Monday, December 26, 2011

The economy illuminated

There is no need to be confused by the flurry of claims about economic policy, inequality, the national debt, and unemployment. It's really pretty simple to sort through the b.s. if you understand the data. Luckily, James Pethokoukis does understand the data and has provided the seven most illuminating charts. They provide six straightforward lessons:
  1. The Administration thought that its recovery plan would have reduced unemployment to 6% by now. It currently stands at 8.6%.
  2. The usual unemployment rate understates the true level of unemployment. If you include the millions of workers who have given up looking for work, the unemployment rate would be over 11% with a steady upward trend since the Administration's policies started to kick in.
  3. Although the President has claimed that the middle class has gotten nowhere because pro-market policies of the past 30 years, these policies have meant a 50% increase in median income since 1980.
  4. Wealth inequality has been fairly constant for nearly 30 years.
  5. The President's pro-government recovery is substantially weaker than the pro-private sector ones of recent decades.
  6. Our debt problem is worse than portrayed because standard projections ignore the growth effects of tax and spending policies (i.e., they use static rather than dynamic scoring).