While some in the media continue to indulge the fantasy that we are in a booming recovery (Shep Smith on FOX is one of these clowns), the actual news is disturbing and alarming. First, there is Japan:
GDP data reveal Japan mired in recession . . .
The yen has fallen by about 16 per cent against the dollar since November, when the election that brought the new government to power was called
So, what does this mean? Apart from Japan being in a recession, the falling yen means that any US exports to Japan are likely to decline. At the same time, products produced in Japan–e.g., cars, become cheaper. As an important trading partner of the United States, this suggests we will end up importing more from Japan while selling them less of our goods and services. That is not a recipe for job creation in the United States.
Well, what about Europe? Surely things are looking up there? Nope.
News last Friday reported that German and French economies contracted sharply:
BERLIN/PARIS – Europe’s two largest economies, Germany and France, both shrank markedly in the last three months of 2012, suggesting the eurozone has slipped deeper into recession and throwing a first quarter recovery for the bloc into doubt.
The German economy contracted by 0.6 per cent on the quarter, official data showed on Thursday, its worst performance since the global financial crisis was raging in 2009. France’s 0.3 per cent fall was also slightly worse than expectations.
Worryingly for Berlin, it was export performance – the motor of its economy – that did most of the damage.
“In the final quarter of 2012 exports of goods declined significantly more than imports of goods,” the German statistics office said in a statement.
Back revisions to the French figures showed its output fell by 0.1 per cent in each of the first and second quarters of 2012, meaning the country has already experienced one bout of recession in the past 12 months.
Let’s look at the data for 2012. These Countries represent 67.82% of U.S. Imports, and 56.84% of U.S. Exports in goods.:
Country Name Year to Date in Billions of U.S. $
United Kingdom 109.75
Korea, South 101.20
Saudi Arabia 73.79
Recession in Europe and Japan is not good news for U.S. job creation and economic growth. There also is concern that China’s international economic activity is dragging–underperforming in December and January. Similar news from Canada:
The Bank of Canada and Prime Minister Stephen Harper acknowledged Wednesday that their recent economic projections have proven too rosy.
For Harper, this will complicate his government’s budget-making and make it harder to get jobless Canadians back to work.
And here at home? The scheduled tax increases and public spending cuts due to kick in starting March 1st early could suck $600 billion out of the economy. And the hits will keep coming. Forbes offers this “cheery outlook:”
Starting next year the ACA imposes a new $100 billion tax on health insurance. The tax will start at $8 billion in 2014, increasing to $14.3 billion in 2018, and will continue to increase each year.
· The health insurance tax is larger than the device tax and the prescription drug tax combined.
· The health insurance tax will increase costs for individuals and families purchasing coverage on their own, small businesses, seniors and people with disabilities enrolled in a Medicare Advantage plan, and state Medicaid managed care plans.
· The health insurance tax is far greater than the minimum penalty for those who choose not to buy health insurance – further incentivizing young, healthy people to forgo purchasing insurance until they need medical care.
The sluggish economy is not confined to the United States. It is a global reality and the outlook is not promising. At what point will Americans finally decide to hold Obama accountable for his incompetent and harmful economic policies?