The 2008 financial crisis, rightly or wrongly, was blamed on the GOP and led to a sweeping victory for President Barack Obama who promised to take immediate steps to shore up the economy and help the middle class.
If talk is generally cheap, Obama’s economic rhetoric is taken from the clearance shelf at the Dollar Store.
I could run out of space on the interwebs writing about Obama’s economic failures. So for the sake of brevity, I am going to focus on Obama’s promises at the Democratic National Convention in 2008 and his job promises post-election.
Our government should work for us, not against us. It should help us, not hurt us. It should ensure opportunity not just for those with the most money and influence, but for every American who’s willing to work.
Willing to work? Interesting choice of words for Candidate Obama who (months before the 2012 election) directed his administration to eliminate “workfare” requirements for those seeking government handouts, such as SNAP and welfare, which was enacted by President Clinton in 1996. Moreover, Obama’s presidency has left Americans wanting for jobs — and his policies have stunted job growth and prolonged the Great Recession. More on this in a bit.
Change means a tax code that doesn’t reward the lobbyists who wrote it, but the American workers and small businesses who deserve it.
I chuckled after hearing this in 2008 and I maniacally laughed after reading it today. The hallmark legislation of Obama’s presidency, Obamacare, is a massive tax on workers and small business — the largest tax increase in the history of America. That’s not a typo. Reason does a good job arguing that Obamacare is the largest tax increase and the numbers don’t lie. Pocket Full of Liberty colleague Amy Otto has also written all about how much Obamacare sucks.
Individuals and families will now be required to purchase health insurance plans that meet certain government-set standards or pay a tax for failing to do so. Health insurance costs have skyrocketed nationwide since 2010 and continue to do so. In California, costs have risen from nearly 50% on the low end to nearly 150% on the high end.
Besides skyrocketing health insurance costs and the individual mandate, Obamacare has increased taxes on capital gains, payroll taxes, health insurers, flexible spending accounts, and more. Small businesses are hiring part-time help only or laying people off to avoid the Employer Mandate that they provide health insurance to their employees. While the Obama Administration has delayed the implementation of the Employer Mandate, then damage has been done and continues to be done to small business.
And don’t even get me started on the big companies who received Obamacare waivers – while small businesses suffered.
I will eliminate capital gains taxes for the small businesses and the start-ups that will create the high-wage, high-tech jobs of tomorrow.
Eliminate capital gains taxes for small businesses? Surely you jest! Obamacare assessed a capital gains surtax of 3.8% on top of the increased capital gains tax, which Obama raised from 15 to 20% in January 2013. Since small businesses often file as individuals, any small businesses with adjusted gross income of $200,000 or more ($250,000 if a married couple is filing the return) would pay 23.8% instead of 15%, on capital gains.
Obama has also waged war on small businesses in a stealthy way — through regulation. Creating onerous regulations on an almost-daily basis cripples small business and insulates big business that has the resources to devote to adapting to the regulations. This creates barriers to entry for small businesses and establishes a de facto crony capitalism, much like the Obamacare waivers discussed above.
I will cut taxes — cut taxes — for 95% of all working families. Because in an economy like this, the last thing we should do is raise taxes on the middle-class.
Obama and the Democrats passed the Social Security tax holiday, which dropped the Social Security tax paid by wage-employees from 6.2% to 4.2%. Since many Americans earn wages, Obama did come through with this promise. The downside? Social Security is more and more underfunded. Also, Obama permitted the tax holiday to lapse on January 1, 2013, much to the surprise of the low-information voters who blindly pulled the lever for Obama in November 2012. How’s that tax hike working out for you?
And for the sake of our economy, our security, and the future of our planet, I will set a clear goal as President: in ten years, we will finally end our dependence on oil from the Middle East.
Some credit where it is due. Obama has not yet interfered with fracking in America, which is going to prove to be the vehicle for America getting close to energy independence — or at least becoming a net energy exporter. However, Obama has failed to speed up the permits which would allow companies to export natural gas to countries in Europe and Asia where the cost per unit is double what it is in America. Moreover, Obama has taken a stand against the Keystone XL pipeline that would assist in bringing energy to America and would likely create tens of thousands of jobs.
Most importantly, Obama has waged a war against the coal industry, despite the fact that millions of Americans rely on coal as a source of electricity and thousands (if not more) work in the coal industry.
The biggest of Obama’s economic failures, of course, is his failure to deliver on the promise of creating jobs.
Three weeks after the 2008 election, with obvious ignorance of free markets and economics, Obama continued his grandiose promises that he will create millions of jobs through the stroke of an autopen:
WASHINGTON — President-elect Barack Obama on Saturday outlined his plan to create 2.5 million jobs in coming years to rebuild roads and bridges and modernize schools while developing alternative energy sources and more efficient cars.
“These aren’t just steps to pull ourselves out of this immediate crisis; these are the long-term investments in our economic future that have been ignored for far too long,” Obama said in the weekly Democratic radio address. The economic recovery plan being developed by his staff aims to create 2.5 million jobs by January 2011, and he wants to get it through Congress quickly and sign it soon after taking office.
He called the plan “big enough to meet the challenges we face” and said that it will jump-start job creation but also “lay the foundation for a strong and growing economy.”
Aides said the economic plan outlined Saturday went further that the president-elect has gone before.
The American Recovery and Reinvestment Act (the “stimulus”) was passed in early 2009. It was sold as a plan to create jobs, invest in infrastructure, and shore up the economy during the depths of the Great Recession. $800 billion dollars were to be spent to achieve Obama’s plan to create 2.5 million jobs. The verdict? The stimulus was a massive failure.
Mark Hemingway, quoting Jim Pethokoukis, wrote in 2011 that the jobs created by the stimulus essentially cost well over a quarter of a million dollars per job. Government efficiency at its finest! The Congressional Budget Office has come out with a revised analysis of this figure, noting that the stimulus “saved or created” between 0.2 and 1.5 million jobs – or that employment would be that much less had the stimulus not have been passed.
First of all, that’s an absurd range. 200,000 to 1,500,000? Why can’t the CBO be more precise? Because they are speculating.
Second, Jim Pethokoukis noted that based on that range, each stimulus job “saved or created” cost at least $500,000 or as much as $4.1 million.
Immediately prior to the 2012 election, CNN posted a fact check which concluded that a net total of 125,000 jobs were created under Obama since he took office in 2009. This takes into account the jobs which were created minus the jobs lost during his administration.
Indeed, Obama’s administration projected that unemployment would be below 6% in 2013 – without the stimulus – and in the mid-5% range with the stimulus.
Let me be clear about one thing. Governments do not create jobs, except government jobs at the expense of private sector jobs. Governments can merely create the conditions to promote job growth or to stunt such growth.
The taxes and regulations promulgated by the Obama administration have stunted the economic recovery to the point of a crawl. America will not fully recover from Obama’s economy until government gets out of the way and permits the market to work the way it should — without government interference.
As always, free markets are better markets.