Friday, December 25, 2015

Holiday Blues...... for next year.

Holidays like Christmas can be stressful. For the average American the reach of the American dream is boiling away .  Here’s the truth about Obama’s economic “recovery” summed up . The $1 trillion growth gap. This economic recovery is the slowest in 50 years. If we had had the same pace of improvement since June 2009 when the recession ended as in an average recovery, national output and incomes would be more than $1 trillion larger today. In other words, we would have about $10,000 more income per family than we do.The raiseless recovery. It’s been 10 years since Americans in the middle class got a pay raise that kept pace with inflation. Median income households today make $1,500 less than they did even since the recession officially ended. (1)>>The recession really hasn’t ended for half of all families. Inequality is worse. President Obama has made closing the gap between rich and poor his highest priority. Guess what? The Gini coefficient (as measured by the Census Bureau), the left’s favorite measure of income inequality, rose each of Mr. Obama’s first four years in office, breaking all-time highs in both 2011 and 2012, and it remains high. The American dream goes bust. Double dip is not a term that a government keen to extricate itself from the economic-crisis-management business likes to hear. A couple of weeks ago, the Obama Administration was poised to switch to growth mode. Then the ugly data started pouring in like the overflowing Mississippi. First-quarter GDP numbers showed a measly 1.8% increase, well short of the expectations of above 3%, and second-quarter estimates are not much better. Then came a report on housing-price declines that have not been seen since the Great Depression, followed by reports of consumer spending at six-month lows and weak manufacturing surveys. Obamacare might be hitting hard next year with the (**)>> mandatory penalties regarding non enrollees.  The only reason the “Affordable” Care Act is even remotely affordable to anyone is because of the tens of billions of dollars in subsidies it hands out to about 6.4 million enrollees.Obamacare’s backers are quick to point out that these rate requests aren’t final — and that states often dial them back.But what they don’t say is that these rates are based on hard, historical data — actual claims experience. As insurance industry expert Robert Laszewski said, A 35 percent rate increase is hardly going to be rolled back to 5 percent.”Spiraling premiums are precisely what critics said would happen once Obamacare’s benefit mandates, taxes, fees, and regulations took effect. This may seem redundant, given all of the attention to huge price spikes in the ObamaCare exchanges in states like Minnesota (between 34-50% for most plans) and Mississippi (over 60%). Even CBS News has begun to wake up to the rapidly escalating costs of insurance in the so-called Affordable Care Act exchanges. Yet ObamaCare advocates argue that these price explosions are localized and not indicative of the overall direction of premium prices in 2016. Social Security , no one is getting a raise . The lame excuse , For the third time this decade, Social Security recipients won’t be seeing an annual cost-of-living adjustment.Blame soft inflation, including the nearly 30% drop in gas prices over the past year. The official price measure used to calculate the annual living-cost adjustment was down 0.4% from last year’s level in the third quarter, the Labor Department said .The second biggest cost of home ownership — following the mortgage — is usually property taxes. In 2012, U.S. homeowners paid an average of about $2,800 in property taxes, according to a recent Zillow study. And if you live in New York, New Jersey, or Colorado your taxes were in some cases five times more than the national average. The numbers are based on an average of real estate taxes paid on single family housing since 2012.The middle class hasn’t experienced the recovery that the mathematical equations of economics says it has. Evidence of that includes high debt, low borrowing, and low wages as well as still-high unemployment and people dropping out of the labor force. US households are struggling with high debt. American households have $8.38tn of loans to pay back, including mortgages, which as much as they owed in 2007 just before the financial crisis. Mortgage loans are still hard to get, meaning that those with houses will have trouble moving for a new job; with mortgages hard to get, housing costs at near-record levels, and paychecks stagnant, the financial benefit of moving for a job is half what it was a few decades ago. Those economists could do more to acknowledge how far from a real recovery we are. Promising things will get better eventually doesn’t really work when Americans are thinking about how to pay the bills today. 

(**)>> mandatory penalties regarding non enrollees. The Affordable Care Act imposed penalties for those not having qualifying health care coverage. Those penalties started at $95 per adult, or 1% of income above the filing threshold in 2014, but they rose to $285 per adult, or 2% of income above the filing limit in 2015. For 2016, penalties will rise again, hitting $695 per adult, or 2.5% of income. A family maximum will apply to the per-person amount, but the $2,085 amount will be substantially higher than the $975 in 2015, and the $285 in 2014.  (1)>>The recession .The federal government took in a record of approximately $3,248,723,000,000 in taxes in fiscal 2015 (which ended on Sept. 30), it is also up about $212,927,100,000 in constant 2015 dollars from the $3,035,795,900,000 in revenue (in 2015 dollars) that the Treasury raked in during fiscal 2014.So even as the Treasury was hauling in a record $3,248,723,000,000 in tax revenues in fiscal 2015, the federal government was spending $3,687,622,000,000. The federal government ran a deficit of $438,899,000,000 for the fiscal year.

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