It’s been said before, many times in fact, but Senator Chuck Grassley’s recent reassertion that, “It [the economy] has gotten worse under Obama” continues to be a head scratcher for those with memories that span beyond the latest cable news cycle. The repetitious Republican talking point has indeed become fact for many who loyally follow the conservative platform yet for many others the drumbeat message eventually makes them ask themselves, “Has the economy really gotten worse under President Obama.”
The short answer is, “Yes,” but the the more insightful, pragmatic answer is, “No.” It’s confusing, I know, but bear with me while I hash out an explanation.
When President Obama was inaugurated on January 15, 2009 unemployment was at 7.8% . Later, reported at 8.3% for the month. The national debt was at $10.6 trillion. Budget deficits were at $485.2 billion, up from $161 billion the previous year. The American public, along with virtually every other nation in the western world, were in a panic. By mid-year unemployment hit 10% and debt was building up at a rapid pace. Fast forward to the present, national debt has hit $15.9 trillion. There is a budget deficit of $974 billion and unemployment is stubbornly high. Has the economy become worse since inauguration day 2009? Technically, yes it did.
It’s very difficult to look at those figures and not feel distraught. The masses who voted for the President have long since wondered where all that “Hope and Change” ended up. Don’t give up quite yet, though. Remember, the second answer to the question? But how could the economy have improved given all those negatives. Well let’s look a bit closer at the real situation.
Yes, after January 2009, the economy did in fact worsen. If we only looked at that the Republican Party’s criticism is wholly true. However, the first term of the Obama presidency did not exist in an isolated stretch lasting a single year. Taking a page from Ronald Reagan’s 1984 Republican National Convention speech,
“Our opponents began this campaign hoping that America has a poor memory. Well, let’s take them on a little stroll down memory lane.”
Unemployment bottomed out at 10% in the summer of 2009 but it has trended downward ever since reaching 8.2% in 2012, less than Obama’s first year in office. Yes, it did increase slightly, back to 8.3%. The private sector has grown, adding jobs every month for more than two years. Much of that growth has been blunted by losses in the public sector as a result of government cuts. It’s quite possible the unemployment picture would be better if stimulative efforts had continued as they did in past downturns.
Roughly 8.4 million jobs were lost during the recession, most between September 2008 and April 2009. (This despite the supposed 23 million unemployed individuals Mitt Romney has attempted to place on his opponent’s shoulders.) By inauguration day 2009, the economy was hemorrhaging 600,000 plus jobs each month. By the end of it all, the numbers were essentially split down the middle for Bush and Obama. Both presidents had to accept that during the worst part of the recession ~4.2 million jobs were lost under each of their administrations. Since then, we’ve seen 4 million jobs added to the economy over the last 3 years. Given the depths of the recession, gaining back almost half of those lost in a relatively short amount of time hardly speaks to the failed policy the Republican Party seeks to illustrate. Those claims become more erroneous when one considers those 4 million created jobs represent virtually all those lost under President Obama.
Debt has risen under this presidency but while many would like to leave that statement closed right there, “We have the highest debt ever under Obama”, the factors behind that high debt are more consequential than just having that “big government spender” in the White House. First, the current debt we have now is an accumulation of numerous administrations reaching back to Ronald Reagan. Each president’s administration contributed to the current national debt we have, from Reagan to George H.W. Bush to Clinton to George W. Bush to Barrack Obama. Of the total current debt, which sits at $15.9 trillion, almost half (42.7%) was accrued under George W Bush. Debt under President Obama comes in a distant 2nd place at 16.8%. Reagan is third (13.2%) with Clinton, the first President Bush and all administrations prior to Reagan accounting for the remaining 27.3%.
The primary contributors to the debt under the Obama administration include the three largest contributors to Bush’s debt load, the Bush tax cuts, the Afghanistan and Iraq Wars and the Medicare prescription drug plan, most of which remained as bills-to-be-paid through the last 4 years. However savings have been achieved through ending of the Iraq War and Medicare provisions included in the Affordable Care Act. Also, as noted previously, 8.4 million jobs were lost during the Great Recession. That in of itself represented a significant reduction in government revenue for state and local governments up through to the federal levels. And last but not least, the Stimulus Bill’s contribution was significant, yet many economists deem the benefits will outweigh the costs in the coming years, as it was credited with placing the US on the path to recovery.
National Republicans point to Gross Domestic Product (GDP) as an indicator of the president’s failings. They point to the last two fiscal quarters of 2012 as proof. However, when we look back at GDP’s overall performance during Obama’s first term, the current status of GDP is hardly a critique of this president’s broader fiscal policy. From its depths in the first quarter of 2009, a -8.9% growth rate, GDP has increased under Obama breaking out of the negative zone by late 2009 never to drop out of positive growth rates again. It has experienced ups and downs over that time. A prime example is how it dropped to 0.4% in March of 2011 yet by the end of that year and on into Q1 2012 it rose back to 3%, even amidst double-dip recession predictions which ran rampant across the media landscape 2 months before.
With the 2012 Republican Convention behind us the GOP campaign begins anew. Perhaps feeling the etch-a-sketch has finally been thoroughly shaken out, their candidates and their surrogates are spreading out in force to counter the upcoming Democratic Convention. They will continue to press into voters’ collective consciousnesses that the economy is worse now more than ever. They will latch onto the fine line Democrats are walking when asked, “Is the country better off now”. Paul Ryan has grown fond of saying, this is the worst recovery since the Great Depression. A proper, contextual response may be, “Well, yes, yes it is. But isn’t that because we are, in fact, recovering from the worst recession since the Great Depression.” As yet, it does not appear anyone has confronted Mr. Ryan pointing this out to him.
This may go a long way to explaining why this particular recovery is not progressing as quickly as many would like. The country, and the world, took a tremendous hit with many countries still clamoring to pull themselves out onto stable ground. However, it is worth noting, with Europe taking the austerity route – the same one Republicans promote – the US is just about the only western world nation that is not in a double-dip recession or on the verge of falling into one.
In of itself, is that not proof that the policies of this administration are far from a failure? Amidst all the economic turmoil of the Great Recession, the continued economic battles we’ve seen our world partners struggle to overcome along with the ongoing gridlock of a dysfunctional Congress it is truly astonishing this country was able to recover at all, let alone come out ahead of where we were just 3 short years ago.
Has the economy truly gotten worse under President Obama? After taking that trip down memory lane, the only accurate answer is, “No. No, it hasn’t.”
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