US Economic News Today – None of It Good for Obama, or America

Senator Jeff Sessions (R-Alabama), ranking member of the Senate Budget Committee, released this graph today that puts the US per capita debt into perspective.  (Click to enlarge)

Notice how we stack up against countries such as Greece, which is experiencing riots as a result of its austerity measures put into place to curb its economic downward spiral.  This has been done in response to the demands of the EU, particularly Germany – the most powerful and still-solvent country of the economic alliance that controls the monetary systems of the various countries through the Euro.  The other countries have been linked together under the acronym of PIIGS (Portugal, Ireland, Italy, Greece, Spain) as a brief collective word for the Euro economies in dire shape, with the French situation thrown in for good measure.

The difference here is that there is a European Union to put the brakes on the profligate spending by these members that has led to this melt-down.  The US has no such mechanism other than the government and the Fed, and we see no inclination to stop.  The answer in the US is not to curb spending, but instead to increase taxes on its own citizens (those who still pay, that is, as opposed to the almost 50% of us who do not) and borrowing from competing nations such as China.

As for total national debt, news today predicts that we should blow past our current debt ceiling of $16.4 trillion before the election next November.  Part of Obama’s budget deal was to put that safely past Election Day.  He will have a lot of explaining to do on that note, whereas he expected to dodge that bullet for campaign season.

The Budget Committee also reveals that within the next ten years, per capita debt is expected to increase to $75,000.  Incidentally, Obama’s own 2013 budget proposal has the national debt standing at $25 trillion by 2021.

In other news, Press Secretary Jay Carney is glad to trumpet how oil drilling is up for each year of the Obama administration, but answers questions of how some control can be put on the quickly upward spiraling gas prices by warning that changes put into effect now can take years.  The administration can’t have it both ways: the oil output seen now is the result of changes put into place under the Bush administration.  The increase in oil production is in spite of, not because of, efforts by Obama.

The Wall Street Journal takes Obama’s word that “the American people aren’t stupid”, and proceeds to explain how that is a problem for him.  For example (to whet your appetite for an article that needs to be read in full):

The reality is that most of the increase in U.S. oil and gas production has come despite the Obama Administration. It is flowing from the shale boom, which is the result of private technological advances and investment. Mr. Obama has seen the energy sun rise and is crowing like a rooster that he made it happen.

Mr. Obama yesterday also repeated his proposal that now is the time to raise taxes on oil and gas companies, as if doing so will make them more likely to drill. He must not believe the economic truism that when you tax something you get less of it, including fewer of the new jobs they've created.

Jack Gerard, CEO of the American Petroleum Institute, said today on Fox News with Megyn Kelly that these increases have been seen on private and state land, not federal.  On federal leases such as the Gulf of Mexico, production is down 30%.  Lease sales in the Rocky Mountains on federal lands are down 70%.  Some 85% of the Atlantic and Pacific continental shelf is off limits.  Only 3% of the available areas under federal control are under production, but North Dakota, using private and state lands, produces some 450,000 barrels per day and has unemployment at 3.3%, the lowest in the country.  With the proven reserves found in the US and Canada, we both could be energy self-sufficient within twelve to fifteen years if we had sufficient political will.

 I certainly hope that Obama's claim that the American people aren't stupid holds true on Election Day next November.