The jobs and unemployment numbers come out at precisely 8:30 a.m. Eastern Time, almost always on the first Friday of the month, and at 8:31 the pundits are either jumping for joy or slumping in disappointment over what those numbers “reveal.”
They need to stop doing that, because one month’s numbers don’t tell you the big picture.
Here’s what the big picture reveals: We’re in trouble. Big trouble. We-can’t-go-on-like-this trouble. And an increase of 200,000 or so jobs each month and a decrease of a tenth-of-a-percent in the unemployment rate every few months will do nothing to change that.
A job is much more than what you and I need to stay alive, to feed our families, to educate our kids and to save for retirement. A job is how our government generates revenue.
That’s because If you have a job, you get paid, and a portion of your pay goes to the government in the form of income taxes, which provide the money the government needs to run the country, which is expressed in the form of an annual budget.
If the government collects more in taxes than the budget requires, we have a surplus. (We’ll pause for laughter.)
If the government collects less in taxes than the budget requires, we have a deficit.
And that’s what we have right now. Our government set a budget of $3 trillion last fiscal year, and it spent close to $3.6 trillion. The difference between those amounts is our deficit – about $600 billion.
To get rid of that deficit, we need to raise more money. And to do that, we need to increase the number of people with jobs who pay the taxes that provide that money.
So how many more full-time jobs do we need to break even? The answer to that is why we’re in trouble.
On average, each new full-time job pays around $50,000, a salary that translates to about $12,500 in federal income tax. When we divide $600 billion by $12,500, we learn that we need to add 48 MILLION new full-time jobs to make up the deficit.
So much for the “good news” that 209,000 jobs -- and they weren’t even all full-time jobs -- were created in July. At this rate, 2.5 million new jobs will be created each year. It’s terrific that all those people will have jobs, but the tax revenue generated from those jobs will reduce the deficit by only $30 billion – a mere 5 percent of the total deficit.
So how do we eliminate the deficit? We not only have to increase job growth at multiples of what we’re doing now, but we also have to cut spending – drastically.
If we doubled the number of jobs created each month to 400,000, it would reduce the deficit by $60 billion in a year. This means we would have to cut expenses by 15 percent to eliminate the remaining $540 billion deficit.
But our government is incapable of cutting expenses. Remember the big fight over the sequester? All that did was slow the rate of increase in spending, not cut total spending itself.
Keep this in mind every time you read about a bill that requires spending. Stop for a moment to think in terms of how many new full-time jobs it will take to pay for it. If we think about where the money has to come from, maybe we’ll decide we don’t need that bill.
Stop for a moment and think when you consider President Obama’s request to spend $4 billion to help solve our border crisis. To pay that $4 billion, we’ll need to create 320,000 new jobs … all for a piece of legislation designed to bring illegal workers into America who will take jobs away from Americans, thus decreasing the number of tax-generating jobs for American citizens.
Remember, the government’s money doesn’t grow on trees, and it doesn’t come from a printing press. It comes from tax revenue.
And there’s more thing . . . I haven’t even mentioned our $18 trillion national debt.
Like I said, we’re in trouble.