Today we learned that the U.S. economy grew at an annualized rate of 2.2 percent in the first quarter of this year. This rate is far below what our economy needs to recover from the Obama Stagnation.
Coming out of recessions, the U.S. economy typically grows briskly. After the recession of the early 1980s, the economy grew at annualized rates of 5.1 percent to 9.3 percent from the first quarter of 1983 through the second quarter of 1984. Yet the highest annualized growth we have seen for a quarter in this “recovery” is 3.9 percent. That was two years ago. For all of last year, the economy grew by only 1.7 percent.
Last month, President Obama said things would get better soon. “Day by day,” he promised, “we’re restoring this economy from crisis.” We’ve heard this before.
In February 2009 the president said his stimulus bill was “the beginning of the first steps to set our economy on a firmer foundation, paving the way to long-term growth and prosperity.”
In April 2010, it was: “Our economy is stronger; that economic heartbeat is growing stronger.”
In January 2011, he claimed, “The next two years, our job now, is putting our economy into overdrive.”
It’s a shame our economy does not run on rhetoric.
The things that do matter in the economy have not lived up to the president’s promises. The most recent economic data shows business spending is slowing. Jobless claims remain high, unemployment may stay above 8 percent through 2014, and discouraged people without jobs are dropping out of the labor force. Consumer confidence is down, home sales have fallen, and durable goods orders recently fell by the largest amount in three years.
President Obama’s policies have produced a stagnant economy. Instead of allowing the private sector to allocate resources and create jobs, the president wants Washington to spend, regulate, and alter incentives in much of the economy. These policies hamper private investment and growth. Even after three years of evidence that his policies have made things worse, the president continues to propose further intervention and regulation of the economy.
As the economist Friedrich Hayek said, “The more the state ‘plans,’ the more difficult planning becomes for the individual.”
Washington should make it easier for people and businesses to plan and invest, not block them with excessive government interventions. President Obama likes to say that he did not cause the recession, and that is true. But his interference in the private economy over the past three years has caused the Obama Stagnation.
— John Barrasso is a U.S. senator from Wyoming.