Don Roach: President Obama has Failed to Turn Around the Economy
Wednesday, July 11, 2012
The question we ask first term presidents when they run for reelection is always, is the economy better today than when they entered office? For Barak Obama, it would be difficult for the economy to be any worse than it was in early 2009. The housing bubble of the post-9/11 era had burst and was at its (we hope) lowest point. Unemployment in January in 2009 stood at 7.8% the highest rate since 1992 over the next ten months it would climb all the way to 10%. Unemployment remained above 9% between May 2009 through September 2011 save for an 8.9% break in March 2011. For over two years of Obama’s presidency unemployment remained at levels unseen since the early 1980s.
We can’t blame Obama for the economy he inherited. What we have to look at is what he’s done to right the ship and determine if he’s put the economy into a better position than when he entered office.
The Obama administration and everybody else in America knew the economy was in trouble. Obama’s administration took the view that if the private sector was hurting the cure was for government to inject funds into the economy to save and create jobs. Subsequently, the infamous American Recovery and Reinvestment Act of 2009 (ARRA) was born and America was on the hook for $831 billion. The ARRA was a cornucopia of spending on things such as infrastructure, expansion of unemployment benefits, and there were a number of tax credits also thrown in. The Obama administration believed that the stimulus program was the way, perhaps the only way, to save the American economy.
In order to judge the success of the stimulus program we need to look at it two ways – did it save the present economy and how much of a burden did it place on taxpayers in the future?
Unemployment is not deterred by the stimulus package
Despite the injection of funds in early 2009, unemployment rose far above what the Obama administration predicted. For instance, with the ARRA Obama’s administration projected unemployment to peak around 8 percent and fall steadily over the next several years. By July 2012, the Obama administration predicted unemployment would be around 6 percent because of how the ARRA would help the economy. The administration also projected that without the plan unemployment would peak at nearly 9 percent and by July 2012 unemployment would stand at a little higher than 6 percent.
The Obama administration fell short in a number of ways. First, actual unemployment peaked at 10 percent in 2009 and has remained far above the projections forecasted by the Obama administration. The stimulus pack was supposed to jump start the American economy and it did nothing of the kind. Also, it appears the Obama administration’s economic team did a poor job of evaluating the crisis facing our economy and the stimulus resulted in not achieving its aim of saving/creating jobs.
Some will argue that without the stimulus package things would have been much worse. Even if we allow for this, Obama’s own team was not able to project unemployment and even with the stimulus package unemployment rates continued to rise quickly.
One the question of the stimulus package saving and creating jobs, Obama earns an F. Unemployment after the stimulus plan got worse and it did not decline at the rate Obama’s team projected as a result of the ARRA. Indeed, it appears the ARRA did next to nothing save increase our debt and place an undue burden on taxpayers.
Taxpayers will be paying for Obama’s economic policies for years
The simple fact is, our government spends more today than it takes in revenues. Obama not only hasn’t tried to reverse this trend we’ve seen some of the largest deficit increases, as a percent of GDP, under his leadership than any in our nation’s history. With his stimulus plan, corporate bailouts, and Obamacare Americans are going to be paying for his economic policies for decades to come. The President’s heart is in the right place and he did the best he could, but his best isn’t good enough for us or our children.
For too long the Democratic answer to a deficit is more spending and their answer to a bad economy is also more spending. The thing about spending is that once you get used to living a certain lifestyle it’s difficult to cut back. We’re facing that situation today and Obama has led us here.
Obama’s economic policy has failed
The stimulus failed and the deficit is in horrific shape with little hope in sight. The Obama administration cannot be given another 4 years to continue their failed ‘solutions’ and lead us to a worse economy than the one we have today. In looking at some of these figures, I was scared and you should be too. If we re-elect President Obama there will be no telling how much long-term damage we will do to the American economy. What we need now is change…and this time we need real change we can believe in.
If so, let’s select someone other than the incumbent in November.
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