Zero Jobs Created in the Month of August: According to the Bureau of Labor Statistics, zero new jobs were added in the month of August, the first month since September 2010 that the economy has failed to add a single job and the first time since 1945 that the government has reported a net monthly job change of zero. The unemployment rate remained at 9.1 percent for the second straight month. Only 2 out of the last 28 months have seen unemployment below 9 percent (February and March 2011) and unemployment has been above 8 percent for 31 months, the longest such streak since the Great Depression.
CBO/OMB Project $1.3 Trillion Deficit for FY 2011: In newly updated estimates released over the past week, both OMB and CBO project a budget deficit of $1.3 trillion in FY 2011. The deficit marks the third straight year with deficits in excess of $1 trillion. Prior to 2009, the highest budget deficit in history was $459 billion.
Harvard Faculty on Pitfalls of Increasing Taxes to Pay for Medicare: In a recent New England Journal of Medicine article, Harvard professors Katherine Baicker and Michael Chernew explain “raising taxes to pay for public insurance exerts a structural drag on the economy even if the revenue is spent on care…Deficit spending on health care also carries an economic cost: taxes are required to pay back any borrowed money (with interest), and rising debt-to-GDP ratios may have calamitous effects on the country’s future ability to borrow. Moreover, increased spending on health care is not necessarily good for the economy even if it increases health care employment: spending on low-value health care diverts resources from other uses that could do more to boost the GDP and create jobs.”