The Reuters news service dropped a bomb on Barack Obama’s re-election campaign Thursday morning, publishing an astonishingly bleak set of projections for the coming year from Moody’s Analytics and JPMorgan:
Consumers will have to dig deeper into their pockets next year to pay for costlier healthcare, more expensive grocery bills and higher taxes, an extra drag on the country’s already slow-moving economy.
The additional outlays look set to test the resilience of consumers, whose spending accounts for around two-thirds of the U.S. economy.
“We think it’s going to be a difficult six to nine months,” said Scott Hoyt, senior director of consumer economics for Moody’s Analytics. “If anything, conditions are likely to get worse, particularly at the start of the year.”
Obama’s economy is dead in the water, with even lower GDP growth of just 2 percent predicted for 2013. Consumer spending has generally been defying this economic gravity, remaining solid enough to prop up a tottering economy despite grinding unemployment. But that can’t continue forever, and the massive “Taxmageddon” tax increases coming in January, including the end of Obama’s raid on Social Security funding to juice up consumers with a tiny “payroll tax cut,” might just be the haymaker punch that puts consumer spending down for the count.
How quickly everyone forgets that their “payroll tax cut” was coming right out of Social Security funding! There really is a limit to how much future generations can be expected to pay, in order to prop up Obama’s poll numbers today. And the end of that little subsidy is going to pull $125 billion out of consumers’ pockets next year, shaving 0.6 percent off GDP growth, according to Moody’s. But remember, you can’t have Mitt Romney’s proposed 20 percent across-the-board permanent rate reduction and simplified tax system, because Obama has a cooked-up study that claims it would add almost as much to the national debt as he already has.
Another concern is a projected 3.5 to 4 percent increase in food prices, which might seem baffling to those who have been routinely assured that inflation is virtually flat. That’s because food and gas aren’t counted in the official inflation figures. Cost of living increases are so much less painful if you just pretend they aren’t happening.
And of course, ObamaCare is blowing your insurance costs through the roof. “Average health care premiums are forecast to jump 6.3 percent in 2013, according to Aon Hewitt,” reports Reuters. College tuition also continues to balloon, but we’re supposed to forget about that, and focus on subsidizing low interest rates for the student loans needed to pay those inflated costs for increasingly worthless degrees clutched by heavily indebted students as they stumble from the classroom into a jobless economy.
Who’s hurting the most under Obamanomics?
Households with incomes under $75,000, people older than 50 and those with lower levels of education believe their financial positions are getting worse, according to a survey by Bankrate.com, a research firm specialized in consumer finance.
“A lot of low- and middle-income households are mired with a stagnant income at a time when food and energy costs keep moving higher,” said Greg McBride, a senior financial analyst at Bankrate.com.
Four more years! FORWARD!