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Wicker: Obama Economy Continues to Stall Job Creation and Growth
President’s Comment That Private Sector Is ‘Doing Fine’ Ignores Troubling Economic Outlook
Monday, June 18, 2012
The evidence is increasingly clear that three-and-a-half years of the Obama Administration’s policies have made our country’s tough economic situation worse. For 40 consecutive months, the unemployment rate has been 8 percent or higher – the longest period of chronically high joblessness since World War II. Economic growth has yet to make a significant rebound, and record numbers of Americans are dropping out of the workforce altogether.
With so many broken promises, President Obama has failed to lead. The stimulus measures that were guaranteed to keep unemployment from going higher than 8 percent did not work, and many of the programs ended with excessive waste.
Out of Touch With Economic Reality
At a news conference earlier this month, the President told reporters that “the private sector is doing fine.” He went on to insist that more government spending is the answer to our economic problems – a misguided approach that the White House continues to advocate despite the lessons of the nearly $1 trillion stimulus and month after month of weak economic reports.
Not surprisingly, a firestorm quickly erupted in response to the President’s blunt dismissal of setbacks in the private economy, causing members of his own party to distance themselves and the President to backtrack on the comment later that day.
In no way does “doing fine” describe America’s current economic reality. Private-sector employment can barely keep up with population growth. The number of jobs created last month was the lowest in a year.
Reagan Recovery vs. Obama Economy
With the federal debt nearing $16 trillion, more borrowing and spending would only worsen the uncertainty that is hampering job creators from expanding their businesses and adding to their payrolls. Instead, Congress and President Obama should adopt solutions that build confidence, like extending tax rates – currently the highest in the world – removing unnecessary regulatory burdens, and getting serious about the national debt.
President Ronald Reagan used similar tactics to recover from the recession of 1981-82, and the economic growth that followed was much different than the stagnant Obama Economy today. Under President Reagan’s leadership, our gross domestic product (GDP) grew by an annualized average of 6.1 percent each quarter. In contrast, GDP has grown by an annualized average of only 2.4 percent per quarter under President Obama’s policies, increasing by a dismal 1.9 percent so far this year.
Worrisome Drop in America’s Workforce
One of the most troubling economic numbers is the decline in the country’s labor force participation. Instead of 8.2 percent, the unemployment rate would be a staggering 11.9 percent if it included the number of Americans who have left the workforce since the recession started. In April, civilian employment reached its lowest level in 30 years.
A lasting economic turnaround will take leadership that recognizes the limits of government spending and the potential that small businesses have to reignite job creation. The President’s disillusion that the private sector is doing fine ignores the depth of our country’s economic situation and the ways that this part of our economy will play an important role in bringing about a true recovery.
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