The State of the Economy: Whose fault is it and why?

[_Brackite]

Well, the stimulus package sure did Not work within the State that Liberal Democratic Congresswoman Nancy Pelosi is from, which is the State of California. The State of California overwhelmingly voted for Barack Obama for President back in November of 2008. When the stimulus Package was passed by the House and the Senate and signed by President Barack Obama back in February of 2009, California's unemployment rate was at 10.5%. Now California's unemployment rate is as high as 11.8%.
The Following is From Yahoo News:

Report: Los Angeles spent $70 million in stimulus funds to create 7.76 jobs

By John Cook | The Upshot – Fri, Sep 17, 2010

A new piece of evidence has emerged in the debate over the effectiveness of President Obama's 2009 stimulus package, and it's not good for Democrats. According to two newly released audits performed by the Los Angeles controller, L.A. spent enormous portions of the $594 million in stimulus funds it received on projects that created or saved just a handful of jobs. All told, the audits — available here and here [pdf] — examined $111 million in stimulus spending by the city's Department of Transportation and Department of Public Works, and found that the money went to projects that created or retained just 54 jobs. That works out to roughly $2 million per job.

The $71 million that went to the Department of Public Works, which funded 15 road-surfacing and similar projects, was projected to save or create 238 jobs. But according to the audit, the money created just 7.76 jobs — or slightly more than $10 million per new job — and saved 37.7 (the fractions are a result of calculating the number of jobs by hours worked). The Department of Transportation's $40 million created or retained just nine jobs, the audit found.

In a press release accompanying the audits [pdf], L.A. Controller Wendy Greuel said the job numbers were underwhelming. "I'm disappointed that we've only created or retained 55 jobs after receiving $111 million in [stimulus] funds," Greuel said. "With our local unemployment rate over 12 percent, we need to do a better job cutting the red tape and putting Angelenos back to work."

The audit didn't find any misspent funds or waste. But the breakdown of how some of the money was spent seems to indicate efficiency was not exactly the order of the day for project managers. The Department of Transportation, for instance, spent $9 million to install new LED lightbulbs in traffic lights at 1,800 intersections. Less the $228,000 in labor costs associated with the project, that's nearly $5,000 per location to change lightbulbs. Another project spent $4 million to install 65 new left-turn arrows, averaging more than $61,500 per arrow.

Link: http://news.yahoo.com/blogs/upshot/repo ... funds.html




The Following is from the Los Angeles Times:

Solar company Solyndra to close factory, cut jobs
November 3, 2010 | 6:28 pm

It isn’t easy being green for Solyndra Inc., the controversial Bay Area solar power system manufacturing company.

The company said Wednesday that it is shuttering one of its factories to save $60 million in capital expenditures, laying off 40 employees and letting the contracts for more than 100 temporary workers expire.

All this despite a $535-million federal loan guarantee, more than $1 billion in private equity funds and supportive visits from luminaries such as Gov. Arnold Schwarzenegger, Energy Secretary Steven Chu and President Barack Obama.

Solyndra has had a tough year. Its founding chief executive, Chris Gronet, stepped down and the company abandoned plans for a much-anticipated initial public offering because of difficult market conditions.

Now, Solyndra is closing down its first factory just months after opening its second, where the company said expansion will be delayed. Instead of reaching 610 megawatts of production capacity by 2013 as initially planned, the company will aim for up to 300 megawatts.

Competition from other solar panel makers is a major culprit. Manufacturers in Chinaespecially are offering hard-to-beat prices. Solyndra’s cylindrical copper indium gallium selenide solar cells are also more expensive to produce than most.

Perhaps there was a hint at the recent Solar Power International trade show, where Solyndra representatives said that the company planned to cut costs in half over the next year after already halving them over the last eight months.

Then again, they also said Solyndra intended to boost capacity 250% this year and next.

Link: http://latimesblogs.latimes.com/technol ... -jobs.html




China syndrome: California’s Solyndra to close solar factory:
http://thegreenwombat.com/




Those ‘Green jobs’ from the stimulus, which were supposed to stay and expand within the State of California went to China instead.

[_Imnotwashingmypirate]

The aliens that tell the governments what to do? And also whoever invented money. :P

[_Brackite]

California home sales slowed from June to July:
http://www.businessweek.com/ap/financia ... 5CQDO1.htm

Existing home sales fell 3.5 percent in July:
http://www.reuters.com/article/2011/08/ ... TO20110818

US Jobless Claims Up, Gasoline Lifts Consumer Prices:
http://www.cnbc.com/id/44187274

Beaten-down Wall Street slammed by recession fears:
http://finance.yahoo.com/news/Wall-Stre ... 8.html?x=0




The Following information is the news about the Regional and State Employment and Unemployment for the Month of June:

Regional and State Employment and Unemployment
(Monthly) July 22, 2011

In June, 28 states and the District of Columbia reported over-the-month unemployment rate increases, 8 had decreases, and 14 had no change. Nonfarm payroll employment increased in 26 states and the District of Columbia and decreased in 24 states. More »

Link: http://www.bls.gov/lau/




The News about the Regional and State Employment and Unemployment for the Month of July are scheduled to be issued tomorrow.

