" It's All In The Numbers". A Thread Inspired By Aartie.

[blackrock13]

Pie in the sky or a lie?

From; http://www.politifact.com/truth-o-m...omney-says-500000-net-jobs-month-historicall/

Mitt Romney says creating 500,000 net jobs a month is historically 'normal'

With the economy struggling to recover from the last recession, the monthly job reports from the Bureau of Labor Statistics have become key opportunities for both parties to spin the results to their advantage.

And right on cue, the release of the most recent statistics on May 4, 2012 -- showing a gain of 115,000 jobs over the previous month -- prompted politicians and their allies to pounce.

Shortly after the numbers for April 2012 were released, Mitt Romney went on Fox News to offer commentary. He told Fox & Friends co-host Gretchen Carlson, "We should be seeing numbers in the 500,000 jobs created per month. This is way, way, way off from what should happen in a normal recovery."

We decided to look at two parts of this comment. Is creating 500,000 jobs in a recovery "normal"? And are the job creation figures under President Barack Obama "way, way, way off from" whatever the normal amount is?

We’ll take these two issues in order. (The Romney campaign did not respond to an inquiry for this story.)

Is 500,000 jobs created per month normal for a recovery?

The short answer is "no."

We arrived at this conclusion by looking at the net monthly change in jobs all the way back to 1970. Since Romney was referring to total jobs, rather than private-sector jobs only, we used total jobs as our measurement. And since Romney was talking about job creation patterns during a recovery, we looked only at job creation figures for non-recessionary periods, as defined by the National Bureau of Economic Research. Finally, we excluded the current recovery.

The totals below refer to the percentage of months that produced job creation totals in the given ranges over the 386 non-recessionary months since 1970:

500,000 jobs or more per month: 1 percent of months
400,000 to 499,999 jobs per month: 5 percent of months
300,000 to 399,999 jobs per month: 17 percent of months
200,000 to 299,999 jobs per month: 29 percent of months
100,000 to 199,999 jobs per month: 23 percent of months
0 to 99,999 jobs per month: 15 percent of months
Negative jobs created in a month: 10 percent of months

Given these statistics, we think it’s hardly "normal" during a recovery to create 500,000 jobs in a month -- it only happened 1 percent of the time. Nor for that matter is it "normal" to produce 400,000 jobs or 300,000 jobs in a month -- the median is somewhere in the low 200,000 range.

So on this point, Romney is wrong.

However, we also decided to run a set of numbers adjusted for the size of the labor force. Due to population growth and changing patterns of employment, the labor force has almost doubled since 1970. For this calculation, we looked at how common it was to reach a lower job-creation threshold that approximated what 500,000 jobs would be today. Here’s what we came up with.

300,000 jobs or more per month in the 1970s: 35 percent of months
400,000 jobs or more per month in the 1980s: 6 percent of months
400,000 jobs or more per month in the 1990s: 5 percent of months
500,000 jobs or more per month between 2000 and 2007: Level never reached

So, even during the decade with the most robust job growth, the 1970s, it was not "normal" to reach a threshold that’s analogous to today’s 500,000 jobs created per month -- it happened about one-third of the time. And in the 1980s, 1990s and 2000s, it was even less common -- the likelihood of reaching an analogous threshold was never higher than 6 percent.

All told, then, Romney is exaggerating "normal" job creation for a recovery.

Is job creation under Obama "way, way, way off" from the normal amount?

It depends on what you consider the "normal" amount.

Let’s first compare Obama’s record to what happened in all recoveries between 1970 and 2007.

During the 34 non-recessionary months on Obama’s watch, the median monthly change in jobs has been 110,000, which is approximately half of what it was between 1970 and 2007. And even if you adjust for the severity of the last recession by starting the count in January 2010 -- a year after Obama took office -- the median job increase becomes 120,000. That’s not much of an improvement.

As we‘ve already noted, the median job increase in previous recoveries is in the low 200,000s. But Obama’s median job increase is 110,000. So Romney is correct when he notes that job growth is not matching the pace of previous recoveries during the past four decades.

But by another comparison, Obama does better. If you compare Obama’s record to that of his most immediate predecessor -- President George W. Bush -- Obama’s median monthly job growth exceeded Bush’s, which was 95,000.

How good do the job-creation numbers need to be?

Gary Burtless, a labor economist at the Brookings Institution, said the economy needs roughly 90,000 to 100,000 new jobs every month to keep up with the growth in the working age population.

