Former President Barack Obama commemorated the 11th anniversary of the American Recovery and Reinvestment Act this week. He credited the $800 billion stimulus package for initiating more than a decade of job growth and economic expansion. At the time Obama entered office the economy was in the midst of the greatest recession since the Great Depression. Obama spent much of his first term blaming his dire economic situation on his predecessor, George W. Bush. While he did inherit a bleak financial crisis, presidents are often victims of circumstances beyond their control. President Bush was a casualty of the 9/11 terrorist attack (and subsequent wars in Iraq & Afghanistan), the real estate lending crisis and the impending worldwide recession. The labor market was hemorrhaging jobs and the U.S. auto industry was near bankruptcy. Much to his credit Obama and a Democratic Congress passed the Economic Stimulus Act and the Troubled Asset Relief Program that resulted in the Home Affordable Refinance Program. This program allowed homeowners to refinance mortgage balances greater than the devalued worth of the home. This prevented the housing crisis from being even worse than it was. The government bailout of General Motors and Chrysler saved auto worker jobs and pensions. By the end of Obama’s second term the economy was expanding and the stock market was recovering. The Obama recovery came at a high cost to the national debt. All that government spending stimulated jobs but doubled the national debt. Economies are cyclical and recessions inevitably are followed by recoveries. Obama critics argue that the recovery under his leadership was much slower than a typical recovery and was aided by a lenient Federal Reserve that held Prime lending rates at or near 0% for his entire 8 years in office. Obama also imposed excessive regulations on banks and small businesses that prevented a more robust recovery. Perhaps oversight of the banking industry was needed considering the role unregulated lending practices played in the housing crisis.
Enter Donald Trump who approached the economy from a businessman’s perspective. He eliminated many regulations (particularly on small businesses) and pushed Congress to pass tax relief for the majority of Americans. The Tax Relief Act also lowered corporate taxes, which combined with lower individual taxes ignited the economy. Under President Trump we have had record numbers of jobs created and the lowest unemployment numbers in over 50 years. The job growth has been particularly beneficial to minorities and women and with the job growth has come an increase in wages as well. Consumer confidence and spending has driven the economy to new heights. The GDP has grown at an annual rate of 2-3% without a rise in the rate of inflation (no small feat in itself). Tax cuts (both personal and corporate) and increased defense spending has increased the national debt at a rate that will likely match that of Obama. Lowering the national debt requires cooperation between the two major parties to eliminate waste and pork barrel spending. I don’t see that happening any time soon. Unless and until politicians stop looking out for their own self-interests and begin looking out for the best interests of the nation, this will only get worse. The way I see it, both presidents can take some credit for solving issues that each faced after taking office. There is no “I” in team and we can accomplish much more as a team than a bunch of individuals.