Feb 25, 2016
Seven Years After the “Stimulus,” President Obama’s Economic Legacy is Lacking
Post by Derek Yale
Last week marked the seventh birthday of President Obama’s $1.1 trillion stimulus bill, but Americans didn’t celebrate with cakes and balloons. Years after the passage of the massive spending and revenue bill, America is left with a subpar growth, stagnant incomes, low workforce participation and higher poverty.
When the stimulus passed in 2009, President Obama called it the “most sweeping economic recovery package in our history” and declared that it would allow us to “leave this struggling economy behind.” Now President Obama’s recent economic victory laps are ringing hollow as Americans struggle and presidential candidates on both sides of the aisle campaign against the Obama economy. Let’s take a look at the data.
President Obama’s economy has grown at the slowest rate of any administration since World War II.
Since President Obama assumed office, annual economic growth has averaged a mere 1.4 percent, the lowest average growth rate of any administration over the past 70 years. Meanwhile, spending is projected to grow by 32 percent by the time President Obama leaves office. It’s clear that big government hasn’t led to the growth and prosperity that Americans were promised at the beginning of President Obama’s term.
From 2009 to 2014, real median household income fell $1,268 or 2.3 percent.
President Obama’s spending policies have also taken a real toll on Americans’ wallets. With their paychecks getting smaller, Americans aren’t buying it when President Obama touts a strong recovery under his watch.
Under President Obama, the poverty rate has increased from 14.3 percent in 2009 to 14.8 percent in 2014.
Big government policies don’t always affect everyone equally, oftentimes hurting the disadvantaged the most. While large companies have benefited, during Obama’s “recovery” it’s become more difficult for individuals to work their way out of poverty. While spending is often touted as a way to combat poverty, the poverty rate has only increased in an era of record government spending. In 2014, the poverty rate was 25 percent higher than it was in 1976 when 11.8 percent of the population was impoverished. During President Obama’s terms the number of individuals living in poverty has increased by 3.1 million and the number of individuals receiving food stamp benefits increased 12.3 million. Compared to historic recoveries, the number of people who have remained in poverty is staggering.
Unemployment fell because people stopped looking for work.
While President Obama claims that falling unemployment levels demonstrate a strong economic recovery, the statistic only tells a part of the story. The labor force participation rate stood at a near 30-year low in January, meaning that a large amount of individuals capable of working instead gave up looking for a job. As the number of people looking for work falls, the unemployment rate falls as well, but not because those Americans got new jobs.
Americans have seen the very clear evidence that the $1.1 trillion stimulus did not stimulate the economy in the wake of the 2008 financial crisis. Americans are waiting for a new vision that reduces the size of government, removes barriers to opportunity and unleashes our economy’s true potential.