With only 5 days to go until the 2012 election, an election that by all accounts will find voters basing their choices heavily on economic factors, it’s time to reflect upon and examine the Obama economic record.
Obama administration policies over the past 4 years have not only coincided with no improvement in employment, in reality the employment situation in the U.S. has greatly worsened over the past 4 years. While the U3 unemployment rate now sits at 7.8% (with October figures scheduled to be released tomorrow), the decline from peak U3 unemployment of 10% has been primarily sparked by a simultaneous, and unprecedented, decline in labor force participation.
This unprecedented and lengthy drop has rendered the U3 measure meaningless. The reality is that the U3 rate would have continued to rise over the course of Obama’s term in office, measuring at or over 11% as of today, had labor force participation remained constant. Instead, millions of Americans, who do want and need work, have completely given up hope and are no longer being counted towards the U3 unemployment rate. Job creation in the U.S. has not even kept up with population growth, and over Obama’s term in office the employment-population ratio has remained stagnant.
Meanwhile, the mean duration of unemployment has remained stagnant as well, hovering near all-time record highs.
The U6 Unemployment Rate, which counts short-term discouraged workers, continues to hover close to 15%. But even this measure does not tell the entire story, as it does not include long-term discouraged workers, whom the government stopped tracking in the 1990s. The true unemployment and underemployment rate in the U.S. today is likely in excess of 20%. This is evidenced by stagnant income in the face of rising cost of living, and rising reliance on government aid, for example record increases in food stamp use.
SPENDING, DEFICITS, AND DEBT
During the 2008 campaign, then Senator Obama heavily criticized reckless spending under the Bush administration, referring to the deficits incurred under the previous administration as immoral, and even “unpatriotic.” Yet President Obama has both proposed and signed into law budgets delivering deficits in excess of One Trillion Dollars every year he has been in office. The national debt has skyrocketed from around $10 Trillion to around $16 Trillion in just four short years under President Obama’s stewardship.
Despite cries from the far left that President Obama hasn’t spent enough, the fact of the matter is that spending levels under President Obama are dwarfing those seen during the New Deal under President Franklin D. Roosevelt.
Or for a more recent and more similar example, spending levels under President Obama are dwarfing those seen under President Reagan, who inherited a similarly deep recession marked by higher peak unemployment, higher inflation, and more quarters of GDP decline.
The so-called Obama “Recovery” has been the slowest, weakest recovery from recession in recorded U.S. history. GDP growth has remained anemic, and too insignificant to spur needed job creation, increased federal revenue, or rising income. GDP growth has paled in comparison to levels seen during the Reagan recovery.
Further evidence of weak economic conditions has been the excess of nondefense inventory (excluding aircraft) over new orders, which has now surpassed both the peak seen during the recession following the bursting of the dot-com bubble, and the peak seen in the aftermath of the collapse of the housing bubble and the financial melt-down leading to the most recent recession, and sits at an all-time high of more than $60 Billion.
This is a key indicator and red flag of the possibility of a “double-dip” recession on the horizon. Weak economic growth, declining employment and labor force participation, exploding federal deficits and debt, increased individual reliance on government aid, and all other key economic trends reinforce this possibility.
And as for President Obama’s plans for the next four years? Continued massive deficit spending and a resumption of the status-quo. Mr. Obama’s only major proposal for change for a second term in office, his only concrete proposed “solution” for the fiscal problems that ail us, is a demand for higher taxes. This in spite of the fact that levels of taxation are negatively correlated with economic growth, and in spite of the fact that spending, and not revenue, has been the sole driver of this nation’s fiscal woes.
“Viewing our deficit and debt problems as a function of tax rates and tax revenues is misguided in the first place. The United States’ exploding deficits and national debt are entirely a function of spending. Consider the following hypothetical, in which the United States Federal Government maintained FY 2000 Spending levels, adjusted for inflation and population growth, for the decade between 2001 and 2010”
“Using static analysis, for the decade between 2001 through 2010, the United States Federal Government would have amassed a net budget surplus of nearly $2.2 Trillion, rather than the net budget deficit of nearly $4.7 Trillion we tallied. This with the Bush Tax Cuts in place, as well as a brief period of economic expansion, book-ended by the collapse of the 2000 “Dot-Com Bubble” and the 2008 “Housing Bubble” and the resulting recessions”
The Obama economic record can be summed up with a single word: failure. For this reason, the President is unworthy of a second term in office.