On June 17, Vice President Joe Biden crashed the daily White House press briefing to kick off the Obama administration’s “Recovery Summer,” a six-week-long campaign to promote the belief that “the Recovery Act is working.” VP Biden claimed: “We knew that the hole dug by the recession that was created by the policies of the last administration resulted in a loss, a real loss of somewhere between $2 trillion and $3 trillion in the economy. We never thought that $787 billion was going to fill those holes — that hole.”
There are so many things wrong with this statement, but we’ll identify just three: 1) according to the Congressional Budget Office, the cost of Obama’s stimulus has soared past $787 billion and now stands at $862 billion; 2) data show that as bad as Biden makes the current recession out to be, more jobs were lost in the first seven quarters of the 2001 recession than were lost in the first seven quarters of this recession; 3) Biden’s personal economic adviser, Jared Bernstein, co-authored a January 9, 2009, report promising the American people that the Obama stimulus would never allow unemployment to rise above 8% and guaranteeing that the U.S. economy would support 138.6 million jobs by December 2010.
So by the White House’s own standard, what verdict does the actual real world data give the Obama stimulus? The Labor Department’s Bureau of Labor and Statistics released its monthly jobs report today showing the economy lost 125,000 jobs in June as 225,000 temporary Census jobs ended. Just 83,000 private sector jobs were created in June. All told the U.S. economy has now lost 2.3 million jobs since President Barack Obama signed his stimulus bill and his administration is now 7.4 million jobs short of what he promised the American economy would support by 2010. There is only one word that can adequately describe the gulf between the President’s economic promises and his economic performance: failure.
One might hope that the objective failure Keynsian economic policies would cause the President to stop and consider changing course toward a more free market friendly approach. No such luck. Instead, President Obama’s budget would raise taxes on the small businesses that earn 72% of all small business income, raise capital gains taxes to 20%, and raise taxes on dividends to 39.6%. And the House is threatening to allow the largest tax hikes in the history of America to take effect on January 1, 2011.
And then there is all of the economic damage President Obama is compounding by his inept response to the Gulf oil spill. Though a federal judge found that President Obama acted in an “arbitrary and capricious” manner when he banned all deepwater (over 500 feet) drilling, energy development still has not restarted. Worse, CNN reports that shallow water drillers say the Obama administration has not issued any permits since April 20, effectively creating a stealth ban on all offshore drilling. Heritage analyst David Kreutzer has crunched the numbers and found that a full Obama administration ban on all drilling offshore would be absolutely devastating to the U.S. economy. Between now and 2035, an offshore drilling ban would: 1) reduce GDP by $5.5 trillion; 2) reduce job growth by more than 1 million jobs by 2015 and more than 1.5 million jobs by 2030; and 3) increase the total expenditures for imported oil by nearly $737 billion.
Real private sector job creation will not begin until businesses are confident enough to take risks in pursuit of opportunity. Individuals and businesses across the nation see tremendous opportunities for starting new businesses, investing, hiring new workers and expanding into new markets. From Obamacare to financial regulation to energy policy, the Obama agenda is making it next to impossible for Americans to take advantage of these opportunities. For private sector job creation to accelerate, bring down the unemployment rate and the Obama jobs deficit, step one is for Washington’s job destruction machine to take a long vacation.
Quick Hits:
- National Incident Commander Thad Allen admitted yesterday that the Obama administration failed to meet its pledge to recover 90 percent of the flow coming out of the Deepwater Horizon wellbore by the end of June.
- The Obama administration Gulf oil spill commission has four environmental advocates — three members and the executive staff director — but no energy industry representation.
- The Democratic majority in the House added $23 billion in new domestic spending to the Senate-passed war funding bill Thursday night.
- A federal program designed to help impoverished families heat and cool their homes wasted more than $100 million paying the electric bills of thousands of applicants who were dead, in prison or living in million-dollar mansions.
- In celebration of America’s Founding, The Heritage Foundation will be releasing a series of products in the coming weeks including study guide companion to We Still Hold These Truths and a video series.
