GPS Takes Obama’s Quote Out Of Context

Obama Was Talking About Prioritizing Family Spending, Not Telling People Not To Go To Vegas. From remarks President Obama made in New Hampshire: “Responsible families don’t do their budgets the way the federal government does. Right? When times are tough, you tighten your belts. You don’t go buying a boat when you can barely pay your mortgage. You don’t blow a bunch of cash on Vegas when you’re trying to save for college. You prioritize. You make tough choices. It’s time your government did the same.” [President Obama Remarks via WhiteHouse.gov, 2/2/10, emphasis added]

“Failed” Recovery Act Created Millions Of Jobs, Boosted GDP, And Cut Taxes

Recovery Act “Succeeded In…Protecting The Economy During The Worst Of The Recession.” From the Center on Budget and Policy Priorities: “A new Congressional Budget Office (CBO) report estimates that the American Recovery and Reinvestment Act (ARRA) increased the number of people employed by between 200,000 and 1.5 million jobs in March. In other words, between 200,000 and 1.5 million people employed in March owed their jobs to the Recovery Act. […] ARRA succeeded in its primary goal of protecting the economy during the worst of the recession. The CBO report finds that ARRA’s impact on jobs peaked in the third quarter of 2010, when up to 3.6 million people owed their jobs to the Recovery Act. Since then, the Act’s job impact has gradually declined as the economy recovers and certain provisions expire.” [CBPP.org, 5/29/12]

At Its Peak, Recovery Act Was Responsible For Up To 3.6 Million Jobs. According to the nonpartisan Congressional Budget Office:

CBO estimates that ARRAs [sic] policies had the following effects in the third quarter of calendar year 2010:

• They raised real (inflation-adjusted) gross domestic product by between 1.4 percent and 4.1 percent,
• Lowered the unemployment rate by between 0.8 percentage points and 2.0 percentage points,
• Increased the number of people employed by between 1.4 million and 3.6 million, and
• Increased the number of full-time-equivalent (FTE) jobs by 2.0 million to 5.2 million compared with what would have occurred otherwise. (Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers). [CBO.gov, 11/24/10]

Recovery Act Included $288 Billion In Tax Cuts. From PolitiFact: “Nearly a third of the cost of the stimulus, $288 billion, comes via tax breaks to individuals and businesses. The tax cuts include a refundable credit of up to $400 per individual and $800 for married couples; a temporary increase of the earned income tax credit for disadvantaged families; and an extension of a program that allows businesses to recover the costs of capital expenditures faster than usual. The tax cuts aren’t so much spending as money the government won’t get — so it can stay in the economy.” [PolitiFact.com, 2/17/10]

Massive Monthly Job Losses Obama Inherited Have Turned Into Steady Private-Sector Growth

Recession Officially Ran From December 2007 To June 2009, Making It The Longest Since World War II. From the National Bureau of Economic Research: “The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday by conference call. At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marks the end of the recession that began in December 2007 and the beginning of an expansion. The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months. In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month.” [NBER.org, 9/20/10]

• Recession Resulted In 8.3 Million Job Losses. According to the Associated Press, “the Great Recession killed 8.3 million jobs, compared with 1.6 million lost in the 2001 recession.” [Associated Press via Yahoo! News, 5/4/12]

Bush Recession Was So Severe That Economy Was Still Shedding Over Three-Quarters Of A Million Jobs Per Month Through First Few Months Of President Obama’s Term. According to the Bureau of Labor Statistics, the economy shed 839,000 jobs in January 2009, 725,000 in February 2009, 787,000 in March 2009, and 802,000 in April 2009, for a four-month average of 788,250 lost jobs per month. [BLS.gov, accessed 5/3/12]

Since The Recession Ended In June 2009, The Private Sector Has Added Over 3.4 Million Jobs While Public-Sector Employment Has Fallen By 670,000. According to the Bureau of Labor Statistics, there were 107,933,000 private-sector jobs in June 2009, and 111,400,000 private-sector jobs in August 2012, an increase of 3,467,000 jobs. The BLS also reports that there were 22,570,000 Americans working in the public sector in June 2009, and 21,900,000 working in the public sector in August 2012, a decrease of 670,000 jobs. The private-sector gains and public-sector losses add up to a total increase of 2,797,000 jobs.

