Friday, October 2, 2009
Unemployment Reaches 26-Year High
Why did Obama waste his time and our money flying to Copenhagen? The graphic above explains it all. Much better to have the Sunday talk shows dominated with the Olympic debacle than this much more important (and damaging) story. The stimulus program has been a catastrophe, and the still ascending unemployment curve proves it.
Judging by the slope we can project measured unemployment to plateau at 10 - 10.5 percent sometime in 1st quarter 2010 (the actual figure may approach 16 percent), this forecast assumes that other liquidity shoe doesn't drop between now and Christmas. Notice that Obama's without stimulus curve has a considerably steeper negative slope than the recovery plan curve. The huge stimulus borrowings must unavoidably compete with private-sector finance, thus slowing the recovery. The argument was essentially "better to have prolonged moderate unemployment than to have very high peak unemployment followed by a more rapid recovery."
The Obama program has done nothing to cap the grow of unemployment and may well have stimulated job loss. Economist will study this for years before an informed opinion is possible. However the expected shallow negative slope is very likely to manifest as predicted but later in time (unemployment reductions in early 1st quarter 2011) and starting from a much higher maximum. This means that in the best-case scenario unemployment in 3rd quarter 20012 will be about 8 percent.
8 percent unemployment coupled with the high inflation that is sure to follow this Administration's absolutely mad deficits bodes ill for the Democrats. In short, BHO is toast.