|Obama Now on Course to Preside Over the Worst Economic Growth Since Recordkeeping Began|
By Timothy H. Lee
Thursday, September 08 2011
As if American voters needed additional confirmation of the failure of Barack Obama’s economic agenda, consider the following.
In 1947, the federal government began tracking quarterly gross domestic product (GDP), the broadest measure of overall economic vitality. Since that date, not one President has failed to enjoy a quarter of at least 4% GDP growth. It now appears that Obama may be the first.
President Truman presided over 17.2% growth in the first quarter of 1950, while President Eisenhower reached 12.0% five years later in the first quarter of 1955. The rate peaked for President Kennedy at 8.4% in the fourth quarter of 1961, while the economy grew at rates of 10.2% twice during the Johnson Administration – the first quarters of 1965 and 1966, respectively. President Nixon enjoyed growth of 11.5% in the first quarter of 1971, President Ford saw GDP reach 9.4% growth in the first quarter of 1976, and even the miserable Carter Administration presided over 16.7% growth in the second quarter of 1978.
Under Ronald Reagan, the first quarter following the effective date of his tax cuts in January 1983 saw a 9.3% advance, and a record 26 months of positive GDP growth occurred during the course of that Reagan boom. Under George H. W. Bush, the economy grew 4.5% during the first quarter of 1992, and President Clinton reached a peak of 8.0% in the second quarter of 2000 before handing a tech bubble downturn to George W. Bush, who saw 6.7% growth following his tax cuts in the third quarter of 2003.
Ten quarters into his presidency, however, a tepid 3.9% rate is the highest that Obama has managed to reach.
As reliably as the sun rising in the east, of course, Obama and his critics reflexively blame his predecessor. The economic numbers, however, rebut their rationalization. Specifically, according to federal data, Obama actually inherited an economic cycle on the upswing. The fourth quarter of 2008 saw GDP decline 8.9%, which had already moderated to negative 6.7% in the first quarter of 2009. By the second quarter of 2009, before mobilization of Obama’s massive deficit “stimulus” spending, the GDP reading had risen back to 0.7%.
In other words, the recession had bottomed out before Obama even took office, and ended less than five months into his term.
The economy proceeded to grow 1.7% in the third quarter of 2009, and reached 3.8% in the fourth quarter before peaking at 3.9% in the first quarter of 2010. But then, a new decline began. Economic growth slowed to 3.8% in the second quarter of 2010, then declined to 2.5% for the third quarter, and then 2.3% for the final quarter. The first quarter of 2011 saw growth of just 0.4%, and the most recent quarter came in at just 1.0%.
In other words, economic growth, paltry as it was under Obama, reached its 3.9% peak over one year ago and then began a new decline. But Obama and his apologists ask us to believe that he deserves credit for the upswing that began before he entered the White House, yet the ensuing decline that continues to this day is somehow his predecessor’s fault?
Obama’s own words invalidate that claim. During an NBC “Today” show interview back on February 1, 2009 – almost three years ago now – Obama confidently declared that, “If I don’t have this done in three years, then this is going to be a one-term proposition.”
And what of their defense that “we didn’t realize how bad things were?” Well, first of all, as shown above, the American economy resumed its growth back in 2009, albeit weakly under the Obama regulatory and spending onslaught. So the sky hardly fell. Second, Obama’s alarmist rhetoric during the 2008 campaign and the early days of his presidency hardly suggest moderation or restraint. To the contrary, it’s difficult to imagine more dire descriptions of our economic state. And third, if the Obama Administration proved so incompetent in gauging the state of our economy back then, what suggests that we should accord them more credibility today?
Unfortunately, it now appears that 3.9% is the best that we’re going to see before the 2012 election. In its latest report, the Congressional Budget Office (CBO) has downgraded its expectations and now projects just 2.3% GDP growth for 2011, and just 2.7% for 2012.
Back in January 2009, Obama promised that unemployment would peak at just 8% in the fall of 2009 and be down to approximately 6% today under his trillion-dollar “stimulus.” Instead, we witnessed a post-war record number of consecutive months at or above 9% unemployment, and the rate festers at 9.1% today. And now, it appears that Obama may be the first president who has failed to achieve 4% GDP growth at least once during his tenure.
Despite all of this, as Obama unveils his latest teleprompted economic scheme to a national audience this week, his supporters claim that, “the government needs to borrow and spend more to augment consumer demand.”
Actually, that’s precisely the problem. It’s time to try a different approach, whether under this president or his replacement.
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