Donald Lambro

-- While the official unemployment rate stood at 9.5 percent in July, the real jobless rate is much higher than that. Factor in the 1.2 million unemployed who have given up looking for work and have dropped out of the labor force, plus those who want full-time work but can only find part-time jobs, and the national unemployment rate is 16.5 percent.

-- The housing industry has sunk into a deeper slump, with nearly half of homeowners who enrolled in Obama's mortgage relief plan dropping out -- raising fears that foreclosures may increase in the second half of the year.

-- Other troubling signs point to growing economic desperation in the workforce. Longterm unemployed Americans are forced to apply earlier than they planned for Social Security benefits in an attempt to make ends meet. And a record number of workers are withdrawing funds from their 401(k) retirement accounts to pay their household bills and put food on the table.

Meantime, the Obama administration is planning to slam the U.S. economy with the largest tax increase in American history by letting President Bush's 2001 and 2003 top income tax rate cuts expire at the end of this year.

Beleagured businesses, both large and small, have been saying all year that this will deeply hurt the economy, risk-taking investors and job creation, but the White House and Democratic leaders are stubbornly determined to go ahead with their big-spending tax-hike plan.

It isn't just the business community saying higher taxes will weaken the economy: the nonpartisan Congressional Budget Office is saing it, too.

A CBO analysis released last week said permanently extending the Bush tax cuts would give the country a "considerable" economic boost over the next few years.

"Under that... scenario, economic growth would be stronger next year; unemployment would be lower next year," said CBO director Douglas Elmendorf, who was appointed to his post by Democratic leaders in Congress.

Moreover, "under current law, both the waning of (Obama's) fiscal stimulus and the scheduled increases in taxes will temporarily subtract from growth, especially in 2011," CBO added.

Notably, a growing number of Democratic candidates are also urging Obama and their party to keep the lower tax rates in place, saying it would be the height of economic folly to raise income taxes on the people who create jobs at a time when the economy is in a steep decline.

Some of the don't-raise-taxes Democrats are Senate candidates in critical battleground contests, including Missouri Secretary of State Robin Carnahan, Rep. Brad Ellsworth of Indiana and Rep. Charlie Melancon of Louisiana.

When Ronald Reagan cut tax rates across the board in the 1981-82 recession, the economy surged into a spectacular recovery, with quarterly rate increases of between 4 percent and 9.3 percent over the next several years.

There's a message there somewhere for the stubborn Obama Democrats to consider.

Donald Lambro

Donald Lambro is chief political correspondent for The Washington Times.