Simply cutting government spending for the sake of optics without regard to social need and economic context is not the way forward.
Payrolls grew by 114,000 last month and the unemployment rate ticked down significantly to 7.8 percent, according to today's jobs report from the BLS. That's the lowest unemployment rate since January of 2009. Moreover, unlike last month's report, September's decline in the unemployment rate was due to more job seekers finding work, not giving up and leaving the labor market. Both July and August's jobs numbers were revised up significantly such that in the third quarter of the year, payrolls grew by 146,000 per month on average, a notable acceleration over the second quarter's growth pace of only 67,000 jobs per month. All told, this report and the revisions paint a considerably better labor market picture than the last few reports. We're not yet out of the labor market woods, and I'd like to see us moving more quickly, but we're on the right path.
There's a time for larger deficits and a time to be moving toward budget surplus. We want and need cyclical budget deficits to offset slumps; we do not want structural budget deficits that get larger when the economy hits its expansionary stride, which it has not as of yet.
Things that get into and out of the system, like the Recover Act and even the TARP, are not the things that drive the deficits.
I understand the Republicans are calling it a draw, which should tell you that Vice President Biden did very well Thursday night against Representative Paul Ryan in their first and only debate.
The challenger will always try to talk down the economy. Obviously we're far from out of the woods. The GDP is growing barely at trend, unemployment is still too high, and millions of foreclosures remain in the pipeline, though filings are at the lowest level since July 2007. So it's a mixed bag, but nothing like the dark picture that Gov. Romney and his supporters have been trying to paint. We're slowly sailing out of a storm. Too slowly, in my humble opinion, due to the refusal of policy makers other than Bernanke and Co., to put some policy-induced wind in the economy's sails. But remember, when Bob Dole tried Romney's argument back in 1996, it was a huge loser for him. The timing isn't nearly as supportive for the president, but the truth is that things are slowly getting better and Romney's claims to the contrary may be drowned out by this reality.
It's shocking to me that the Mitt Romney campaign is now lurching around, daily trotting out new "studies" and "solutions" to their tax plan's math problem -- "we'll broaden the base (but can't say how)"... "we'll cap deductions at $17,000"... "whoops... that doesn't work... we'll cap them at $25,000." The Romney team clearly threw out their tax plan -- 20 percent cuts across the board -- without any of the requisite spade work to see if it actually made sense. And now that real studies are challenging it, they're veering from "just trust us" to setting the evidentiary bar down so low that anything with numbers on it can clear it. Not surprising, given the beating the facts have taken in this election cycle, but not so good for democracy, not to mention the truth.
The nation's economy expanded at an annual rate of 2 percent last quarter, according to this morning's GDP report. That's faster than last quarter's 1.3 percent and a bit above what most analysts were expecting, so that's good. But it's also just trend growth -- 2 percent is about what it takes to keep the job market pretty much where it is. I could easily write the campaign press releases: Romney/Ryan: growth too slow! Obama/Biden: 13th quarter of expansion, growth picked up from last quarter, no time to change horses (I'd add: especially when the other horse wants to run hard in the wrong direction).
It's time to realize what a potentially wonderful country we have here in America and to once again embrace the responsibility for its stewardship. Right now, that means making the effort to see through shape-shifting flimflammers.