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# What is All This Debt Getting Us?

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### What is All This Debt Getting Us?

1. 1. \$0.00 \$0.10 \$0.20 \$0.40 \$0.50 \$0.60 \$0.70 \$0.90 \$0.30 \$0.80 1966-01-01 1967-02-01 1968-03-01 1969-04-01 1970-05-01 1971-06-01 1972-07-01 1973-08-01 1974-09-01 1975-10-01 1976-11-01 1977-12-01 1979-01-01 1980-02-01 1981-03-01 1982-04-01 1983-05-01 1984-06-01 1985-07-01 1986-08-01 1987-09-01 1988-10-01 1989-11-01 1990-12-01 1992-01-01that our economy produces, we borrowed 80 cents. 1993-02-01 Debt Incurred per Dollar of GDP 1994-03-01 1995-04-01 1996-05-01 1997-06-01 1998-07-01 1999-08-01 2000-09-01 2001-10-01 2002-11-01 2003-12-01 2005-01-01 2006-02-01 2007-03-01GDP – by the end of 2008 this number grew to 80 cents. So for every dollar 2008-04-01As of 1966 the United States incurred about 42 cents of debt for every dollar of
2. 2. \$0.00 \$0.10 \$0.30 \$0.40 \$0.50 \$0.60 \$0.20 1980-04-01 1980-07-01 1980-10-01 1981-01-01 1981-04-01 1981-07-01 1981-10-01 1982-01-01 1982-04-01 1982-07-01 1982-10-01 1983-01-01 1983-04-01 1983-07-01 1983-10-01 1984-01-01 1984-04-01 1984-07-01 1984-10-01 1985-01-01 1985-04-01 1985-07-01 1985-10-01cents for every dollar that the US economy generated. 1986-01-01 1986-04-01 1986-07-01 Dollar of Debt per Dollar of GDP Under Reagan 1986-10-01 1987-01-01 1987-04-01 1987-07-01 1987-10-01 1988-01-01 1988-04-01 1988-07-01Under President Reagan, this number grew from about 32 cents per dollar ofGDP to just over 50 cents. During his presidency, Ronald Reagan borrowed 71 1988-10-01 1989-01-01
3. 3. Dollar of Debt per Dollar of GDP Under Bush II \$0.68 \$0.66 \$0.64 \$0.62 \$0.60 \$0.58 \$0.56 \$0.54 \$0.52 \$0.50 2001-04-01 2001-10-01 2002-01-01 2002-04-01 2002-10-01 2003-01-01 2003-04-01 2003-07-01 2003-10-01 2004-01-01 2004-04-01 2004-07-01 2005-01-01 2005-04-01 2005-07-01 2005-10-01 2006-01-01 2006-04-01 2006-07-01 2006-10-01 2007-04-01 2007-07-01 2007-10-01 2008-01-01 2008-04-01 2008-07-01 2008-10-01 2009-01-01 2001-07-01 2002-07-01 2004-10-01 2007-01-01Under George W. Bush, this number continued to grow, as we borrowed 66cents for every dollar of GDP by the end of his second term. In 8 years, GeorgeW. Bush borrowed \$1.42 for every dollar that our economy generated – thismeans that we were growing our debt faster than our economy was growing
4. 4. \$0.00 \$0.20 \$0.40 \$0.60 \$0.80 \$1.00 \$1.20 2009-04-01 2009-05-01 2009-06-01 2009-07-01 2009-08-01 2009-09-01 2009-10-01 2009-11-01 2009-12-01 2010-01-01 2010-02-01 2010-03-01 2010-04-01 2010-05-01 2010-06-01 2010-07-01 2010-08-01 2010-09-01 2010-10-01 2010-11-01 2010-12-01 2011-01-01 2011-02-01 2011-03-01 2011-04-01 2011-05-01 2011-06-01 Dollar of Debt per Dollar of GDP Under Obama 2011-07-01 2011-08-01 2011-09-01 2011-10-01 2011-11-01 2011-12-01 2012-01-01 2012-02-01 2012-03-01 Obama has borrowed \$2.84 for every dollar generated by our economy. compounded annual growth rate of 6.4%. Since he took office, President dollar that our economy generates. In 4 years, this number has grown at a 2012-04-01The United States, under President Obama, is now borrowing \$1.02 for every
5. 5. Here is a Side-by-Side Comparison of Each President’s First Term5000.0 \$2.84 \$3.004500.0 \$2.504000.03500.0 \$2.003000.02500.0 \$1.502000.0 \$0.81 \$1.001500.0 \$0.72 \$0.571000.0 \$0.50 500.0 0.0 \$0.00 Reagan Clinton GWB Obama Incremental GDP Incremental Debt Debt per Dollar of GDP (Right Axis)
6. 6. What do We Have to Show for All This Debt?
