During his first two years, with the support of commanding Democratic majorities in Congress, President Obama placed the biggest bet in US history on centralized government power. We lost. We’re still losing.
Like President Obama, President Reagan inherited a deep recession when he took office in 1981. But his strategy of expanding liberty by removing regulatory barriers and implementing across-the-board tax cuts to empower investors and entrepreneurs was a sparkling success. The People rewarded him with a 49 state, reelection landslide.
Rather than repeat Reagan’s proven strategies President Obama went with the unproven Keynesian economic theory that a spike in government borrowing and spending could “stimulate” growth. Instead of expanding liberty he expanded government. His massive borrowing and spending, grants and loans to “green” energy schemes run by political cronies, ObamaCare, expanding federal regulations, and the constant threat of tax hikes on businesses and investors have yielded tragic results. Unlike Reagan, Obama’s reelection odds are now no better than 50-50.
As the chart shows we are living through the most anemic post recession period of all.
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 thundered into office with several grand schemes to use government power to “fundamentally transform” America. He and the Washington expert elite promised that a massive increase in borrowing and spending would “stimulate” the economy and bring forth prosperity for all.
Those experts now say their economic failure results not from too much government borrowing and spending but from too little! The opinion columns regale us with pseud0-academic harangues that actually label Obama’s record shattering deficits “austerity” and insist that even more borrowing will fix what ails us.
So is this a valid idea? Were all the previous recoveries more prosperous because government borrowed more?
The chart to the left shows the percentage of government spending that was borrowed during each of the post recession periods in the chart above. It turns out Obama’s borrowing is alreadyway ahead of every previous recovery! If your gut tells you we’ve already borrowed too much and gotten too little for it, history, as shown in the chart agrees with you gut.
The Bottom Line
Economic growth as measured by Gross Domestic Product has been a deep disappointment under the Obama borrow-spend-regulate approach. There is no reason to believe that massive deficits, constantly threatening major tax increases, government take-over of health care and subsidies to blue-sky energy schemes will ever result in a return to growth and prosperity. As Candidate Obama said in 2008, it’s time for a change.