An ad from pro-Romney super PAC Restore Our Future complains about high federal debt and the slow economic recovery, asking if America is going “forward” or “backward.” Restore Our Future fails to note, however, that 4.6 million new jobs have been created over 30 consecutive months of private-sector growth, or that GOP-favored public-sector downsizing is dragging down the recovery. In addition, it’s Bush-era policies plus the global recession that set the U.S. on a path towards an explosion of the federal debt.
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 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:
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.
President Obama’s Recovery Dragged Down By Government Layoffs
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 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]
Bush Policies And Recession Caused Debt To Skyrocket
Prior To President Obama’s Inauguration, President Bush Had Already Created A Projected $1.2 Trillion Deficit For Fiscal Year 2009. From the Washington Times: “The Congressional Budget Office announced a projected fiscal 2009 deficit of $1.2 trillion even if Congress doesn’t enact any new programs. […] About the only person who was silent on the deficit projection was Mr. Bush, who took office facing a surplus but who saw spending balloon and the country notch the highest deficits on record.” [Washington Times, 1/8/09]
NYT: President Bush’s Policy Changes Created Much More Debt Than President Obama’s. The New York Times published the following chart comparing the fiscal impact of policies enacted under the Bush and Obama administrations:
[New York Times, 7/24/11]
Recession Added Hundreds Of Billions In Deficits By Increasing Spending On Safety Net While Shrinking Tax Revenue. The Center on Budget and Policy Priorities (CBPP) explains: “When unemployment rises and incomes stagnate in a recession, the federal budget responds automatically: tax collections shrink, and spending goes up for programs like unemployment insurance, Social Security, and Food Stamps.” According to CBPP: “The recession battered the budget, driving down tax revenues and swelling outlays for unemployment insurance, food stamps, and other safety-net programs. Using CBO’s August 2008 projections as a benchmark, we calculate that the changed economic outlook alone accounts for over $400 billion of the deficit each year in 2009 through 2011 and slightly smaller amounts in subsequent years. Those effects persist; even in 2018, the deterioration in the economy since the summer of 2008 will account for over $300 billion in added deficits, much of it in the form of additional debt-service costs.” [CBPP.org, 11/18/10; CBPP.org, 5/10/11, citations removed]
Over The Coming Decade, The Bush Tax Cuts Are The Primary Cause Of Federal Budget Deficits. The Center on Budget and Policy Priorities prepared a chart showing the deficit impact of the Bush tax cuts (orange), the Iraq and Afghanistan wars, the recession itself, and spending to rescue the economy:
CBPP: Bush Tax Cuts And Wars Are Driving The Debt. According to the Center on Budget and Policy Priorities:
The complementary chart, below, shows that the Bush-era tax cuts and the Iraq and Afghanistan wars — including their associated interest costs — account for almost half of the projected public debt in 2019 (measured as a share of the economy) if we continue current policies.
[Center on Budget and Policy Priorities, 5/20/11]
[NARRATOR:] If your daughter was one year old when President Obama was inaugurated, she just started kindergarten. Is her future getting better? Under Obama, America is experiencing the worst economic recovery since the Great Depression. Counting people who have dropped out or stopped looking for work, the real unemployment rate is 19 percent. Obama has added more debt than the first 41 presidents combined. Is America going forward? Or backward? Restore Our Future is responsible for the content of this message. [Restore Our Future via YouTube.com, 9/26/12]