Comparing this recovery from the bottom in June 2009 with previous rebounds continues to be very unflattering to Mr. Obama. Republicans on the Joint Economic Committee report that the typical growth rate at this stage of the previous nine recoveries (13 quarters) averaged 16.8%, and 19.6% in the Reagan expansion. The figure for this recovery is a meager 7.2%. That’s about $1.2 trillion in foregone output. The budget deficit would be half as large today if this were a normal expansion.
The question is whether there is a reason to expect better in 2013. It’s hard to see the investment outlook brightening when Democrats want to raise taxes on investment (capital gains and dividends). Higher tax rates (to 41% from 35%) on small businesses and subchapter S firms won’t help hiring. The National Association of Manufacturers says its members will shed factory jobs next year if Washington jumps off the tax cliff, and until recent months manufacturing has been one of the economy’s few bright spots.
So it’s bad now – and will get a whole lot worse if Obama wins. What a rousing reelection slogan: Give Me Four More Years to Ruin it Completely!
There are, of course, other signs that things are not going well under Obama. Food prices are going up virtually every day. Gasoline is down a bit right now, but is still nearly twice what it was when Obama took office. Energy prices are set to ‘necessarily skyrocket’ if Obama’s EPA succeeds in killing 200 coal plants. Defense workers are going to be laid off by the thousands – and we’ll be forced to pay the legal costs of Obama’s illegal order to contractors to ignore the WARN Act.
We have a chance to turn this around. But there are only a few days left to help make that happen.