By Gregory Hirshman
President Obama came to office promising to transcend politics and to fix our economy. Unfortunately, thus far he has failed at both. At inauguration, he enjoyed an approval rating of almost 70%. The vast majority of Americans believed that he was a new type of politician who could bring our country together and solve its economic problems. He maintained strong public support during the first few months of his administration, but his popularity has diminished as many Americans have begun to recognize that his policies have led to ballooning deficits and increased government intervention in the economy. He still enjoys the adulation of the media, but his approval rating in September has hovered around 50%. Former president George W. Bush was just as popular during the days leading up to the September 11th attacks despite having won a contested election and being scorned by the mainstream media. Until Obama pays more than lip service to fiscal discipline, he is likely to alienate more voters, and the United States may face continued high unemployment and economic stagnation. Only concerted action by taxpayers is likely prevent our country from becoming a highly indebted, full-fledged welfare state.
Bush’s $459 billion budget deficit in 2008 deserved the condemnation of fiscal conservatives. It represented only 3.2% of GDP, not an extraordinarily high figure by modern standards, but it was then the largest in American history in absolute terms. Nevertheless, under Obama, the deficit for 2009 is projected to be four times as large, or $1.85 trillion. At 13.1% of GDP, this will dwarf the post-World War II record of 6%. According to the non-partisan Congressional Budget Office (CBO), the deficit will remain over $1 trillion through 2019 if Obama’s agenda is adopted. The US debt-to-GDP ratio would double from 41% to 82%. One in every 6 of federal dollars would go to paying interest on the national debt versus 1 in 12 dollars in 2008. It will be necessary to cut spending drastically, which is politically nearly impossible, or to raise taxes, which stifles economic growth. Pushing the deficit to these astronomical levels, Obama will put our nation’s continued economic prosperity in jeopardy. At the current rate of spending, the Government Accountability Office estimates that by 2040, almost one third of national revenue would go toward interest payments while the rest would be tied up by entitlements. Nothing would be left for defense, education, veterans’ pensions, or infrastructure.
How did Obama quadruple the US deficit? The man who aspired to “transcend politics” rammed pork-barrel laden legislation through Congress. With large majorities in both Houses, he did not need to engage in meaningful negotiations or adopt significant Republican proposals. His unprecedented and unfunded $787 stimulus package passed without the support of a single Republican congressman and with the support of only 2 current Republican senators. His $3.53 trillion budget for 2010 received no Republican votes in either the House or the Senate. In the House his cap and trade bill, which the CBO estimates will cost average the American family hundreds, if not thousands, of dollars per year in inflated energy costs, won only 8 Republican votes. This bill seems doomed in the Senate since few, if any, Republicans support it, and many moderate Democrats oppose it. In contrast, the allegedly hyper-polarizing George W. Bush received 40 congressional Democratic votes for his tax cuts in 2001 and 111 congressional Democratic votes for the war in Iraq. Obama does not appear to want to work with Republicans to pass legislation likely to be more moderate. Our children and grandchildren may have to pay for his partisan political victories.
Should we be surprised by Obama’s striking lack of bipartisanship? Not at all. In 2007 the National Journal ranked Obama the country’s most liberal senator, reporting that he voted the “liberal way” on 65 of 66 occasions. The Chicago political machine, operated almost exclusively by the Democratic Party, apparently taught Obama that the shrewdest and most assertive politician is most likely to succeed. While he campaigned as a centrist and uses centrist rhetoric, his voting record and current agenda demonstrate that his politics are extreme.
If Obama’s policies were succeeding, he would nevertheless enjoy high popular approval. Ronald Reagan governed as a staunch conservative. In 1981, he fired 12,000 air traffic controllers to end a strike, and in 1983, he began a missile defense system which liberals argued was nonsensical, if not dangerous. His actions proved popular, however, and he won reelection with 59% of the popular vote and carried 49 states.
Obama’s program of government intrusion, in contrast, has fared poorly in the court of public opinion. According to Gallup, in early August only 41% of Americans thought that his stimulus package had improved the US economy, while 57% believed it had made no difference or had worsened the recession. Only 18% said that his massive spending plan had improved their own economic situation, while 68% said that their lot had not improved. Only 29% of Americans believed that the increased government spending would be helpful in the long run, while 34% expected it to be harmful. When the stimulus bill passed, Obama had predicted that that the unemployment rate would peak around 8%. It is now well over 9% and rising.
When large tax increases or spending cuts become necessary to control the national debt, Americans are like to become even less enthusiastic about Obama’s economic program. Significant public resistance to Obama’s plan to increase government involvement in the health care system suggests that many Americans are beginning to oppose further government intrusion into their lives. As people learn about the specifics of Obama’s economic agenda, they are turning against it despite his skillful rhetoric.
Obama’s public speaking skills and cool demeanor attracted a large following, but now Americans are judging him on his policies. The current recession, like all previous ones, will eventually end no matter what the government does. Like many other countries, the US is now seeing possible signs of recovery. Most of those other countries, however, did not pursue the reckless spending policies which Obama adopted. Among developed economies, the United States ranks among the slowest in recovering. France, Germany, and Japan all experienced growth in GDP in the second quarter of 2009. The 16 “Euro-bloc” countries saw an aggregate annualized decline of GDP of only 0.1% in the second quarter while the United States saw an annualized drop of 1% despite the fact that Obama’s stimulus package was considerably greater as a percentage of GDP (about 2.5%) than the G-20 average of 1.5%. Many countries resisted US pressure to spend more, and yet they appear to be recovering faster than the US.
Obama’s chief of staff Rahm Emanuel once said, “You never want a serious crisis to go to waste. … The crisis provides the opportunity for us to do things that you could not do before.” Acting on this maxim of political expediency, Obama exploited the recession to promote government spending and federal intrusion into the marketplace. His policies have failed to produce meaningful results, and their long-term risks are obvious. Americans initially gave their history-making, odds-defying president the opportunity to lead. Unfortunately, he has chosen to implement liberal policies rather than govern from the center. Now, he is beginning to alienate many voters despite his eloquence. The hope for real change from the tired old liberal programs of more government intervention seems to be receding. As the rhetoric fades, reality inevitably intrudes.