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December 02, 2011

8.6 percent and 2012

First, even allowing for more people dropping out of the work force, the unemployment numbers are good. And, while I know government economists are spinmeisters, nonetheless, the background news about rising sales in many areas is true, I know.

Meanwhile, this has big import for 2012. If unemployment is down to 8.5 percent in mid-summer, especially if some of the teachers and such get hired back, comparing the two mainstream parties, I give Obama more than a 50 percent chance even against Romney and well over that against other GOP candidates.

The lower unemployment rate could have short-term negatives, though. The GOP is likely to push even harder against another extension of long-term unemployment benefits. But, at the same time, more people back to work, paying taxes, etc., will slowly cut the deficit again.

If the projected 2013 deficit gets below $1 trillion by midsummer 2012, then Obama's really in the gravy, if the unemployment scenario I listed above holds true.

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