Obama's Immigration Announcement Just Screwed Everyone
Melvin is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
On the heels of Obama's afternoon announcement that he would provide amnesty for young illegal immigrants ages 15-30, he's managed to both trick just about everyone into thinking this isn't as bad as it seems - just a new paradigm of political convenience, while still managing to screw even those he's pandering to: the working class people.
Vincent Reinhart and Morgan Stanley's US Economics team just cut their 2012 forecast on the U.S. economy. The team sees the economy growing 2.0 percent, down from an earlier forecast of 2.3 percent. For 2013, they see the growth decelerating to 1.7 percent, down from 2.0 percent.
From Investopedia: "Measuring GDP is complicated (which is why we leave it to the economists), but at its most basic, the calculation can be done in one of two ways: either by adding up what everyone earned in a year (income approach), or by adding up what everyone spent (expenditure method). Logically, both measures should arrive at roughly the same total.
"The income approach, which is sometimes referred to as GDP(I), is calculated by adding up total compensation to employees, gross profits for incorporated and non incorporated firms, and taxes less any subsidies. The expenditure method is the more common approach and is calculated by adding total consumption, investment, government spending and net exports."
In other words, the government just gave away at least 800,000 jobs to the newly-created legal labor force, forcing others (since this is a down economy) to turn to none other than the government teat: welfare, food stamps, and collecting unemployment. Government 'teat spending' isn't good for gross domestic product measurement, nor is it beneficial for the reliablity of our nation's economy, which is what caused the GDP forecast to be so glum in the first place!
NICE ONE, BARRY!