Prior to the 2016 elections, and in response to a Facebook post by a friend who expressed fear about the future of the country, I wrote the following. I would love to hear your comments!
- For me, I see Al Qaida a much reduced strategic threat and ISIS’s dreams of a caliphate being crushed (which is why they are shifting to lone wolf attacks).
- Contrary to RNC claims, violent crime is down… a Congressional Research Service report stated in Oct 2015: “Overall, homicide and violent crime rates have been trending downward for more than two decades, and both rates are at historic lows.”
- I see unemployment at 4.9% and GDP growth (albeit small) in every quarter but one since the recession.
- The Federal debt is yuge, but Trump’s approach won’t solve that. The US saw 8 straight years with a consistent increase of either deficit reduction or surplus growth during the Clinton years, including 4 years of budget surplus. That trend was immediately reversed during the GWB presidency, capped off by a recession that tanked the deficit through a combination of reduced revenue and bi-partisan stimulus spending. And, that was no accident–the federal debt, normalized by GDP, has grown under every Republican president since Ford, and shrunk under both Democratic president not saddled by the worst recession since the Great Depression. During Obama’s two terms, the deficit spending has decreased or stayed nearly the same every year after the recession (although he was helped along by the Republican inspired sequestration).
- The 3 things that pop into my mind that worry me… First, climate change. If you think it’s an issue, it should be clear that Trump would be the poison, not the antidote. Second, sluggish economy, deficit spending, and wealth/income inequality. Again, based on my previous post, same comment about Trump. Third, Russian expansionism. We’ll see how the global oil surplus will affect that, but so far, it’s putting a tremendous strain on the Russian economy and their ability to continue on their recent path.
- So, call me an optimist…
Sorry for the slow response, Carol. I’m not an economist, but here’s my take on a response to your question. The uptick on the above graph during the first year of Obama’s administration is partly due to an increase in spending, but is due in a larger part to the precipitous drop in GDP caused by the 2008 recession, both of which work against the metric.
I went to the OMB site and downloaded data on the US outlays over the past couple of decades, and here’s what has happened. During the Clinton years, the increase in outlays was gradual, and offset by the increase in GDP and revenue. There was a sharp increase during the George W Bush years, fueled partly by the increase in defense spending. Not sure if that is due to the wars, since I don’t know how that expense was booked. Since Bush, Obama has stabilized spending, but spending growth is unlikely to reverse in the near term because of the built-in increase in spending due to social security, medicare, and debt servicing.
In my layman’s eyes, the goal would be to increase the economic output, analogous to increase your personal income would allow for a larger mortgage. To me, that means driving strength into the middle class. If we have an economist out there, we’d love to hear your thoughts…
Yes, climate change and income inequality are right at the top of my worry list although environmental degradation I include there as well. It does bother me to see the sharp increase in the debt as a % of the GDP at the end of this graph. Do you have anything that reveals more of the debt under the Obama presidency?