The question of what to do about the economy is foremost in our minds.  Greece must slash its deficit and increase its tax revenue.  (Oh, I know, if it increases its tax revenue, the deficit will decrease- but in Greece’s case, that is not what is being discussed.)  In America, the Republicans want spending decreased, the Democrats want taxes increased on the ‘rich’- those whose taxable income exceeds $250K or $ 1 million.  The Democratic position is that we are still not growing enough jobs- and while private industry is hiring, our states are slashing jobs at an enormous rate.  The Republicans feel that tax increases on the rich will stop them from hiring.

Of course, most job growth in American normally comes from small business growth.   Where someone with a better idea, a better delivery system, or better customer service, their business grows in size from 1 or 2 people to between 5 to 25 people.  But, right now, small business financing is under a stranglehold- banks really won’t loan them money and venture capital is, let us say, reticent to invest.  Most of the jobs that came this month came from larger firms hiring back some of its employees because they have let their inventories fall to a dangerously low level and must rebuild those stocks.

To make this argument more complex, there is a national election this year.  Where each side must gain points by pointing out the inconsistencies and failures of the other.  Where facts really don’t obtain.  For example, the Republicans claim that the current administration has increased the deficit by $ 4 billion, and where job loss has not recouped under the Obama administration.  The Democrats point out that those targeted for tax increases are not really those who hire individuals en masse- lawyers and doctors, who are, indeed, incorporated, but only to take advantage of liability protection and tax provisions letting them pay much (much, much) less taxes; those who are collecting dividends on large personal wealth; and those who receive compensation that has been manipulated into ‘carried interest’, involving ridiculously low tax rates.

Let’s examine the deficit.  When Obama was inaugurated, the deficit was $10.5 trillion and now it’s about $15.2 trillion.  Of course, that means simple subtraction proves that Obama has raised the deficit by $ 4.7 trillion.  But, that is about as truthful as telling you I have 11 fingers- by counting backwards from 10 on my left hand (to reach 6) and reminding you that my other hand has 5 fingers,, and since 6+5=11, I have 11 fingers.  (Notice the arithmetic is perfectly correct, but the logic is impeccably wrong.) And, using this same method of accounting, Bush increased our deficit by $ 5 trillion between the years 2001 and 2009- at least; $ 1.85 trillion from the tax cuts, at least $ 853 million is accounted for by the Iraq/Afghanistan wars, $ 600 expended to increase defense, $ 650 more for non-defense, $ 350 more for prescription drugs, etc.)

The Republicans want to blame TARP as contributing to the deficit.  You see, TARP cost (or from the Democratic point of view provided) slightly more than $ 800 billion to the economy.  Of course, more than $ 600 billion (I can’t give an exact accounting – which seems to be closer to $ 700, but because those numbers are not yet audited, there is no universal agreement as to their veracity).  Moreover, TARP was passed when Bush was President.  (Notice- that is only 1/6 of the total deficit claimed, as well.)

Let us not forget that the war in Afghanistan (which was augmented by 25% under Obama) and Iraq (which was terminated under  Obama) were started by Bush.  And, no funds were ever generated to pay for these wars.  (Oh, wait, it was all that oil revenue- the revenue that is accruing to those critical allies in the battle to ‘liberate’ Iraq and make the world safe from terrorism- Angola, China, Malaysia, South Korea, Russia, and Turkey, that we were promised would pay our costs- and never did or will.)

But, the Democratic Party did agree to extend the Bush tax cuts for two years- until the end of this year- which has augmented the deficit by $ 620 billion more.  (Of course, the Republicans wanted these made permanent, which would cost some $ 2.7 trillion over the rest of the ten year period.  But, let’s not bring that up now.)  And, if the Democratic Party prevails and does extend the tax cuts for 8 more years or so for all those with $ 250K or less in taxable income, the deficit will be augmented by about $ 1.5 trillion- but that has not yet happened; I will add those funds in as a contingency, when the analysis is complete.)

It seems that laws or directives signed by Obama have added some $ 1 trillion to the deficit up to now- which includes things the unemployment insurance and payroll tax provisions.  But the Budget Control Act will have saved $ 1 trillion.  Oh, and the health care law will save between $ 70 and $ 150 billion.   So, the jury is really out on our deficit position.

And, what about the jury position that really counts?  Let’s see- under Bush- and the first four months of the Obama Administration, where no chance existed to absolutely reverse the Bush policies- job loss was about 6 million; since that time- some 1.5 million jobs have been added (while states have slashed some ½ million jobs- not including those jobs added and removed when the stimulus had effect and expired- right when private sector jobs were disappearing faster than ice cream melts in the Mojave desert).  Oh, and the stock market has doubled its value since Obama became President…

So, where do you stand?  For jobs?  Or to continue slashing money expenditures, so that jobs (like all those state jobs) will evanesce?  (Of course, you could do what the Virginia Governor did- refuse to fund the pensions during your tenure, “saving” that money, so that the next governor will have to pay back that accrued deficit., while claiming a balanced budget- using those critical Federal funds against which you railed.  [Virginia Governors can not run for reelection back-to-back.])

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