What Has $7 Trillion Bought Us?

If you don’t read anything else this week, make certain you read 3 Key Metrics That Show Why We Can’t Avoid Recession by Joseph Stuber.

Joseph offers 3 charts that not only show why a recession is coming, but also clearly demonstrates how ineffective fiscal stimulus has been. In part:

The U6 unemployment number in January 2009 was 14.2%. Last month, the number was 14.6%. We have made no gains at all since President Obama took office in 2009 based on that metric. In January 2009, the participation rate was 65.7%. In October 2012, the participation rate was 63.6% — a drop of 2.1%.

The net takeaway from these numbers is that the U6 number would be even worse than it is if the participation rate had remained at 2009 levels. Consider that the BLS doesn’t take into account those workers who have simply given up. If those representing the 2.1% drop in participation rate were included in the number, the U6 figure would be even larger than 14.6%.

$7 trillion in borrowed money and almost $3 trillion in monetary stimulus has accomplished nothing to date to improve the unemployment situation. At what point do we accept reality? Government stimulus is not helping to resolve the problem and is, in fact, going to make it that much worse when natural market forces outweigh all other forces and we enter into a protracted recession.

Exactly. Now go check out ShadowStats.com.

Posted November 26th, 2012 Filed in Economics and the Economy, Unemployment