Originally Posted by Steve_NO
EDIT: I should add that a previous change in the unemployment calculation was made in 1983 at the behest of the Reagan administration. One of the changes was to count military personnel as 'employed' rather than leaving them out completely. This helped to juice the numbers as well.

Will, I remember when that was done. Since they are, demonstrably, employed...that change seemed then and still does now to more accurately reflect the economic situation. Don't you agree? I mean it does reflect a higher number, but isn't it a more reflective number of the real situation? Seems to me it is.


Well the thinking behind leaving them out was that the unemployment number should reflect the number of people within the labor market of the private sector that were out of work. Military personnel are excluded from the whims of the market and therefore give no valuable information on the state of the private sector.

But the government as a whole was less of a player at the time as well. As we stand now government in its many forms is a huge chunk of the employed. I'm not sure it matters. Only insofar as the unemployment number dropped permanently in its final calculation once this change was made.

But what does matter is that you cannot compare figures from now against the backdrop of the figures prior to the changes. These changes ~do~ make a difference and they have lowered both the CPI and the unemployment figures. The term 'historically low number' loses its meaning when history begins in 1994.

Take a good hard look at the fundamentals of employment since new years day:

1) Total employed workers has dropped by a few hundred thousand.

2) Total working age population has increased by perhaps 400,000 to 500,000 people.

3) Unemployment has risen, but only by a few tenths of a percentage point.

The numbers don't add up. Same thing for CPI. I know this thing was adjusted downward so that Social Security and all the rest could be constrained in their growth. But come on, who in their right minds actually believes that we had the lowest first quarter inflation in 5 years.

I cannot type that without smirking. Seriously.

Those little 'adjustments' may sound small but they are the difference between showing an honest contraction in GDP for the first quarter and maintaining the masquerade of staying positive. The reality is that we have been flirting with a recession on and off since 9/11. And our debt and total employed numbers reflect it.

And let's be brutally honest here: the total number of people who are employed is still underreporting the facts on the ground. There have been more real estate agents and Wall Street bankers laid off since January 1 than the total number reported in the BLS numbers combined.

I'm not saying this to bash Bush or run down the economy. I am saying that we need to start being honest with ourselves. We cannot afford 8 more years of pretending to be a prosperous growing country when doing so requires an ever expanding debt load. Let's take our medicine like a man. We have only maintained the trappings of a wealthy country by borrowing against the next generation. That has to stop.

We aren't nearly as rich or prosperous as the FIRE economy wants you to believe. A significant portion of our populace is debt poor and will be that way for the rest of their lives.

Will

Smellin' a lot of 'if' coming off this plan.