According to his economists, the trillion dollar stimulus program was a bust!
Lots of MSM headlines these days about the strong economy that Obama is handing Trump … with a strong suggestion that Trump will have a hard time matching Obama’s stellar performance as a job creator.
On the plus side, the reported unemployment rate has dropped from the financial crisis highs.
For today, we’ll push aside the facts that (a) American’s who have been economically crushed largely voted the Dems out of office; and (2) the labor force participation rate has dropped precipitously – giving the unemployment rate a faux boost.
But, let’s dig a little deeper into the numbers … using the Administration’s own analyses.
For openers, the Fed’s free money policies have been stimulative, for sure.
But, the Fed is supposed to be Chinese-walled away from the Executive Branch, so Obama can’t claim credit there (or he has to admit to meddling).
So, there were – as near as I can tell – 3 stimulative actions that Obama took: (1) bailing out the auto industry … an action started by Bush; (2) trying to boost the green energy sector – by tightening regulations on carbon producers and shoveling money to Musk, Solyndra, etc., and (3) the trillion dollar stimulus package.
The latter is the biggest kahuna, so let’s focus on it.
In January 2009, Obama economists Jared Bernstein and Christina Romer issued a report modeling the US economy with and without the trillion dollar fiscal stimulus package.
The light blue line is essentially the “do nothing” scenario – just riding out the “natural” economic cycle.
Let’s add some data points to see what materialized.
James Pethokoukis of AEI has tracked progress by annotating the Bernstein-Romer chart.
Note: I’ve added the most recent data points
The bottom line:
Based on the Administration’s own projections, the economy would be about where it is even if Obama’s stimulus hadn’t been enacted.
Said differently, if we had done nothing, the net effect would have been to dodge boosting the National Debt by a trillion dollars.
Rather than oval office-induced job creation, it looks to me like the business cycle is alive and well …