Wednesday, January 04, 2017

Obama's economic legacy is actually pretty good

As Donald Trump gets set to take the reins of the American economy, and world news is already taking on a All Trump All The Time aspect, this would be a good time to take stock of the US economy and to assess what Barack Obama really achieved during his 8 years in power. This is partly to set the stage, and to make sure that Trump does not go claiming victories that were not his own, and partly to point out to those who voted for Trump the extent to which they were taken for a ride during the election campaign.
In 2008, Obama took over an economy in tatters, after four years of neglect and mishandling by his Republican predecessor. Since then, he has managed to right the ship and correct its course, at least in most respects, despite being severely hampered by an antagonistic Republican Congress. However, Donald Trump campaigned on a barrage of misinformation and sensationalist claims about how the US economy is in free fall, and how only a complete break with the old policies can save it from destruction and ignominy.
  • After taking over an economy mired in the so-called Great Recession (and which could easily have become much worse), Obama has overseen a constant gradual economic growth, month on month. The average growth under Obama has been about 2%, less than the pre-Recession average of 3% but not by that much.
  • The unemployment rate has dropped from a nadir of 10.1% early in Obama's tenure to 4.9% in 2016. The country has been benefitting from the longest period of concerted job creation since records began. Over 11 million more people have found employment, filling the tax coffers and generating economic activity.
  • Partly as a result of this increased employment, the federal budget deficit has come down steadily from a massive $1.4 trillion in 2009, early in Obama's tenure, to $587 billion in 2016.
  • The stock market had also seen a steady upward trend since early 2009, reaching all-time highs.
  • Government spending has increased by an average of just 3.3% per annum (or 1.4% according to some analyses), less than half the spending increases under Republicans like President Reagan or George W. Bush.
  • For 95% of American taxpayers, tax rates are now lower or exactly the same as they were when Obama took office. In fact, only those earning more than $400,000 a year have seen their tax rates increase.
  • Under Obama, American oil production has reached record heights, to the extent that the country now exports more than it imports, and the USA's dependence on foreign oil has been hugely decreased.
  • Between 12 and 18 million more Americans (depending on whose statistics you want to use) now have health insurance than before Obama came to power, resulting in the slowest rate of increase in healthcare costs since the 1960s, and extending the life of the Medicare trust fund by at least 14 years.
  • There are now fewer American soldiers, sailors and airmen in war zones than at any time in the last 12 years.
  • Obama has turned back and deported more illegal immigrants than any other American president by a long chalk (nearly 33,000 a month).
In fact, most economists seem to think that if Mr. Trump just holds off on implementing ANY of his proposed policies, the US economy could rumble along quite nicely in what is already one of the longest period of recovery on record, all thanks to the economic policies introduced by Barack Obama. However, there seems to be little likelihood of that. If he starts to introduce his protectionist policies and other changes he has promised, a new recession seems more than likely to occur, either sooner or later.
So, all in all, not too shabby, Barack. If Hillary Clinton had spent more time plugging these successes and refuting Trump's wild contrary claims, we might not be in the pickle we find ourselves in right now.

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