup, Bank of America, etc. For more interesting information on the history of government bailouts, click here.
Now for how this effects the jobless rate. I'll start with a question: Have you ever heard of the Great Depression of 1920? No? You're thinking of the Great Depression of the 30's, right? There was a Great Depression in 1920-21, but it ended after about 18 months. How did we recover so quickly? I'm glad you asked! Well, listen carefully... The government did nothing. That's right, nothing. Well, that's not entirely true. They cut spending. What?! The government cut spending? That's absolutely absurd, you say? Well, that's what they did. Other than that, they did nothing. No propping up banks, no bailing out large corporations, no TARP, no TALF, no New Deal, nada. Nothing. Does that just defy all logic? Well, then doesn't that make you wonder for a moment, just for a split-second, "Could the Great Depression of the 30's have been much less painful for everyone had the government cut spending and kept out of business altogether?" Now that we've opened that possibility, read this article by Tom Woods (mentioned earlier in the IVLG blog). Then, track down this book by Amity Shlaes, entitled "The Forgotten Man." Both are well worth your time and will help you to get a clearer picture of what is really happening to your country right now.
Showing posts with label intervention. Show all posts
Showing posts with label intervention. Show all posts
Friday, November 6, 2009
Thursday, November 5, 2009
The Real Cost of Gov't Intervention
Recent figures on the true cost of the Cash for Clunkers program and the First-time Home Buyers Tax Credit program show they are costing the government a lot of money... Let me rephrase that: YOU, the American taxpayer, are getting pick-pocketed by the U.S. government, and they can't even do that efficiently.
To elaborate, the brilliant Cash-for-Clunkers program was intended to boost car sales and to get gas guzzlers off the road, which would be replaced by shiny new fuel-efficient vehicles. For every clunker you bring in, you get $4500 toward the price of a newer, more efficient car. In order to administrate this program, the government has to pay people. They can't work for free, right? So, for every car that was purchased under this program, the cost to the government (i.e. you and me), was $24,000. What a bargain, huh? So, 690,000 cars @ $24,000/ea = $16.56 billion. Every man, woman and child in the U.S. just committed $50.95 each to this magnificent success of a program, give or take a dime. Keep in mind, too, this isn't really the case, though, because no children actually pay taxes and not every man or woman pays taxes either. So, for the taxpaying American, that number goes up.
Now, let's discuss the First-time Home Buyers Tax Credit program. This piece of work promised that the government, (read: you), would essentially pay $8,000 to anyone who chooses to buy a home for the first time, including four-year-old children. So far, this program is costing the government $10.8 billion in lost taxes. The trickle-down comes to $33.23 for every man, woman, and child in America. I say "So far" because it's not over. This program has been so great that it's being expanded! I should note again that the cost per taxpayer is different than the cost per person within the borders of the United States.
What does this imply for the national deficit or the budget deficit? Well, that's a whole different story that will need to be addressed later. I will give you a preview: it's not good news.
To elaborate, the brilliant Cash-for-Clunkers program was intended to boost car sales and to get gas guzzlers off the road, which would be replaced by shiny new fuel-efficient vehicles. For every clunker you bring in, you get $4500 toward the price of a newer, more efficient car. In order to administrate this program, the government has to pay people. They can't work for free, right? So, for every car that was purchased under this program, the cost to the government (i.e. you and me), was $24,000. What a bargain, huh? So, 690,000 cars @ $24,000/ea = $16.56 billion. Every man, woman and child in the U.S. just committed $50.95 each to this magnificent success of a program, give or take a dime. Keep in mind, too, this isn't really the case, though, because no children actually pay taxes and not every man or woman pays taxes either. So, for the taxpaying American, that number goes up.
Now, let's discuss the First-time Home Buyers Tax Credit program. This piece of work promised that the government, (read: you), would essentially pay $8,000 to anyone who chooses to buy a home for the first time, including four-year-old children. So far, this program is costing the government $10.8 billion in lost taxes. The trickle-down comes to $33.23 for every man, woman, and child in America. I say "So far" because it's not over. This program has been so great that it's being expanded! I should note again that the cost per taxpayer is different than the cost per person within the borders of the United States.
What does this imply for the national deficit or the budget deficit? Well, that's a whole different story that will need to be addressed later. I will give you a preview: it's not good news.
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