Three years ago today, President Barack Obama signed into law his trillion-dollar stimulus plan, a measure that he promised would save or create 3 million jobs by the end of 2010 and would prevent unemployment from ever going above 8 percent. And though the President today will likely claim that thanks to his efforts, the U.S. economy is surging, don’t believe him. The verdict is in: Obamanomics has failed.
But you don’t have to take our word for it. Yesterday, the Congressional Budget Office (CBO) released a report offering an analysis of the last three years of the Obama economy. In short, the stimulus did not live up to the President’s promises.
The CBO writes that America’s unemployment rate has exceeded 8 percent since February 2009, making this the longest stretch of high unemployment since the Great Depression. To make matters worse, unemployment will remain above 8 percent until 2014. And the level of long-term unemployment — those looking for work for more than six months — is over 40 percent, the highest since at least 1948, when that data was first collected.
“But wait a minute!” you might shout, “There are jobs being created; we’re on the road to recovery.” True enough. The White House brags that 257,000 jobs were created in January and that the economy has added private sector jobs for 23 straight months. While those are good numbers, bear in mind that in this case, the beauty of the Obama economy is only skin deep and that lead has not quite been turned into gold. In fact, the strength of the U.S. economy’s recovery is much weaker than advertised. And though the President would like to credit his stimulus with today’s growth, keep in mind that the stimulus ended one year ago. Obamanomics would have predicted faster growth sooner, not later, and certainly not after the stimulus wound down.
In a new report, Heritage’s James Sherk explains that today’s economic growth needs to be viewed in its proper context — in the aftermath of the worst recession in two generations, today’s recovery is remarkably slow. Though the economy is growing, the current economic recovery is the slowest recovery in the post-war era. Four years after the recession started, the economy still has not replaced the jobs lost in the downturn. And while the economy normally grows rapidly after a steep recession, hiring rates today remain one-sixth below pre-recession levels. What’s the future hold? At current rates of job creation, the economy will not return to normal rates of unemployment until 2015.
The dismal economy is having a terrible impact on America’s workers. Sherk writes that millions of Americans have stopped trying to find jobs, and today only 63.7 percent of adult Americans are active in the labor force, meaning that they’re either employed or looking for a job. That’s the lowest level since 1983.
If you think that’s bad news, there’s even more in store for America. “Small businesses currently identify taxes and government regulations as their most important problems,” Sherk writes. “Businesses are forward-looking and fear that Congress will raise taxes to cover the cost of the recent federal spending spree.” They’re not about to get relief any time soon. On Monday, President Obama unleashed his FY 2013 budget, delivering an annual deficit exceeding $1 trillion. For those keeping score, it’s the fourth such trillion-plus budget the President has produced. Even the President’s own Treasury Secretary Timothy Geithner says the level of spending is “unsustainable.”
Yesterday in testimony before Congress, Geithner admitted that “Even if Congress were to enact this budget, we would still be left with–in the outer decades as millions of Americans retire–what are still unsustainable commitments in Medicare and Medicaid.” That’s not the kind of news America’s job creators need to hear if they are to gain the kind of confidence in Washington that will encourage them to go forth, invest, and create new jobs.
But that is the story of Obamanomics — a black hole of government that sucks the energy out of America’s job-creation machine in order to fuel an ever-expanding bureaucracy. This trend must end. Washington should adopt pro-growth policies like the job-creating New Flat Tax, allow the exploration and use of American fossil fuels, pursue free trade policies, cut unnecessary regulations, and deliver a budget that gets government under control. Americans have suffered long enough, and they can’t afford to wait any longer.