"If job growth exceeds that threshold, we’re making progress toward bringing employment up to the full-employment level," Burtless said. (As we’ve noted before, Burtless contributed $750 to Obama’s campaign in 2011. However, in 2008 he provided advice on aspects of labor policy to the presidential campaign of Sen. John McCain, R-Ariz., and he has worked as a government economist and served on federal advisory panels under presidents of both parties.)

Burtless said that if you set a target unemployment rate of 4.5 percent (the current rate is 8.1 percent) and aim for a similar labor participation rate to the pre-recession level of 2007, "it would be truly excellent – though improbable – if we could add 500,000 jobs a month. But adding 200,000 a month would probably satisfy the electorate, and adding 300,000 a month is not out of the question."

Our ruling

Romney has a point that job creation under Obama has fallen well short of historical medians, at least going back to 1970. But job creation under Obama has exceeded the levels achieved during the George W. Bush administration. And Romney’s claim that 500,000 jobs a month is "normal" is way off. On balance, we rate the claim Half True.

 

[blackrock13]

Apparently the Republican supporters have nothing to add.

Try this. Another lie debunked? Unfortunately graphs don't post in P&IA forum.

http://www.factcheck.org/2012/06/obamas-spending-inferno-or-not/Obama’s Spending: ‘Inferno’ or Not?

Spending is high by historical standards -- but rising slowly. And revenues are low.Posted on June 4, 2012 , Updated on June 7, 2012


Summary

Is President Obama’s spending an “inferno,” as Mitt Romney claims, or a binge that “never happened” as an analysis touted by the White House concluded? We judge that both of those claims are wrong on the facts.​

The truth is that the nearly 18 percent spike in spending in fiscal 2009 — for which the president is sometimes blamed entirely — was mostly due to appropriations and policies that were already in place when Obama took office.
That includes spending for the bank bailout legislation approved by President Bush. Annual increases in amounts actually spent since fiscal 2009 have been relatively modest. In fact, spending for the first seven months of the current fiscal year is running slightly below the same period last year, and below projections.
Since pictures can convey information more efficiently than words, we’ll sum up the official spending figures in this chart. It also reflects our finding that Obama increased fiscal 2009 spending by at most $203 billion, accounting for well under half the huge increase that year.
So if current spending is an “inferno,” it’s one that Bush (and Congress) is mostly responsible for starting. But it’s also true that Obama has done little to put it out.
Spending under Obama remains at a level that is quite high by historical standards. Measured as a percentage of the nation’s economic production, it reached the highest level since World War II in fiscal 2009, and has declined only slightly since.
And there’s more spending to come: The health care law Obama signed in 2010 calls for a new wave starting in 2014, to subsidize coverage for millions who wouldn’t otherwise have it. That will be adding an estimated $110 billion to federal outlays in fiscal 2015, and more in later years.
But note also that receipts are running at levels that are well below historical averages. It is the combination of historically high spending and low revenues that is producing the current string of trillion-dollar annual deficits, and piling up debt. Those who blame deficits solely on spending ignore the other side of the ledger.
Analysis

Mitt Romney claims President Barack Obama’s spending amounts to an “inferno.” But who is really responsible for the huge jump that took place in fiscal 2009?Here are some undisputed facts:

• Fiscal 2009 began Oct. 1, 2008. That was before Obama was elected, and nearly four months before he took office on Jan. 20, 2009.
• President Bush signed the massive spending bill under which the government was operating when Obama took office. That was Sept. 30, 2008. As The Associated Press noted, it combined “a record Pentagon budget with aid for automakers and natural disaster victims, and increased health care funding for veterans returning from Iraq and Afghanistan.”
• Bush also signed, on Oct. 3, 2008, a bank bailout bill that authorized another $700 billion to avert a looming financial collapse (though not all of that would end up being spent in fiscal 2009, and Obama later signed a measure reducing total authorized bailout spending to $475 billion).
• On Jan. 7, 2009 — two weeks before Obama took office — the nonpartisan Congressional Budget Office issued its regular budget outlook, stating: “CBO projects that the deficit this year will total $1.2 trillion.”
• CBO attributed the rapid rise in spending to the bank bailout and the federal takeover of Fannie Mae and Freddie Mac – plus rising costs for unemployment insurance and other factors driven by the collapsing economy (which shed 818,000 jobs in January alone).
• Another factor beyond Obama’s control was an automatic 5.8 percent cost of living increaseannounced in October 2008 and given to Social Security beneficiaries in January 2009. It wasthe largest since 1982. Social Security spending alone rose $66 billion in fiscal 2009, and Medicare spending, driven by rising medical costs, rose $39 billion. ........

