Data released this morning from the Bureau of Economic Analysis reveals that GDP growth in third quarter of this year was just 2.0%. On an annualized basis, this amounts to 1.77%. As a comparison, annualized GDP growth at this point in President Reagan’s term was 6.33%.
Soon after he took office, President Obama’s Office of Management and Budget submitted to Congress his budget, which included projections of future economic growth under the President’s plan. Specifically, OMB projected that annual growth in 2012 would be a robust 4.6%—nearly three full percentage points higher than what the nation is now experiencing. (Christina Romer, the President’s former Chair of the Council of Economic Advisers, has equated a change of one percentage point in GDP growth with one million jobs per year.) In every successive year, the Administration continued to dramatically overestimate the growth its policies would produce—with its 2009, 2010, and 2011 projections for this year averaging out to 4.1%.
During the first two years of the President’s term—when his party had supermajority control of both chambers of Congress—President Obama was able to enact virtually every legislative item on his agenda. Chief among these were his signature policy proposals: a near trillion-dollar stimulus package, the Dodd-Frank regulation bill, and the $2.6 trillion health care law.
But the Administration’s other lesser-known economic priorities have also been widely implemented. It has taken aggressive steps to boost food stamp enrollment, arguing that “every dollar of SNAP benefits generates $1.84 in the economy… It's the most direct stimulus you can get.” The Administration also secured a long-term extension of unemployment benefits and an extension of the payroll holiday. (Former House Speaker Nancy Pelosi echoed the Administration’s sentiments on the “stimulative” properties of these policies, stating that “the biggest bang for the buck [is] when you do food stamps and unemployment insurance. The biggest bang for the buck.”) President Obama’s White House has doled out millions of dollars in “investments” to favored green energy firms. And the White House has also implemented many of its desired policies administratively, as it did with the weakening of welfare work requirements and the addition of 3,611 new federal bureaucratic rules last year alone.
To fund this surge in spending, government borrowing has risen by more than $5 trillion since 2009, with gross federal debt now more than $16 trillion.
Unfortunately, this deluge in federal spending and rulemaking has failed to deliver the economic growth that the Administration predicted would result. In fact, independent studies and analyses, including from the Congressional Budget Office, show our huge debt weakens economic growth. Making matters worse and more dangerous, the leaders of the President’s party in the Senate have, in the words of Politico, “defiantly refused to lay out their own vision for how to deal with federal debt and spending” for the past three and a half years.
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