Desperate to make his case for reelection President Obama continuously reminds us that he began his term with an inherited recession. If he does win the election his second term may well start with an inherited recession.
Little noticed by the establishment media, the Commerce Department revised it’s estimate of second quarter economic growth downward from 1.7% to 1.3%. The trend suggests an economy deteriorating toward, rather than growing away from, recession.
For perspective, average quarterly GDP growth over the half century from 1957 to 2007, a period that included seven recessions, was 3.3%, with much higher rates being normal whenever the economy was emerging from a recession.
The President’s evaluation of his economic performance, always echoed by the media, is that he deserves another term because the deep recession that began in 2008 – when, as we are reminded daily, George W. Bush was President – ended, and a recovery began in the second half of 2009. [Continued below the chart.]
But the media never provide the context. All recessions, defined as periods of shrinking GDP, come to an end. There is no historic example of a recession that did not end, no matter who was President, no matter which party was in power, no matter what policies the government pursued.
The President’s aggressive, big government interventions into the private sector economy should be judged a success only if they produced a more robust recovery than the policies of previous administrations, especially those that reduced government’s footprint, as the Reagan Administration did in the eighties.
As the above chart shows, after twelve quarters the current recovery ranks dead last, number ten out of ten since the government began tracking quarterly GDP growth in 1947. Because the recovery is so weak, millions of Americans believe the economy is still in recession.
A major pillar of the progressive philosophy Obama represents is the belief that an interventionist government, advised by “experts” can achieve better economic results than we’ll experience if liberty and free enterprise are allowed to function, without supervision. Obama and most Democrats believe all the justification they need for government to take on a new power or fund some a project is a favorable opinion from Washington’s experts, the ones Obama likes to call “independent economists.”
Barack Obama thundered into office at the beginning of the second year of the recession, with grand schemes to use government power to “fundamentally transform” America. He and the Washington expert elite promised that his massive increase in borrowing and spending would “stimulate” the economy and bring forth prosperity for all.
More of he President’s experts said “an economy built to last” had to include a new government take-over of the health insurance sector, and literally thousands of pages of new regulations over the terms of health plans and the ways employers provide and administer them.
Those experts now say our torpid economy suffers not from too much government spending but from too little! They actually call Obama’s record shattering borrowing, spending and deficits “austerity” and insist that even more spending would “work.” Thus the Obama campaign now blames House Republicans because they have not enacted yet another spending increase.
So, is prosperity through government spending and intervention a valid idea? Were all the previous recoveries from recession stronger because government increased spending even more in the second year of those recessions? [Continued below the chart]
As the chart shows, Obama’s spending surge, to fund his stimulus, a home buyers tax credit, Cash for Clunkers, ObamaCare, green energy subsidies, state and local government subsidies, and across the board increases in almost every department and agency of government was far larger than the second year spending increase in any previous recession.
If your gut tells you we’ve already borrowed and spent too much and gotten too little for it, history, as displayed in these charts agrees with you gut.
The Truth Mitt Romney should expose in Wednesday’s debate:
Economic growth as measured by Gross Domestic Product has been a deep disappointment under the Obama borrow-spend-regulate approach. There is no historical evidence to support Obama’s claim that even greater spending will bring back prosperity. As Candidate Obama said in 2008, it’s time for a change.