President Obama’s Economic Recovery is worse than Ronald Reagan’s and George W. Bush’s Combined

Posted by PITHOCRATES - December 8th, 2012

Week in Review

President Obama has said time and again that we can’t go back to the failed policies of the past.  Referring to Ronald Reagan and George W. Bush and their tax cutting ways that stimulated real job creation.  Not the Obama administration Keynesian stimulus spending which has the absolute worst record of job creation in post-war America (see THE SCARIEST JOBS CHART EVER by Joe Weisenthal posted 12/7/2012 on Business Insider).

Despite the strong jobs report, the employment situation in America remains depressing.

Once again, we go back to Calculated Risk, which compares the trajectory of this recovery (red line) with all other post-WWII recoveries.

As you can see, the pace of the downturn was far more severe than anything in previous recessions, and the long march back to pre-recession levels remains incredibly slow.

The chart tells a dismal story.  Ronald Reagan chose tax cuts to pull us out of the 1981 recession.  That recession saw a peak job loss of just over 3%.  And a duration of just over 27 months to recover ALL the jobs that we lost in that recession.

George W. Bush chose tax cuts to pull us out of the 2001 recession following the bursting of Bill Clinton’s dot-com bubble.  That recession saw a peak job loss of just over 2%.  And a duration of about 46 months to recover ALL the jobs lost in that recession.

Bill Clinton’s Policy Statement on Discrimination in Lending basically created subprime lending.  As the Clinton administration pressured lenders to find a way to qualify the unqualified for mortgages.  And the real estate market boomed in the 2000s.  But much like the economic boom in the 1990s it was just a bubble.  That inflated to dangerous heights thanks to Fannie Mae and Freddie Mac buying those toxic subprime mortgages from lenders so they could approve more of them.  Unloading those toxic mortgages on unsuspecting investors.  Sending this toxic contagion throughout the world.  The resulting 2007 recession saw a peak job loss of about 6.5%.  And a duration of about 58 months AND counting to recover all those  jobs lost in the current recession.  We still have another 3% to go.

This postwar recession is the worst by whatever metric you measure it by.  But the singular aspect of it that makes this recession much longer and deeper in job losses is the Obama administration’s choice of using Keynesian stimulus to try to end it.  Instead of tax cuts.  Which is why the Obama recovery is far worse and more long-lasting in misery than both the Reagan and Bush recoveries added together.  Proving the current economic disaster is an Obama disaster.  For his insistence on using the failed policies of Keynesian stimulus spending instead of the time proven policies of tax cuts.

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