The following chart shows the cumulative private-sector job gains and public-sector job losses since the recession officially ended in June 2009:

[BLS.gov, accessed 9/7/12; BLS.gov, accessed 9/7/12; NBER.org, 9/20/10]

The Private Sector Has Added 4.6 Million Jobs Over 30 Consecutive Months Of Private-Sector Growth. The following chart shows the monthly change in private-sector jobs dating back to January 2008.

[BLS.gov, accessed 9/7/12; MSNBC.com, 9/7/12]

President Obama’s Recovery Dragged Down By Government Layoffs, While Past Recoveries Were Bolstered By Public-Sector Growth

Previous Recoveries Were Bolstered By Public-Sector Growth. The following chart, based on BLS data, shows the cumulative change in public-sector employment in the first two years of the Obama recovery and the three most recent previous recoveries:

[BLS.gov, accessed 4/10/12]

• Conservative AEI: The Public Sector Is Shrinking, But Private-Sector Growth Is Above Average. From American Enterprise Institute scholar Mark J. Perry: “In the second quarter of 2012, ‘public sector GDP’ decreased -1.44%, and that was the eighth straight quarter of negative growth for total government spending, averaging -2.88% per quarter over the last two years. In contrast, there have been 12 consecutive quarters of positive growth for private sector GDP averaging 3.07% per quarter in the three years since the recession ended, which is slightly higher than the 2.8% average growth rate in private real GDP over the last 25 years.” [AEI-Ideas.org, 7/31/12]
• GOP-Favored “Government Downsizing” Has Been “A Drag” On Job Growth. From the Associated Press: “Conservative Republicans have long clamored for government downsizing. They’re starting to get it — by default. Crippled by plunging tax revenues, state and local governments have shed over a half million jobs since the recession began in December 2007. And, after adding jobs early in the downturn, the federal government is now cutting them as well. States cut 49,000 jobs over the past year and localities 210,000, according to an analysis of Labor Department statistics. There are 30,000 fewer federal workers now than a year ago — including 5,300 Postal Service jobs canceled last month. By contrast, private-sector jobs have increased by 1.6 million over the past 12 months. But the state, local and federal job losses have become a drag on efforts to nudge the nation’s unemployment rate down from its painfully high 9.1 percent.” [Associated Press, 10/25/11]

The Housing Bubble Burst Before Obama’s Presidency

Housing Bubble Burst Prior To Obama’s 2009 Inauguration. From Reuters: “The homeownership rate, which was measured at 66.0 percent in the fourth quarter of 2011, peaked at 69.4 percent in 2004 at the height of a housing market boom fueled by cheap credit. The collapse of the U.S. housing market bubble triggered the 2007-09 recession. With house values tanking, many – especially the younger generation – are rethinking the so-called American dream of owning a home. House prices have dropped about 32 percent from their peak at the end of 2005, leaving millions of Americans with properties worth far less than their mortgages and forcing many others into renting.” [Reuters, 4/30/12]

When Obama Was Sworn In, Home Prices “Were In Free Fall,” But Have Since Stabilized. From Jed Kolko, chief economist for real estate website Trulia: “The huge decline in home prices started long before Obama took office. When Obama took office, prices were in free fall, and now they have stabilized. From April 2006 to January 2009, sales prices fell 29% nationally (Case-Shiller, Composite 20, seasonally adjusted). After Obama took office, prices continued to fall another 7.5% to January 2012. Then, prices turned around, rising 3.6% from January 2012 to June 2012 (the latest Case-Shiller figure). Looking forward, the Trulia Price Monitor shows that sales prices should rise another 2.1% from June to October because asking prices rose by that amount from April to August and tend to lead sales prices by two months. All told, home sales prices on Election Day should be just 2.2% below where they were in January 2009. And, of course, the trend has totally turned around: the year-over-year change in prices was -19% in January 2009 (Case-Shiller) and was +2.3% in August 2012 (Trulia Price Monitor).” [Business Insider, 9/12/12]

• The Administration Had Little Ability To Influence Housing Market, But The Recovery Act Helped. From Business Insider: “Obama’s main contributions to the housing recovery were the 2009 stimulus, which prevented a worse recession which ultimately boosted housing demand, and the ongoing push to make refinancing more widely available, which has given the economy further modest stimulus. But there’s little that the Administration did – or could have done – to influence the path of home prices and construction and their human costs.” [Business Insider, 9/12/12]