More Unexpected Economic News, But Only If You’re an Economist in D.C.
Initial requests for jobless benefits rose last week to their highest level since April, a sign that hiring remains weak and some companies are still cutting workers.
The Labor Department said Thursday that new claims for unemployment insurance rose by 19,000 to a seasonally adjusted 479,000. Analysts had expected a small drop. Claims have risen twice in the past three weeks.
And then, there's Gallup's small business indicator which would portend bad news in the next year:
The Wells Fargo/Gallup Small Business Index - which measures small-business owners' perceptions of six measures of their current operating environment and future expectations - fell 17 points to -28 in July. This is its lowest level since the index's inception in August 2003. (See full index results on page 2.)
That means, of course, that business are contracting and not expanding and therefore will not be hiring and may be firing.
Here's the thing: The bank bailouts delayed the inevitable. Every Friday afternoon, more bank failures are mentioned. And big business and big banks have been propped up, and favored, and the small guys suffer.
Oh, and don't forget Social Security. NPR has this rosy report:
"Social Security is set to run a $41 billion deficit excluding interest income due to the downturn and corrections of excess revenue created to trust funds in past years, the first shortfall since 1983," Reuters reports.
Their combined assets of those trust funds "will be exhausted in 2037," when the number of beneficiaries will surpass the number of workers who pay into program.
What happens then?
"At that time, there will be sufficient tax revenue coming in to pay about 78 percent of benefits," the Social Security Board of Trustees says.
It also projects "that the program costs will exceed tax revenues in 2010 and 2011, be less than tax revenues in 2012 and 2014, and then permanently exceed tax revenues beginning 2015, one year earlier than estimated in last year's report."
The outlook is so grim, in part, because of the economic recession, the board reports.
The Democrats are in a bind. They want to expand government at the exact time when there is no money to do so. They want to restructure America into a socialist dream just as the demographics spell implosion and permanent mediocrity should their dream be fulfilled.
Americans are still waking up to the "grim reality". I'm not sure they've grasped what it will mean for them. They are cutting back and being prudent in these tough times, unlike the government which makes them more in touch with reality than the Democrats.
Crossposted at Liberty Pundits.