Economy Alarm: Report: Personal Incomes Continue to Tumble

Democrats Claim the Stimulus ‘Saved or Created’ Up to 2 Million Jobs Last Year and Promise to Reach 3.5 Million Jobs by the End of 2010

“The Obama administration, offering evidence that its much-maligned efforts to spur economic recovery have begun to take hold, said Tuesday that the $787-billion stimulus program saved or created 1.5 million to 2 million jobs last year… [Chairwoman of the White House Council of Economic Advisors Christina Romer] expressed confidence that the package of tax cuts and government spending — the largest of its kind in U.S. history — ultimately would fulfill President Obama’s promise of boosting employment by 3.5 million jobs by the end of this year.” (Don Lee and Jim Tankersley, “White House credits stimulus,” Los Angeles Times, 1/13/2010)

Credibility Crash: Government Spending Fails to Create Private Sector Growth

Personal income took a hit in most of the U.S. last year with the only gains coming from government support, according to new data from the Commerce Department.

Incomes would have fallen further without government support. Income declined in 223 metro areas last year, increased in 134 and was unchanged in nine regions. Even though prices declined last year — down 0.2% from a year earlier as measured by the national price index for personal consumption expenditures — incomes fell even more. On average, personal income dropped 1.8% in 2009, following a 2.7% increase in 2007.

In areas that saw gains, most of the increases came from the government in one way or another. In 77 of the 134 regions that saw incomes increase, the growth came from transfer receipts such as unemployment benefits or Social Security payments. In most of the remaining 57 metro areas, the gains were concentrated in the government sector, the Commerce Department said, including strong growth in military earnings. (Phil Izzo “U.S. Incomes Tumbled in 2009,” Wall Street Journal, 8/09/2010)

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