The Economy Has a Pulse, but Only Barely
GDP growth has slowed to a crawl, all thanks to Obama's policies.
The numbers are in for the economy’s performance in the first quarter, and they’re not pretty. The GDP grew by a barely perceptible 0.1%, far below estimates predicted last year. And then there are April’s underwhelming jobs numbers. Economists in 2013 claimed that 2014 would be a banner year for the U.S. economy, with some even claiming it would be the best year since the so-called recovery began in 2009. No such luck.
The White House, which over the last five years has been quick to deflect bad economic news with whatever disastrous headline worked to their advantage, this year chose Old Man Winter as the culprit. Administration economist Jason Furman said, “The first quarter of 2014 was marked by unusually severe winter weather.” But what about global warming? Never mind that. Mother Nature is clearly a bigot, and this was without a doubt the most racist winter in history.
Barack Obama came into office on the idea that he would turn America’s economy around, but he also mixed that with a promise of “fundamentally transforming the United States of America.” We can see which of these competing promises won out. From the start of his presidency, and the $800 billion stimulus washout, virtually every decision made by the administration and by Capitol Hill has stamped out the embers of real recovery. Excessive regulations and ObamaCare have conspired to keep the country from experiencing the type of strong post-recession growth we have historically enjoyed.
The Obama “recovery,” now 19 quarters long, is the most anemic recovery in modern history. Real GDP growth over those 57 months is 11.1%, averaging 2.2% per quarter. By comparison, the average gain over the previous 10 U.S. recoveries is about 21%, with a per-quarter gain of 4.1%.
The bitter irony here is that if it weren’t for the skyrocketing costs of health care under ObamaCare, the economy might have actually contracted last quarter. At least that’s the silver lining some leftists are pointing to, as they argue that because people are paying more for health care due to the draconian regulations coming to life under ObamaCare, the economy will benefit.
One of the original reasons for foisting ObamaCare on the American people was that it would lower health care costs. Even before the final passage of the bill, it was glaringly obvious that the law would raise costs, reduce quality of care and fail to live up to its promises. As of last quarter, there has been a 9.9% annualized jump in the cost of health care. The last quarter of 2013 saw a 5.6% rise. The excuse from the White House is that this is due to the high number of recent signups, and that costs will level out over time. Kind of like how the economy was supposed to pick up speed in 2014?
This week’s bad economic news was compounded by another unsettling fact. According to the World Bank, China will surpass the U.S. as the world’s largest economy this year. To be fair, there are a lot of qualifications attached to this bit of trivia. It’s based on purchasing price parity (PPP), not aggregate wealth or total share of global GDP, or quality of the products produced, three categories in which the U.S. still clearly dominates. But for how long? China wasn’t expected to pass the PPP benchmark for another five to seven years. It seems that accurate economic predictions these days, particularly when statists are in charge, don’t hold much weight.