Embarrassing Images

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(Image: source.)

Although the images featured in the following four reports might make you blush with embarrassment, they are not titillating at all. On the contrary, any red-faced awkwardness you experience after looking at them likely stems from a fleeting sense of knee-jerk empathy for those highly-paid idiots experts who keep saying the economy is nearly back to normal, when clearly it is not.

"Healthy Consumer Relying On $1 Trillion Government Fix" (Investor's Business Daily)

New personal income data from the Commerce Department, which include the impact of the recent 2-percentage-point payroll-tax cut, provide a window into the extraordinary support that the federal government is providing to consumers.

Three props to personal income — higher social insurance benefits, lower tax payments and higher government wages and benefits — are adding just shy of $1 trillion to personal income on an annualized basis relative to pre-recession levels.

...

Those government supports account for the entire $932 billion, or 8.7%, increase in personal disposable income — and then some — since the start of the recession. In other words, government income props, mostly deficit-financed, have paid for all the gains in personal spending and saving.

"Number of the Week: Workers Not Benefiting From Productivity Gains" (Real Time Economics)

0.3% — Increase in U.S. hourly wages, adjusted for inflation, since the economic recovery began.

The labor market may be improving, but U.S. workers have yet to share much in the productivity and profits they’ve helped generate during the recovery.

From mid-2009 through the end of 2010, output per hour at U.S. nonfarm businesses rose 5.2% as companies found ways to squeeze more from their existing workers. But the lion’s share of that gain went to shareholders in the form of record profits, rather than to workers in the form of raises. Hourly wages, adjusted for inflation, rose only 0.3%, according to the Labor Department. In other words, companies shared only 6% of productivity gains with their workers. That compares to 58% since records began in 1947.

 

"Who Are the Unemployed?" (James Pethokoukis Reuters' blog)

From James Glassman of JPMorgan (the purple and red are your worrisome colors):

"America's Budget: The Elephant in the Room" The Economist

THE Republicans want to cut "wasteful" spending; Barack Obama has proposed a spending freeze on discretionary items such as education and national parks. But the big items are the entitlement programmes—Social Security, Medicare and Medicaid—that are set to take up an ever larger part of the American budget. The chart shows the proportion of GDP spent on entitlements and interest, compared with the proportion of GDP that the government is expected to raise in the form of revenues. It originally appeared in USA Inc, an analysis of America's fiscal situation compiled by Mary Meeker for KPCB, a venture capital firm (best known as Kleiner Perkins). The data come from the Congressional Budget Office's "alternative fiscal scenario", which is based on today's underlying fiscal policy but also incorporates some widely expected changes, such as an increase in the threshold for the alternative minimum tax rate. As can be seen, entitlements and interest will absorb all government spending by 2025. But when the CBO did the same sums a decade ago, says Ms Meeker, the critical point was reached in 2060. In short, the fiscal position is deteriorating rapidly.

View the original article here