This is part one of a two-part series on the actual state of the nation. This piece focuses on the economy.
When President Obama on Tuesday night in his final State of the Union touts the so-called economic recovery that occurred under his watch, Americans around the country will be asking themselves: “What recovery?”
The economy is stranded in a tepid state of slow growth, with job loss from international competition, declining incomes, overregulation, a flood of immigrants into the labor force and a shrinking middle class.
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“That tells you everything that’s happening to the American Dream,” said Laurence Kotlikoff, an economics professor at Boston College. “It’s not dying, it’s dead. It’s over.”
You’ve seen the blaring headlines. You’ve heard them from Obama over and over.
Unemployment has been halved from 10 percent in 2009 to just 5 percent today, the federal deficit has been whittled down from $1.4 trillion in 2009 to under $439 billion in 2015, the stock market has enjoyed some of its best years ever, and gas is cheap — resulting in the auto industry’s record sales in 2015 after nearly going under completely in 2008.
These things are true, but they are an illusion of success. They look good only on Obama’s teleprompter.
The “recovery” plan that Obama imposed on the American public once he was elected consisted of rehashed Keynesian concepts such as increased government spending, expanded welfare programs, handouts for cronies, cheap money policies and a quasi-takeover of health care by the government.
The end result: Though the wheels are spinning, we aren’t going anywhere. Let’s put aside Obama’s rhetorical flourishes and consider the true state of the union:
- The U.S. economy has averaged just 1.4 percent annual growth under Obama’s watch.
- Americans are giving up on work in droves not seen since the Jimmy Carter era. In December 2015, 94.1 million Americans were out of the labor force, with just 62.4 percent of people actually working or looking for work. This trend isn’t just due to retiring baby boomers; many of those who are quitting work are between the prime ages of 25 and 54, claiming disability, illness or “home responsibilities” as their justification.
- Economics 101 suggests that as unemployment falls and labor becomes more scarce, wages will increase. But this is not happening, despite the waving of the magic minimum wage wand by liberals. While the U.S. has returned to five percent unemployment — which economists deem to be the rate of “full” employment — wages have remained stagnant. Median household income, adjusted for inflation, has fallen from $57,843 in 1999 to around $54,000 today.
- Sixty-three percent of Americans do not have enough savings to pay for a $500 car repair or a $1,000 emergency room bill, according to a new survey by Bankrate.com.
- While approximately 8 million new private sector jobs have been created under Obama’s economic recovery, this growth has been concentrated in low-wage industries such as food service, home health care and retail. These jobs accounted for just 22 percent of the jobs lost during the 2009 recession, according to the National Employment Law Project.
- As decent-paying middle class jobs disappear, young Americans have taken on a whopping $1.2 trillion in student loan debt to remain competitive in the job market. On top of this, they are forced to play ball in the intergenerational Ponzi schemes known as Social Security and Medicare, which taxes young workers to pay for consumption by the elderly.
Those who dare blame the president for this decline of American society under Obama have watched as their criticisms are rerouted to George W. Bush, Obama’s predecessor and ever-convenient scapegoat who supposedly screwed up everything by leading the country into the worst recession in 70 years.
But Obama’s time to hide behind Bush — and misleading statistics that seem to show economic improvement — has run out. His actions undertaken in the name of advancing “social justice” have created landmark new barriers to entrepreneurship and growth. Since 2008, new regulations have added $100 billion in new compliance costs, according to the American Action Forum. To enforce these, the U.S. government has more than 246,000 employees, who collect $16.7 billion in annual salary and devote a total of 9 billion hours each year to paper shuffling.
Obamacare, the signature health care law that was supposed to aid the nation’s working class, has snarled the small business community. Workers in small businesses have seen their wages cut by $22.6 billion because of Obamacare regulations, according to AAF. And a recent survey by the National Federation of Independent Businesses found that 63 percent of small business employers saw their health insurance premiums rise between July 2014 and July 2015.
Put all of this together, and even some liberals concur that we’re sailing into rough waters.
“The next president will inherit an economy teetering on the edge of recession,” predicted Robert Reich, a liberal economist and former Labor secretary under Bill Clinton.