Peter Ferrara, Contributor
The record of President Obama’s first three years in office is in, and nothing that happens now can go back and change that. What that record shows is that President Obama, with his throwback, old-fashioned, 1970s Keynesian economics, has put America through the worst recovery from a recession since the Great Depression.
The recession started in December, 2007. Go to the website of the National Bureau of Economic Research (www.nber.org) to see the complete history of America’s recessions. What that history reveals is that before this last recession, since the Great Depression recessions in America have lasted an average of 10 months, with the longest previously lasting 16 months.
When President Obama entered office in January, 2009, the recession was already in its 13th month. His responsibility was to manage a timely, robust recovery to get America back on track again. Based on the historical record, that recovery was imminent, within a couple of months or so. Despite widespread fear, nothing fundamental had changed to deprive America of the long term, world-leading prosperity it had enjoyed going back 300 years.
Supposedly a forward looking progressive, Obama proved to be America’s first backward looking regressive. His first act was to increase federal borrowing, the national debt and the deficit by nearly a trillion dollars to finance a supposed “stimulus” package, based on the discredited Keynesian theory left for dead 30 years ago holding that increased government spending, deficits and debt are what promote economic growth and recovery. That theory arose in the 1930s as the answer to the Great Depression, which, of course, never worked.
That was the beginning of President Obama’s Rip Van Winkle act, pretending not to know anything that happened over the previous 30 years proving the dramatic, historic success of the new, more modern, supply side economics, which holds that incentives for increased production are what promote economic growth and recovery. Indeed, that Rip Van Winklism pretended not to remember the 1970s either, when double digit inflation and double digit unemployment proved Keynesian economics grievously wrong.
As should have been long expected, Obama’s trillion dollar Keynesian stimulus did nothing to promote recovery and growth, and almost surely delayed it. That is because borrowing a trillion dollars out of the economy to spend a trillion back into it does nothing to promote the economy on net. Indeed, it is probably a net drag on the economy, because the private sector spends the money more productively and efficiently than the public sector.
The National Bureau of Economic Research scored the recession as ending in June, 2009. Yet, today, in the 49th month since the recession started, there has still been no real recovery, like recoveries from previous recessions in America.
Unemployment actually rose after June, 2009, and did not fall back down below that level until 18 months later in December, 2010. Instead of a recovery, America has suffered the longest period of unemployment near 9% or above since the Great Depression, under President Obama’s public policy malpractice. Even today, 49 months after the recession started, the U6 unemployment rate counting the unemployed, underemployed and discouraged workers is still 15.2%. And that doesn’t include all the workers who have fled the workforce under Obama’s economic oppression. The unemployment rate with the full measure of discouraged workers is reported at www.shadowstats.com as about 23%, which is depression level unemployment.
Today, over 4 years since the recession started, there are still almost 25 million Americans unemployed or underemployed. That includes 5.6 million who are long-term unemployed for 27 weeks, or more than 6 months. Under President Obama, America has suffered the longest period with so many in such long-term unemployment since the Great Depression.
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another jeuvenile smear/blame Obama for everything in the galaxy, hit piece , passed on by mini-drudge himself, the woodsheddar
here’s an equally jeuvenile rebuttal — jan 08/obama inauguration – dow 7k, spx 800
today dow 12.5k, spx 1300
Obama has led one of the greatest market comebacks in history and hence he’s saved the free world .. long live Obama!
whatever .. I guess we’ll have to put up with another 10 months of woodshedders too balanced news, only matched by fox news too balanced news
8)
Juice, nice that you could not pick out even one fact of the article to disagree with. By the way, it is a Forbes piece.
Does it make you feel impotent to see your guy eviscerated like that when you know there is nothing you can say to disprove the assertions made in the piece?
wait till you see tomorrow’s documentary….your politics will vanish 4ever
Cronk, what documentary are you speaking of?
juice is classic boomer. probably has no clue his kids despise the 0 and are voting for ron paul. juice’s gardener hates him too. but juice gives him gift cards to chipolte so it is understandable. in the land of juice everything is fine, botox proves it. its the sixties all over again only this time old assholes are cool.
This article is beyond idiotic. Borrowed a trillion dollars out of the economy? The author needs to get a clue about how the system functions before typing up such a hit piece. The federal deficit is the only thing keeping this country from recession.
And doesn’t this guy realize that once the govt spends money into the economy then it is there for the private sector to use! It doesn’t just vanish. So what is the difference between “spending” into the economy and paying joe blow 20 bucks or “giving” him 20to bucks so he can spend it efficiently. Obamas policies may suck, but like I said at least get the facts right before writing a hit piece.
Brian, when the gov’t taxes the citizens and then puts that money back into the economy, it does so very inefficiently and it crowds out private-sector spending. The only private-sector companies that appear to have been able to use stimulus funds were those like Solyndra, Gov’t Motors, and other companies run by donors to the Democrat machine.
I’m not disputing that it may have saved us from a depression, but it certainly highlights the many and varied problems that come from gov’t picking winning and losers.
And that was out of Forbes? Reads more like the Enquirer.
You must be used to the sugar-coated reporting of the Obama Palace Guards over at the Associated Press.
But the govt spends by creating money, not through taxes. So its not like the govt collects one trillion and says “ok time to spend it back in!” It just doesn’t work that way. The stimulus added money to the private sector. Whether it was paid to gm or not does not matter technically but it does ethically. Gm will use that money to pay salaries and those workers then spend the money into the economy.
If you see what I am getting at taxes don’t fund anything, they are now just a way to remove excess money from the private sector. Since the private sector is deleveraging taxes should be lower and govt spending higher. The crowding out effect is a theory only relevant when we had a convertible currency.
Brian, I don’t know where to begin with your comment. There are too many things you are incorrect about for me to respond this late in the evening.
(fist shaking) OBAMA!!!!
I try to avoid.mainstream media.but sometimes can’t help myself. The internet is a funny place. Common knowledge becomes so common no one bothers to research it or see if it actually true. Take the crowding out effect or that govt spending is funded by taxes. You can’t even call govt stimulus Keynesian because keynes policies applied to a currency.backed.by gold.at.a.fixed rate. Todays dollar uses a floating rate system backed by nothing.
Hey Brian, read this.
President Obama’s economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.
CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.
http://www.washingtontimes.com/news/2009/feb/04/cbo-obama-stimulus-harmful-over-long-haul/
The Congressional Budget Office on Tuesday downgraded its estimate of the benefits of President Obama’s 2009 stimulus package, saying it may have sustained as few as 700,000 jobs at its peak last year and that over the long run it will actually be a net drag on the economy.
CBO said that while the Recovery Act boosted the economy in the short run, the extra debt that the stimulus piled up “crowds out” private investment and “will reduce output slightly in the long run — by between 0 and 0.2 percent after 2016.”
The analysis confirms what CBO predicted before the stimulus passed in February 2009, though the top-end decline of two-tenths of a percent is actually deeper than the agency predicted back then.
http://www.washingtontimes.com/news/2011/nov/22/cbo-stimulus-hurts-economy-long-run/?page=all#pagebreak