Repeatedly blaming his predecessor for all of the country's ills is getting to be awfully threadbare by now. He was elected to fix the economy. Yet two and a half years into his presidency, it shows new signs of slowing down, while the White House and the Democrats on Capitol Hill have run out of ideas (if they ever had any) about how to get the engine of growth running at full throttle.Obama said he's going to bring together the best minds he can to work on this problem, but with less than eight months before the 2012 presidential election begins , it's a little late to be going back to the drawing board.
All of the economic numbers clearly demonstrate that things are getting worse, not better, and he is losing the confidence of the American people, who do not think he knows what he's doing. Here's what's happening:-- Unemployment is rising. The national jobless rate is 9.1 percent, with unemployment in the double-digits in nearly a dozen states and between 9 percent and 10 percent in others. The American people no longer believe the government's claims. Nearly 60 percent say the economy is still in a recession, and two-thirds say the country is "off on the wrong track."
-- Jobless rates aren't going to reach normal levels anytime soon. At the present subpar rate of job creation, it will take nearly 60 months to replace all of the jobs lost during the recession.-- "To bring unemployment down to 6 percent over three years, the economy must add 380,000 jobs a month and grow at least 4 percent a year," says University of Maryland economist Peter Morici. The Obama economy created a negligible 54,000 jobs last month, and the economy slowed down to a feeble 1.8 percent in the first quarter of this year.
-- Business economists around the country have sharply lowered their estimates of economic growth rates. J.P. Morgan Chase dropped its forecast for all of 2011 to an anemic 2 percent.-- The Obama administration, meanwhile, has proposed no new initiatives to boost economic growth, capital investment and new job creation. It is kind of pathetic to hear the president admit in the third year of his presidency that he has no plan to address the nation's slowing economic growth and that he has to consult with his advisers about what to do next.
-- One thing the White House will not do is propose another big spending stimulus bill after the last one turned out to be such a miserable failure. The Office of Management and Budget issued a statement Tuesday dismissing yet another big spending "jobs bill" pushed by Senate Democrats as much too costly.-- If the White House is counting on the Federal Reserve to pull it out of this mess, Fed Chairman Ben Bernanke and other Fed board members all but said, "Forget about it."
Bernanke thinks the slowdown is transitory, saying this week in a speech at the International Monetary Conference in Atlanta, "In this context, monetary policy cannot be a panacea."In effect, writes Washington Post economics analyst Neil Irwin, Bernanke "argued that the things holding back the U.S. economy will not be fixed by the central bank printing even more money."
-- Meantime, the government's debt-ridden fiscal mess worsens each month. It was reported this week that the ballooning national debt is approaching the size of the nation's entire gross domestic product, the measurement of our entire $15 trillion economy.With the new Aug. 2 deadline fast approaching for raising the debt ceiling by about $2 trillion to keep the government solvent, Moody's Investors Service warned that it may downgrade America's AAA credit score. That could have a disastrous inflationary effect across the country, and drive up the government's cost of borrowing money.
-- Numerous other weaknesses plague our economy. Housing is in a depression. Consumers are taking on more debt. Retail sales are tepid. The White House has all but killed the hope of opening up new job-creating export trade markets anytime soon, giving union bosses veto power over their approval.Corporations are sitting on trillions in capital for fear of a second-dip recession. The economy's troubles call for a bold change in fiscal policy on the spending side -- we spend too much -- and on the tax side -- taxes are suffocating this economy and killing job creation.
Former Minnesota governor Tim Pawlenty delivered an uplifting speech at the University of Chicago Tuesday that declared "Markets work. Barack Obama's central planning doesn't." He laid out a plan to cut what he calls Washington's "out-of-control spending," and making the federal tax code simpler, fairer and flatter.He would cut the corporate tax from 35 to 15 percent, reduce individual tax rates, plus eliminate taxes on all capital gains, interest and dividends to boost savings, investment, jobs and economic expansion.
Let the debate begin.