There can be no doubt that Barack Obama started his first term under seriously adverse economic conditions. The financial crisis of September 2008 had hit the U.S. economy very hard. The new president confronted an uphill task. Unfortunately, Obama was ill-suited to that role, utterly ignorant himself of economics and loading himself with a team of socialist, hydraulic Keynesian, economic advisers – Larry Summers, Christina Romer and Timothy Geithner – who would have led any administration straight downhill.
So let us now set out a report card four years on, which allows sufficient time to make a sensible assessment of economic performance during Obama’s four year incumbency.
At Obama’s first inaugural, 134.379 million Americans were working and unemployment was 7.3 per cent. Four years later, 134.01 million are working and unemployment is 7.8 per cent.
In January 2009, 32.2 million Americans were on food stamps and 13.2 million Americans lived in poverty, with the poverty rate at 13.2 per cent. Four years on, 47.5 million Americans are on food stamps and the rate of poverty has risen to 15 per cent.
In January 2009, Social Security’s trustees forecast that the trust fund would run dry in 2041. Four years on, the forecast date is 2037. Medicare’s trust fund has experienced a similar rate of decline. It will go bust in 2024, if not earlier, instead of 2030 as predicted in 2009.
On January 20, 2009, the national debt stood at $10.627 trillion, or $34,782 for every individual in the United States. Four years later, it stands at $16.435 trillion, or $$52,139 for every individual in the United States.
In January 2009, the median household income was $51,190. In 2011, it had fallen to $50,054. Household income actually fell more after the recession officially ended in June 2009, than it did during the recession itself. This is a first ever such phenomenon for the United States.
In fiscal year 2008, the federal government took in $$2.524 trillion in revenues and outlayed $2.983 trillion in expenditures. In fiscal year 2012, revenues are expected to reach $2,913 trillion (more than four years ago), while outlays will explode to $3.554 trillion. There is the debt problem in a nutshell. And it is not driven by any fall in tax revenues.
Allowing for the magnitude of the initial task, and for the inexperience of Barack Obama, the economic report card for his first term comes in at a generous D grade. If it is repeated for his second term, a resounding F will be recorded, and this president will go down as the worst in the history of the republic in terms of economic failure.
Hat Tip: Karl Rove, ‘After Four Bleak Obama Years, an Opportunity’, The Wall Street Journal, January 20, 2013