​

 

[blackrock13]

.........How Much Did Obama Add?
But it’s also true that Obama signed a number of appropriations bills, plus other legislation and executive orders, that raised spending for the remainder of fiscal 2009 even above the path set by Bush. By our calculations, Obama can be fairly assigned responsibility for a maximum of $203 billion in additional spending for that year.
It can be argued that the total should be lower. Economist Daniel J. Mitchell of the libertarian CATO Institute — who once served on the Republican staff of the Senate Finance Committee — has put the figure at $140 billion.
Ordinarily, an incoming president has little or no influence over spending that was approved under his predecessor. So in normal circumstances, all spending for fiscal year 2009 would have been rightly tied to Bush, and fiscal 2010 would be the first year for which Obama would have prepared a budget and signed the major spending bills. And for the most part, big spending programs that require no yearly appropriations, including Social Security and Medicare, did indeed continue to operate during fiscal 2009 under the policies in effect under Bush.
But in Obama’s case, he quickly pushed through Congress and signed a large economic stimulus measure containing a combination of tax cuts and new spending in fiscal 2009. And while Bush had signed full-year appropriations for the Pentagon, the Department of Homeland Security and veterans programs, he had left the remainder of government agencies that need annual appropriations funded only through March 2009.
Here’s how we arrived at our $203 billion total: We combed through all the appropriations bills signed by Obama for 2009, plus other legislation that CBO said also resulted in increased spending. We also examined the budget effects of Obama’s decision to bail out General Motors and Chrysler using funds previously appropriated under TARP. And here’s what we found:

• $2 billion for children’s health insurance. On Feb. 4, Obama signed a bill expanding the Children’s Health Insurance Program, covering millions of additional children (a Democratic bill Bush had vetoed in the previous Congress). “CBO estimates that the act will increase mandatory outlays by $2 billion in 2009,” CBO later stated (page 5).
• $114 billion in stimulus spending. Obama signed the stimulus bill Feb. 17. While headlines proclaimed a $787 billion price tag, about 27 percent of the total was actually for tax cuts, not spending. And most of the spending didn’t take place until after fiscal 2009. CBO initially put the total spent in fiscal 2009 at $107.8 billion, but the following year it revised the figure upward to $114 billion, in a report issued in August 2010 (page 13).
• $32 billion of the “omnibus” spending bill Obama signed on March 11, 2009, to keep the agencies that Bush had not fully funded running through the remainder of the fiscal year. The $410 billion measure included $32 billion more than had been spent the previous year, according to a floor statement by Rep. Jerry Lewis of California, the top-ranking Republican on the Appropriations Committee. (See page H2790 in the Congressional Record.) “An 8 percent—or a $32 billion—increase in 1 year on top of the stimulus package is simply unnecessary and unsustainable,” he declared.
  A case can be made that Obama shouldn’t be held responsible for the entire $32 billion increase. The $410 billion was only $20 billion more than Bush had requested, according to Rep. David Obey of Wisconsin, the appropriations chairman. (See page H2800.) And CBO later figured the increase amounted to only $9 billion over what it was projecting on the assumption that the levels Bush approved for the first part of the year would be extended for the entire year (page 5).
  But it was Obama who signed the bill, so we assign responsibility for the full annual increase to him, not Bush.
• $2 billion for deposit insurance. The “Helping Families Save Their Homes Act” that Obama signed May 20 had among its many provisions some changes to the federal program that insures bank deposits. CBO later estimated that would increase fiscal 2009 outlays by $2 billion (page 54).
• $31 billion in “supplemental” spending for the military and other purposes. Obama pushed forand signed on June 24 another spending measure. The press dubbed it a “war funding” bill, but it actually contained $26 billion for non-defense measures (including funding for flu vaccine against the H1N1 virus, and for the International Monetary Fund) in addition to $80 billion for the military.
  Only a portion of the total $106 billion it authorized would actually be spent during the remaining three months of fiscal 2009, however. Sen. Kent Conrad, chairman of the Appropriations Committee, stated on June 18: “The conference report includes $105.9 billion in discretionary budget authority for fiscal year 2009, which will result in outlays in 2009 of $30.5 billion.” (See page S6776.)
  Here again, a case can be made that Obama isn’t responsible for the entire $31 billion. Economist Mitchell argues that $25 billion in military spending should be assigned to Bush, because “Bush surely would have asked for at least that much extra spending.” But he didn’t. So rather than speculate, we’ll assign it all to Obama, who asked for it.
• $2 billion in additional “Cash for Clunkers” funding. Obama signed this measure Aug. 7, providing “emergency supplemental” funding for a stimulus program that offered $3,500 to $4,500 to car owners who traded in an old car for a new one with higher fuel economy. Nearly all was spent in fiscal 2009. (See page 959.)
• $20 billion for GM and Chrysler bailouts. At one point the government had paid out nearly $80 billion to support the automakers. But some of this was Bush’s doing, and much has been repaid and will be in the future.
  Here’s how we arrived at our $20 billion figure for Obama:
  By the time Obama took office, Bush already had loaned nearly $21 billion to the two automakers from funds appropriated originally for the Troubled Asset Relief Program, and had committed the government to lend $4 billion more. But Bush left decisions on further aid to Obama, who poured in additional billions.
  By the end of the fiscal year, the Treasury had made approximately $76 billion in loans and equity investments to GM, Chrysler and their respective financing entities (some had already been repaid). But for budget accounting purposes, not all of this was counted as federal spending under the TARP law. That’s because the government stood to receive loan repayments with interest, and held nearly 61 percent of the stock of the reorganized General Motors. What was counted as spending was — in rough terms — the difference between the estimated future value of those assets to taxpayers and their initial cost.
  Treasury put the net cost of the GM and Chrysler support during fiscal 2009 at $45 billion (see page 110, the “Total subsidy cost” line under the heading “AIFP,” for Automotive Industry Financing Program). That’s the amount officially booked as a federal outlay for fiscal 2009.
  We assume — we think reasonably — that the $25 billion committed under Bush would have been lost had Obama done nothing. So we subtract the full amount of Bush’s commitment from the net total of $45 billion that Treasury initially estimated for fiscal 2009.
  For the record, the ultimate total cost of the auto bailout is now estimated to be lower than initially expected. It is put at $21 billion by the Treasury Department (see page 5) and and only $19 billion by CBO (see Table 3). But those lowered estimates don’t affect what was booked as spending in fiscal 2009.

