There Is Not Much to Show for the Summer of Recovery
May 7, 2015
Economic growth for the first quarter of 2015 was a mere 0.2 percent making it the slowest recovery in half a century. The Summer of Recovery that Joe Biden promised in 2009 still has not arrived, six years later.
Under Obama's slow-growth economy:
- The United States is $1.6 trillion lower on current gross domestic product than expected.
- American families are earning $20,000 less in annual income.
- Spending structures have fallen by 23 percent.
- The U.S. government has borrowed $7 trillion in six years.
White House estimates on job growth show that the economy performed worse than it would have without the trillions of dollars of government borrowing. In other words, borrowing $830 billion back in 2009 did not improve the economy.
This is a national crisis, not any less significant than the burning of Baltimore last week. Actually, the two may be tied together. Economist Arthur Laffer shows that racial rioting in big cities is negatively associated with the economic growth rate. In the late 1960s and 1970s, cities became war zones, but the rioting almost entirely disappeared in the high-flying 1980s and 1990s, when incomes were rising and job growth surged.
Fortunately, there are natural tailwinds that should accelerate growth over the next year or so. Low energy prices are an underappreciated stimulus. The strong dollar is bringing record amounts of new investment and construction to the United States. Profits, especially for the tech sector and companies like Apple and Google, are still very high.
Source: Stephen Moore, "America's Slow-rolling Economic Crisis," Heritage Foundation, May 5, 2015.
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