7. 7. More Jobs? Non-Farm Payrolls144,000143,000142,000141,000140,000139,000138,000137,000136,000135,000 Oct-09 Oct-10 Oct-11 Apr-09 Apr-10 Apr-11 Apr-12 Jan-09 Jan-12 Jan-10 Jan-11 Jul-09 Jul-12 Jul-10 Jul-11A Rocking .15% Annual Growth Rate
8. 8. More Full-Time Jobs? Non-Farm Payrolls: Full-Time Jobs 117,000 116,000 115,000 114,000 113,000 112,000 111,000 110,000 109,000 108,000 107,000 Oct-09 Oct-10 Oct-11 Apr-09 Apr-10 Apr-11 Apr-12 Jan-09 Jan-12 Jan-10 Jan-11 Jul-09 Jul-12 Jul-10 Jul-11We in Fact have LESS Full-time Jobs – Allthe Jobs Created Since 2009 Have Been Part-Time Jobs
9. 9. At Least Reagan Created Some Jobs with The Debt he Incurred Non-Farm Payrolls 108,000 106,000 104,000 102,000 100,000 98,000 96,000 94,000 Oct-81 Oct-82 Oct-83 Apr-81 Apr-82 Apr-83 Apr-84 Jan-81 Jan-84 Jan-82 Jan-83 Jul-81 Jul-84 Jul-82 Jul-83An Increase of 5.5 Million Jobs at the Same Point in His Presidency – 4.5Million of Which Were Full-time Jobs
10. 10. Higher Stock Prices?
11. 11. 0.00 0.20 0.40 0.60 0.80 1.00 1.20 2009-01-01 2009-04-01 2009-07-01 2009-10-01 2010-01-01 2010-04-01 2010-07-01 2010-10-01 2011-01-01 2011-04-01 2011-07-01 S&P 500 Priced in Gold 2011-10-01 Gold than in 2009! 2012-01-01 2012-04-01 2012-07-01 2012-10-01One Share of the S&P 500 Buys LESS Not When Priced in Ounces of Gold!
12. 12. And Not When Priced in Barrels of Oil! S&P 500 Priced in Oil 25.0 20.0 15.0 10.0 5.0 0.0 One Share of the S&P 500 Buys 25% LESS Oil than in January of 2009!
13. 13. But Personal Incomes are up, Right? Real Disposable Personal Income \$10,400 \$10,300 \$10,200 \$10,100 \$10,000 \$9,900 \$9,800 \$9,700 \$9,600 \$9,500 \$9,400 \$9,300 2009-01-01 2009-04-01 2009-07-01 2010-01-01 2010-07-01 2010-10-01 2011-01-01 2011-04-01 2011-10-01 2012-04-01 2012-07-01 2009-10-01 2010-04-01 2011-07-01 2012-01-01By .72% Per Year – Less Than the Rate of Inflation
14. 14. Is This What a Recovery Looks Like? Labor Force Participation Rate66.0%65.5%65.0%64.5%64.0%63.5%63.0%62.5%62.0% Oct-09 Oct-10 Oct-11 Apr-10 Apr-11 Apr-09 Apr-12 Jan-10 Jan-11 Jan-09 Jan-12 Jul-09 Jul-10 Jul-11 Jul-12
15. 15. Perhaps a Longer View Might HelpLabor Force Participation Rate is the Lowest it’s Been in 30 Years
16. 16. Four Years of Hope and Reckless Borrowing and Spending… AND NO NEW JOBS WE NEED MORE THAN HOPE
17. 17. Sources• Federal Reserve Economic Data – http://research.stlouisfed.org/datatools.html• Bureau of Labor and Statistics – http://bls.gov/webapps/legacy/cpsatab9.htm