Did Obama stimulus actually stimulate much?

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  • The unemployment rate four years ago, in October 2008, was 6.5 percent. Four years later, it is 7.8 percent. @Nickschulz

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  • The recession officially ended in June 2009. Since then, median household incomes have dropped more than 4% @Nickschulz

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  • Are you better off than four years ago? How you answer may determine who wins the presidential election @Nickschulz

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Is the country better off than it was four years ago? Are you and your family better off than you were four years ago? How you answer those questions may determine who wins the presidential election.

Quinnipiac University pollsters recently asked likely voters if the country was better off today than it was four years ago. Four out of 10 said the United States was better off; but 45 percent said the country was worse off. Fifteen percent said it was doing about the same, meaning 60 percent of respondents believe there’s been at best no progress after four years.

The same poll asked respondents if their families were better or worse off. While 25 percent said they were better off, 34 percent said they were worse off.

CBS and The New York Times also recently asked people if both the country and their families were better or worse off. Once again, respondents were more likely to say the country and their families were worse off.

Why would more people think the country is worse off? After all, as President Barack Obama points out, he has brought home troops from Iraq and Afghanistan, Osama bin Laden is dead, and the nation has emerged from the Great Recession.

But other yardsticks tell a less fortunate tale. The nation is significantly more indebted than it was just four years ago, after several years of running trillion-dollar budget deficits. This means an already big fiscal hole became much bigger over four years; and it’s a hole that will be tough to get out of, given the enormous unfunded liabilities in the nation’s health and pension programs in the years ahead.

The unemployment rate four years ago, in October 2008, was 6.5 percent. Four years later, it is 7.8 percent. At the same time, many more people today have simply dropped out of the labor force, too discouraged to look for work.

While the economy has recovered somewhat from the Great Recession, for many people it hasn’t felt like a recovery. The recession officially ended in June 2009, but since then, median household incomes have declined more than 4 percent, according to an analysis of Census Bureau data by Gordon Green and John Coder.

How much blame Obama deserves for the current state of the economy is an interesting parlor game. His supporters say he inherited a mess — a weakening economy with a deepening financial crisis — and that he took many steps to make that awful situation better.

On the other hand, Obama’s critics argue that his stimulus did not stimulate very much; that his spending contributed significantly to the ballooning debt; that unemployment has for too long hovered around 8 percent, which is alarmingly high by American standards; that he focused on health care reform when job creation should have been the priority; and that the world — from Syria, to Libya, to Iran, to Russia, to North Korea — may well be more dangerous and hostile to the United States than it was when he took office.

During the 1980 election, candidate Ronald Reagan said to Americans, “It might be well if you would ask yourself, ‘Are you better off than you were four years ago?’”

Americans at the time believed the nation was weaker at home and abroad and put the Gipper in office for the first of two terms. Thirty-two years later, on Nov. 6, it will be interesting to see how Americans answer the same question.

Nick Schulz is the DeWitt Wallace fellow at the American Enterprise Institute and may be contacted at aei.org.

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About the Author

 

Nick
Schulz

  • Nick Schulz was the DeWitt Wallace Fellow at AEI and editor-in-chief of American.com, AEI's online magazine focusing on business, economics, and public affairs. He writes the “Economics 2.0” column for Forbes.com where he analyzes technology, innovation, entrepreneurship, and economic growth. He is the co-author with Arnold Kling of From Poverty to Prosperity: Intangible Assets, Hidden Liabilities, and the Lasting Triumph Over Scarcity. He has been published widely in newspapers and magazines around the country, including The Washington Post, The Wall Street Journal, the Los Angeles Times, USA Today, and Slate.


  • Phone: 202-862-5911
    Email: nick.schulz@aei.org

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