Other big domestic programs that don’t require yearly appropriations, including Social Security and Medicare, continued to operate as they had under Bush. One big fiscal 2009 spending increase resulted from an unusually large 5.8 percent cost of living increase that took effect just before Obama took office. That was an anomaly, as we explained in “Social Security COLA,” posted Sept. 23, 2009, and there would be no COLA at all for the next two years. The same 5.8 percent COLA also was given in 2009 to millions of federal retirees, military retirees and disabled veterans and their survivors.
So by our calculations, Obama can fairly be assigned responsibility for — at most — 5.8 percent of the $3.5 trillion that the federal government actually spent in fiscal 2009, which was 17.9 percent higher than fiscal 2008.

 

[blackrock13]

............... A Binge That ‘Never Happened’?
The White House has promoted a May 22 column by Rex Nutting of the Wall Street Journal’sMarketWatch website that concluded “federal spending is rising at the slowest pace since Dwight Eisenhower.” Nutting also argued that allegations of a “reckless spending spree” by Obama constitute a “whopper” and “never happened.”
That raised howls and rebuttals from conservative stalwarts at the Wall Street Journal’s own editorial page, at the libertarian Reason magazine, at the Heritage Foundation and even from Cato’s economist Mitchell, who called Nutting’s comparisons “nutty” in a piece for the Forbes magazine website, even though Nutting based his analysis in part on the same $140 billion figure Mitchell uses for Obama’s fiscal 2009 spending.
Our own analysis leads us to conclude that Obama deserves responsibility for somewhat more fiscal 2009 spending than Nutting or Mitchell assign to him, as we’ve noted. Spending in that year shot up an incredible $535 billion. Nutting and Mitchell hold Obama responsible for only 26 percent of that increase, but we conclude that Obama can fairly be assigned responsibility for as much as 38 percent.
We also disagree with Nutting’s conclusion that Obama’s increases are the lowest since Eisenhower. Not only should Nutting have measured Obama’s increases from a lower base, in our judgment, he also fails to take account of inflation, which has been extraordinarily low during Obama’s term.

