Saturday, March 13, 2004

Personal Bankruptcy = Family Values

There's much concern about family values now. It's not all about gender, marriage and civil rights. Some is about jobs, income, and money. Reuters on March 12 reported a record 1,660,245 personal bankruptcy filings in 2003. The US Census Bureau posts annual income data for just over 109 million households--with median annual income of about $42,409 in 2002. That would be 1 bankruptcy for every 66 households. The Reuters article puts the ratio at 1 for every 73 households. No matter: interest runs on and money comes due. Within a decade, it's quite possible that 1 of every 7 or 8 households in your neighborhood will have declared bankrupcy.

The Federal Reserve estimated total household private debt at the end of 2003 as $10.4 trillion, which would be average household debt of almost $68,000. With successive annual Federal Budget Deficits now running well over $500 Billion a year, total Federal Government debt has itself climbed over $7 Trillion.

We have no illusion that the burdens of carrying Federal Debt can be shared evenly among all 109 million households. In 9 million of those, families are contending with conditions of abject poverty. There are at least another 30 million in which occupants have their hands full coping with the difficult labor market, the health insurance crisis, kids at risk, and juggling payments for mortgage or rent, utilities, food, and transportation costs. For better or worse, the burden of government debt largely falls on the remaining--more fortunate--70 million households. Beyond whatever personal debt there is, each of these 70 million households carries roughly another $100,000 of long term Federal Debt. Likewise, when Federal budgets swing from annual surpluses of $200 Biliion to annual deficits of $500 Billion, that $700 Billion can be understood as another $7,000 added to the debt riding on each of those 70 million households.

The US economy has suffered an accumulated net loss of 2.6 million jobs since George W Bush was inaugurated just over 3 years ago. The short recession that took hold in the Spring of 2001 was officially over in November of 2001. Yet on March 5, 2004--at least 27 months after the end of that recession--we received the shocking report that just 21,000 net new jobs were created in the US economy during the month of February. Most of that slim gain reflected expansion in public sector jobs and it was far below the expectations of 125,000 or more new jobs.

Not since Herbert Hoover and the Great Depression---over 70 years ago--has ANY President completed a 4-year term without being able to report a single new job being created in the US labor market. The Bush II record--and it truly is record-breaking--is one of showing an average monthly LOSS of 70,000 jobs. That also contrasts most sharply with the record of job growth in the preceding Administration. Between 1993 and 2000 there were average job gains of more than 200,000 per month. There were more than 20 million new jobs created by the end of Clinton's second term.

George W Bush's jobs record pales even in comparison to that of Eisenhower's first term in the mid 50's as well as the 4-year term of Bush, Sr., when there were also very weak performances in terms of job growth. Yet even then--among the most disappointing periods for job growth in the last 50 years--there were at least some new jobs created.



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