The Obama Recovery: more than 50% will pay no federal taxes in '09 -- a John Galt Tipping Point

This week's well-publicized unemployment rate might have remained at 10%, but a hidden problem lurks just beneath the surface.

• The number of people with a job fell by 589,000 last month.
• Even worse, the number of people outside of the labor force grew by an astonishing 843,000 in December alone (this number is used to calculate the unemployment rate).
• Since the stimulus package was passed in February, the number of people who have moved outside of the labor force has grown by 3.2 million. December's number represents more than a quarter of that number! In fact, the total number of employed persons has fallen by 4 million since the stimulus passed.

Even more startling:

• A record 6.1 million people -- representing 40% of the unemployed and 4% of the entire workforce -- have remained unemployed for over 27 weeks.

And the civilian labor force continues to shrink apace, hitting a five-year low of 64.6%:

• In December 153.059 million were in the labor force, 15.267 million were unemployed and 83.865 million were not in the labor force. This represents a 64.6% participation rate, which is a five-year low -- or 3.073 million jobs below the five-year average.
• "Had those 3 million still be in the labor force (and, of course, not employed), the number of unemployed workers would have been 18.340 million, which in turn would result in [a real] unemployment rate of 12%."

And total, non-seasonally adjusted unemployment claims just hit another record:

• Total [NSA] "insurance claims (consisting of Initial, Continuing and EUC claims) hit another record of 11,268,100".

Further, as you might expect of the Democrat braintrust of Obama, Pelosi and Reid -- and their plans to centrally plan one-sixth of the economy -- the news gets considerably worse:

• Taxes are going up for Americans with health insurance as the President "signaled to House Democratic leaders Wednesday that they'll have to drop their opposition to taxing high-end health insurance plans to pay for health coverage for millions of uninsured Americans." The taxes on so-called "Cadillac" plans will reduce the income of millions of union- and non-union workers alike.
• Married couples are also targeted under the health care bill. An unmarried couple would pay $2,000 or more in premiums the moment they were married. This represents yet another Democrat policy that undermines marriage, encourages single-parent families and strengthens the culture of dependency.
• The AP report that the "drain on federal and state finances could force Congress to consider raising the federal unemployment insurance tax".

With more and more taxes levied upon a smaller and smaller group of taxpayers, the odds that a good portion of the population will "go Galt" are skyrocketing:

• A "major reason that a depression hasn’t appeared and the public is not in open revolt" is that a record 20 million people received unemployment benefits in 2009.

• "Financial and economic history shows that the lower rungs on the chain experience hardship first [followed by] an inexorable march up the food chain... [h]owever, in this crisis, the welfare checks, food stamps and unemployment benefits are still rolling so there has not been as much impact, including political angst from this segment."

• In 2008, 46.7% of US citizens paid no federal income taxes.

• In 2009, more than 50% of US citizens are likely to pay no federal income taxes.

Disclosure: I am long in tar, feathers, pitchforks and torches.