Lower Economic Forecast for Remainder of 2012 - Low Employment and Obamacare Slow Growth
While the Patient Protection and Affordable Care Act (ACA) Was passed before the Administration and Congress knew how bad the economy would be in 2012, They are (especially the Administration) making no efforts to repeal it in light of overwhelming evidence the economy will continue to suffer as a result.
We have begun the process of implosion for the Federal government as we now have more people entering disability than the employment rolls. Since 2009, 3.1 million Americans have gone on Social Security and likely will never again enter the workforce (other than under the table cash types of positions). Meanwhile the Obama administration at best can claim 2.4 million jobs have been created (a number that is questionable and without any real backing). I guess we can credit the administration with more Social Security jobs as a result of an increase in applications, not what I would consider a "win".
Food stamps are now received by 46 million, a sizeable increase from 32 million. That means about 15% of Americans are directly getting food off the tables of the other 85%. Well not exactly, only about 50% of people pay federal taxes, so food stamps of 15% of the population are paid for by 50% of the population (along with everything else). Even this is not completely true (even if it will be), because we are borrowing money to spend it. America gives away money it doesn't have and does so at the expense of the overall GDP. This hurts every single person who works for a living because their overall standard of living is lower. For those sucking off the system it's a great deal, for those putting in an honest days labor it means less for their children and for their retirement today and in the future.
To top it off we now have 41 months of unemployment above 8%. This is the longest since the 1930s, and clearly no level headed person can blame Bush with a straight face. It wasn't Bush who drove through Obamacare while unemployment remained high. It wasn't Bush who held back drilling permits, or didn't pass a budget. Although it was Bush who decided it was a good idea to give welfare collectors free cell phones and service every month. What was Bush thinking there?? I have no idea, but it's not like congress stopped him.
We need to drop our military size iby no less than half, pull our troops from around the world before we are forced to. Much better to close bases while we still project as a world power instead of as emergency measures because we have lost our ability to fund everything. It's also time to end 99+ weeks of unemployment insurance. 99 weeks is not a safety net, its a ball and chain. When people turn down work because unemployment is better, the system is not working.
Expect the SPY and QQQ to remain flat to lower with the most amount of pressure after the election if Obama wins. Investors will want to capture long term gains before the beginning of the new and higher tax year in 2013. Expect Real estate to remain under pressure for the same reason and especially home builders like Lennar (LEN) Toll Brothers (TOL). Oil (USO) and gold (GLD) will likely fall despite monetary easing. There is simply too much deflationary pressure to avoid it.