U.S. economy taking a beating

U.S. economy taking a beating

July 31st, 2011 in Opinion Free Press

It's doubtful that many Americans are taking much comfort in the Obama administration's assurances that our country is in a recovery.

Consider this unflattering snapshot of the economy:

n In the last nationwide unemployment report, the jobless rate rose from 9.1 percent to 9.2 percent. Layoffs were recently at their highest level in nearly a year, and another weak employment report is predicted next month.

* In the latest unemployment reports from the states, joblessness rose in 28 states plus Washington, D.C., stayed the same in 14 states and fell in only eight states. Regionally, unemployment rose from 9.7 percent to 9.8 percent in Tennessee, from 9.8 percent to 9.9 percent in Georgia and from 9.6 percent to 9.9 percent in Alabama.

* Overall economic growth has been weaker than expected -- and much weaker than hoped for -- this year.

* Gasoline prices remain painfully high -- in part because of overseas disruptions that the United States cannot control, but in part because the federal government has imposed undue restrictions on oil exploration and production in this country.

* The housing market remains depressed. Hundreds of thousands of families are facing foreclosure in coming months, on top of millions who have already lost their homes. Home values, meanwhile, remain low, and many mortgage holders owe more than their homes are worth on the market.

The weak housing market prompted this observation from Scott Banks, a cabinet and countertop installer in the Atlanta area: "There is no comparison to five years ago," he told the Atlanta Journal-Constitution. "The difference is, we have gone from running 10 crews to two crews, part time."

The combination of these troubling factors -- plus weak income growth -- is keeping consumer confidence down. That is worrisome because consumer spending accounts for perhaps two-thirds of our nation's gross domestic product, the total annual economic output of the United States. Lack of healthy consumer spending on goods and services hamstrings businesses' ability to expand their operations and hire more workers.

Growth is also hampered by the threat of higher taxes and heavy but still somewhat uncertain new regulations under ObamaCare. Many companies simply do not know whether the federal government is going to impose policies that are going to make it unprofitable to hire new employees.

Washington cannot snap its fingers and get consumers to rush out and start to buy goods and services. But Washington can stop saddling our country with complicated regulations and increased taxes that make it harder for businesses to invest and for our economy to really start recovering.