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By John Ubaldi
Contributor, In Homeland Security
The 2016 Presidential election has seen a revolt of the middle class with each side taking different approaches to solving the economic stagnation which has gripped the country.
It didn’t help that on Friday the Commerce Department revised the Gross Domestic Product for the fourth quarter of 2015 to 1%, up from .07%, leaving the GDP at 2.4% for the second year in a row.
The last time the GDP was over 3% was back in 2005; over 10 years ago. “Market Watch” reported that the outlook for 2016 doesn’t appear to be much better. Economists predict the U.S. will stick to its current rate of growth, held in check by a strong dollar, weak exports and slack business investment.
Now with the listless U.S. economy, both political parties have vastly different approaches to solving the stagnation which has gripped the nation’s economy and fueled a rage by the middle class.
Democrat Senator Bernie Sanders, and former Secretary of State Hillary Clinton, want to vastly expand the growth of the federal government and pay for it with higher taxes on the wealthy.
Republicans have a far different approach with lower taxes, smaller government, and to unleash the private sector, but whatever direction is taken, the middle class want answers and are outraged by Washington inability to solve the economic malaise facing the country.
All the middle class can see are stagnate wages and minimal jobs prospects. With millennials facing astronomical student loan debt, in many cases they have to return home to live with their parents upon graduation. Parents, for the first time, believe that the next generation will be far worse off economically then they themselves are.
America’s Unemployment Rate is Deceiving
In a statement in February, President Obama announced that the nation’s unemployment rate had dropped below 5% for the first time in eight years. “As you are aware by now, America’s businesses created another 158,000 jobs last month. After reaching 10 percent in 2009, the unemployment rate has now fallen to 4.9 percent — even as more Americans joined the job market last month. So this is the first time that the unemployment rate has dipped below 5 percent in almost eight years. Americans are working.”
What the president failed to mention is that more Americans are working part time than ever before, and if you are able to find full time employment, it is for far less wages than before the recession. What is also missing in the president’s calculation regarding the economy, and reported by the Bureau of Labor Statistics, is that the labor participation rate is at a historical 30-year low.
Furthering the sediment witnessed across the country, the “Economic Policy Institute” reported in February’s unemployment report that close to three million people have dropped out of the lobar force all together, in part because of being unsuccessful in finding a job, and have simply given up trying to find meaningful employment. Hardly the sign of a robust economy!
With all this dismal news, the middle class continue to view the rise of the federal debt, which contributes to the uncertainty they feel.
In 2012, Kenneth G. Liberthal & Michael E. O’Hanlon of the Brookings Institute, penned an article titled, “The Real National Security Threat : America’s Debt” in which they state, Economic renewal and fiscal reform have become the preeminent issues, not only for domestic and economic policy but for foreign policy as well. As the former chairman of the Joint Chiefs of Staff, Adm. Michael G. Mullen, was fond of saying, national debt has become perhaps our top national security threat. And neither major presidential candidate is doing enough about it. This issue needs to be framed as crucial not just for our future prosperity but for international stability as well.”
Continued in its report, “The United States has been running trillion-dollar deficits, resulting in a huge explosion in the country’s indebtedness. Publicly held debt now equals 70% of gross domestic product, a threshold many economists consider significant and highly worrisome. Making matters worse, half of our current deficit financing is being provided by foreigners. We are getting by with low interest rates and tolerable levels of domestic investment only because they find U.S. debt attractive, which may not last.”
Nothing has changed since 2012…now the national debt stands over $19 trillion and will be close to $20 trillion by the time President Obama leaves office in January 2017.
Throughout the 2016 presidential election the candidates from both sides of the political spectrum speak of how they feel the pain of the middle class and understand what they going through, but so far no one has addressed how to solve the malaise affecting the U.S. economy.
It may appear that there may be no good candidates out there, but then how often does the perfect candidate ever exist. Having said that, the country will ether opt for more of the same, or vote in a change of leadership and hope that they can revive the U.S. economy. However, one thing I learned in the military – Hope is not a strategy.
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