I am enraged at the D.C. cesspool and WisGOP's inabilities to tell the truth on why we have a debt and deficit problem in the first place- a drop in jobs and benefits that required additional government spending on stabilizers such as unemployment and Medicaid, and a lack of tax revenues resulting from 1. fewer people working and 2. tax cuts given to the "haves" who have seen their incomes stay strong and even grow while the majority of the nation has fallen behind.
The new GDP reports that came out Friday reiterated this. James Hamilton's breakdown at Econbrowser gives the info in a easily-digestible way, and it shows that not only has the U.S.'s growth slowed significantly in the first 6 months of this year, with growth of only 0.4% in Q1 and 1.3% in Q2. Consumption and fixed-investment growth have remained slow, and government spending cuts are reducing what's already a low number.
But perhaps even more alarmingly, the Commerce Department also released revisions to previous year GDP that showed the 2007-2009 recession was even worse than what was previously let on. For example, the 2nd chart on Hamilton's page shows that the drop in real GDP was nearly $200 billion more from peak to trough, totalling a 5.2% loss in activity, and that the country still hasn't gotten back to the levels of output we were at 4 years ago. When you think about how the U.S. population grows, that 5.2% drop becomes even more stunning.
So that combination of dropping production and the correlating loss of 8.7 million jobs over 2 years killed tax revenues, as I mentioned last week. The only thing that hasn't gotten killed in the last 4 years? Corporate profits. The BEA's own analysis (with the link to the spreadsheet is near bottom of the page), shows that there has been a $431.7 billion INCREASE in corporate profits from the end of 2007, which is at the same time that national production has gone down. Even more egregiously, the BEA says about 60% of that increase is due to tax changes in the last 4 years, and that those profits have more than doubled since Obama took office at the start of 2009. Needless to say, those expanded profits through tax breaks have been hoarded and have not trickled down to the average American citizen, and instead have been funneled to the rich over the last 40 years, and especially since the second Bush tax cuts were signed in 2003, as this graph starkly shows .
So why are we not concentrating on the real causes of our deficit and debt issues- reduced jobs, profit-hoarding, and a tax-code that encourages gambling and outsourcing over real job-creation, wage growth, and a vibrant middle class? Other than the scary thought that D.C. and Wall Street oligarchs completely have taken over not only our wealth and politics, but also our media through their propaganda networks. It means we have to be even more out in front of the lies that are being spread by the corporatists who do not care what happens to the country at large, but only care for money and power for themselves and the politicians they control.
Because the hidden story behind the Wisconsin protests this year is that a lot of people were drawing the line between corporate corruption of government, and the destroying of workers' rights and the standard of living for the middle class. Our corproate media didn't want to bring it up (because it would indirectly turn the spotlight on themselves and their sponsors), but it was clearly there. I don't think the corporatists want us to fall back into recession and have it explode into full-fledged revolt. For the sake of these self-centered greedheads, they'd better hope that they get stopped at the ballot box over the next 2 years...or else it may be the guillotine in later years.