Moderate Increases Since 2009​

Since fiscal 2009, however, it cannot be denied that spending has increased only modestly. Total federal outlays actually went down 1.7 percent in fiscal 2010, for example, then rose a little more than 4 percent in the fiscal year that ended Sept. 30. Spending was projected by CBO to rise less than 1 percent in fiscal 2012. In fact, CBO reported on May 7 in its most recent monthly budget report that spending for the first seven months of the current fiscal year was 3.4 percent below the same period a year ago. That was mostly due to differences in timing of certain payments, but even adjusting for those, CBO figured spending is 0.8 percent lower so far this year.
Update, June 7: A new CBO monthly report, issued after this article was posted, showed outlays for the first eight months of the fiscal year running 1.2 percent higher than the same period a year earlier, after adjusting for timing of payments and also after taking account of an unusual adjustment to TARP outlays booked in May 2011. The June 7 CBO report thus shows fiscal 2012 spending to be on track to increase only slightly for the full fiscal year ending Sept. 30.
But CBO also projected on June 5 that by the end of the year, due to the continued mismatch between outlays and receipts, “the federal debt will reach roughly 70 percent of gross domestic product (GDP), the highest percentage since shortly after World War II.”
All of the yearly changes under Obama are well below the 7 percent average annual increase under Bush prior to fiscal 2009. And in that year — for which we assign most of the increase to Bush — the rise amounted to a staggering 17.9 percent.

Overrated ‘TARP Effect’​

Some have claimed that the modest spending increases since fiscal 2009 are illusory, and Obama’s spending has been masked by the way the government accounts for TARP spending. For example,Wall Street Journal columnist James Taranto wrote that TARP would have caused “a sharp increase in 2009, followed by a sharp decrease in 2010.”
Actually, not so much. A close look shows the TARP effect has been rather modest.
Spending on the TARP program turned out to be much less than the $700 billion originally authorized. Congress later reduced the authorization to $475 billion in the Dodd-Frank Wall Street Reform and Consumer Protection Act that Obama signed on July 21, 2010. And not all was spent in 2009.
Actual outlays for TARP in fiscal 2009 totaled $154 billion, according to the CBO. So the one-time bump in spending amounted to about 4 percent of fiscal 2009 spending.
It’s true that money recovered since then is recorded as negative spending rather than as increased revenues. And that does artificially reduce Obama’s spending figures — but not by much.
TARP decreased federal spending by $108 billion in fiscal 2010 and $39 billion last year, according to the CBO. Those artificial reductions brought down federal spending by just 3 percent in fiscal 2010, and 1 percent in fiscal 2011. Even without those reductions, Obama’s spending increases wouldn’t come close to equaling the average annual increase under Bush.

Historic Highs​

Nevertheless, the spending Obama inherited was so high that even modest increases keep it at a level that is extraordinarily lofty by historical standards.
Perhaps the most relevant measure of federal spending is how it compares with the nation’s total economic output, as measured by gross domestic product. And spending in fiscal 2009 hit 25.2 percent of GDP — the highest since 1945.
It hasn’t come down much since that postwar record. It was 24.1 percent of GDP in both fiscal 2010 and 2011. Spending for each of the last three fiscal years was higher than any since 1946.
Obama has also committed the government to some big spending in future years. CBO estimated in March that the insurance provisions of his health care law will cost $58 billion in fiscal 2014 and reach $110 billion in 2015, rising each year thereafter. Those costs will total nearly $1.3 trillion through the year 2022. (CBO also estimates 30 million to 33 million Americans will gain health insurance coverage as a result.)
Beyond this year, future spending levels are impossible to predict with any accuracy. Congress has yet to pass a single one of the 12 regular appropriations bills for the fiscal year starting Oct. 1, and itremains to be seen if Congress will undo the harsh, automatic cuts in military and domestic spending enacted in last year’s bargain to increase the debt ceiling. The Supreme Court is also considering whether or not to strike down the health care law.

Furthermore, another spending showdown is looming. The government’s borrowing will soon force Congress to consider raising the legal debt ceiling once again, probably early next year. And House Speaker John Boehner has declared that “I will again insist on my simple principle of cuts and reforms greater than the debt limit increase.” So the president and Democrats will soon face another clash with congressional Republicans over spending levels and government revenues.
We won’t presume to predict the outcome of the coming budget Armageddon, likely to take place next January or thereabouts. Much will depend on whether Obama or Romney wins the November election, and which party wins control of the House and Senate.
At issue, however, will be both spending and revenues. So we’ll end by reminding readers that while spending as a percentage of GDP is running at the highest level since the 1940s, tax revenues are also low by historical standards. For fiscal 2009 and 2010, receipts were just 15.1 percent of GDP, and last year they inched up to 15.4 percent. They haven’t been that low since 1950. And prior to 2009, the average since the end of World War II was 17.8 percent.​

– by Brooks Jackson