[_Bond James Bond]

Brackite,

the point is that unemployment slowed not that it reversed. 700 billion dollars in spending is not enough to turn unemployment around. Frankly we needed (and continue to need) far more domestic stimulus.

[_Yoda]

JG--

My uncle sent me this email. It contains the best explanation of the budget problems I have seen to date:

Federal Budget 101



The U.S. Congress sets a federal budget every year in the trillions of dollars. Few people know how much money that is so we created a breakdown of federal spending in simple terms. Let's put the 2011 federal budget into perspective:



U.S. income: $2,170,000,000,000
Federal budget: $3,820,000,000,000
New debt: $1,650,000,000,000
National debt: $14,271,000,000,000
Recent budget cut: $ 38,500,000,000 (about 1 percent of the budget)


It helps to think about these numbers in terms that we can relate to. Let's remove eight zeros from these numbers and pretend this is the household budget for the fictitious Jones family.


Total annual income for the Jones family: $21,700
Amount of money the Jones family spent: $38,200
Amount of new debt added to the credit card: $16,500
Outstanding balance on the credit card: $142,710
Amount cut from the budget: $385




So in effect last month Congress, or in this example the Jones family, sat down at the kitchen table and agreed to cut $385 from its annual budget. What family would cut $385 of spending in order to solve $16,500 in deficit spending?

It is a start, although hardly a solution.

Now after years of this, the Jones family has $142,710 of debt on its credit card (which is the equivalent of the national debt).

You would think the Jones family would recognize and address this situation, but it does not. Neither does Congress.

[_Brackite]

California unemployment rises in July to 12%:
http://www.latimes.com/business/la-fi-c ... 9654.story

[_Bond James Bond]

You would think the Jones family would recognize and address this situation, but it does not. Neither does Congress.

In that analogy people always assume that we should be cutting spending in our house, but no one ever says that we should go out and get a second job. In this context that second job is called added revenue, a.k.a. taxes.

Now our current revenue is about 2.2 trillion give or take a few mil. We're spending 3.8 trillion. At our current revenue levels we have to cut spending by around 43%. Despite what many people think, 43% of our spending is not on social welfare and the National Endowment for the Arts.

Budget: http://www.whitehouse.gov/omb/budget (with basic visual breakdown for the visually stimulated):

% of budget (caveat: budget percentages taken from Obama's proposed 2012 budget, but historically programs track at about the same rates of 20% each for Medicare/caid, SS, and Defense give or take a few percentage points.):
Medicare/Medicaid: 22.62%
Social Security: 20.04%
Defense: 19.27% (plus 3.26% for veterans) for 22.53% total

For the republicans who love to talk about cutting these "biggies":

Education: 2.77%
Unemployment: 2.52%
Food assistance (food stamps/WIC/etc): 2.83%
humanitarian foreign aid 0.78%

for past budgets go to: http://www.gpoaccess.gov/usbudget/browse.html

(And so on and so forth...as you can see the bulk of the budget is Defense/Medicare/Medicaid/SSecurity although interest on debt is increasing every year.)

To cut 43% of our budget (to get 3.8 trillion in spending down to 2.2 trillion), we are going to have to make cuts in Medicare/Medicaid and Defense. Social Security has its own revenue model that will be solvent through at least 2037 (and beyond with minor tweaks). Basically Social Security should be taken off the table for the moment. But all polls pretty much show no one wants to cut either defense or medicare, people would rather have increased taxes.

Now the question that emerges is what is the alternative: tax increases or cutting Medicare(caid)/Defense? I say tax the rich. The rich have been accumulating trillions in wealth the past thirty years as low tax levels have fueled the income disparity we currently face. What do you people think?

[_Yoda]

Define "the rich".

[_Bond James Bond]

Define "the rich".

Let's say households making 1,000,000 a year for starters.

[_Brackite]

Brackite,

the point is that unemployment slowed not that it reversed. 700 billion dollars in spending is not enough to turn unemployment around. Frankly we needed (and continue to need) far more domestic stimulus.

Dear Bond,

The State of California is one of the most fiscally liberal State in the Nation. During the last election in November of 2010, all of the Democrats running for State offices won. Liberal Democratic U.S. Senator Barbara Boxer, won her re-election to the U.S. California Senate seat. The State of California got a whole lot of money from the stimulus Package. Yet, California has an Unemployment rate now as high as 12%. If fiscal liberalism is the way to go, then why does California now have such an high Unemployment rate???