The White House deserves some credit for revising downward their short-term economic growth estimates. The problem is that they once again predict a miniboom (boomlet?) generated by, you guessed it, President Barack Obama's policy in a second term. While economic predictions are almost as numerous as economists, the president has proven to be seriously mistaken on matters ranging from the stimulus to Solyndra. Obama has repeatedly promised the American people that his policies and economic agenda would make things better, but they haven't. Remember what Obama had already promised would result from his initial stimulus during an address in 2009?
I asked my nominee for Chair of the Council of Economic Advisers, Dr. Christina Romer, and the Vice President-Elect's Chief Economic Adviser, Dr. Jared Bernstein, to conduct a rigorous analysis of this plan and come up with projections of how many jobs it will create—and what kind of jobs they will be. Today, I am releasing a report of their findings so that the American people can see exactly what this plan will mean for their families, their communities, and our economy. . . .
The jobs we create will be in businesses large and small across a wide range of industries. And they'll be the kind of jobs that don't just put people to work in the short term, but position our economy to lead the world in the long-term.
The president's stimulus plan was sold as a magic elixir that would lower the unemployment rate to 5.6 percent. Instead, Americans know it has remained stubbornly above 8 percent for over 40 straight months. They have seen their net worth decline some 40 percent as deficits reached record levels and debt as a percent of GDP grew alarmingly.
And, while much has been made of the fiscal "cliff" we are facing, former Office of Management and Budget General Counsel Jeff Rosen correctly points to the job-killing "regulatory cliff" the Obama administration has helped midwife. There have been 106 "major rules," defined as rules that have at least $100 million in costs during Obama's first three years, compared to 28 over the same time frame during the Bush administration—a staggering 279 percent increase. According to the American Action Forum, new rules promulgated this year will layer an additional $56.6 billion in compliance costs and more than 114 million hours of paperwork burden. Then there is always the president's stated desire to raise taxes on millions of Americans who own small businesses and file taxes as individuals—you know, those same entrepreneurs who took all the risk to create jobs and paid themselves last.
So, in a nod to acknowledging the reality Americans are experiencing, the revised growth forecast is anemic: from 2.7 percent to 2.3 percent for 2012 and from 3 percent to 2.7 percent for 2013. No need to worry, though, because once the president is re-elected and his agenda fully implemented, the Office of Management and Budget says the economy will improve from 2014 to 2017 with growth predicted at 3.5 percent, 4.1 percent, 4.0 percent, and 3.8 percent. While the assertion is not quite at the level of claiming to have found the fountain of youth, it hovers in the vicinity of a cure for cellulite. In other words, shame on us if we believe it ... again.
During this entire period of economic stagnation, Obama and the first lady have been busy creating distractions. When they appear on shows such as Mythbusters and on the Food Network, you cannot escape the their genuine charm and eloquence. But, in our economic straits, it is legitimate to question how long one man can talk about the death of Osama Bin Laden, no matter how worthy an achievement? We are about to find out. Also, do not forget about real controversies like Mitt Romney's car elevator, truly a matter of national importance when GDP growth was a whopping 1.5 percent in the second quarter of this year.
It would be naïve to assume that any White House growth predictions lack a political context. During every administration, economists are under pressure to predict the future as brighter than today. Unfortunately, like the theme song from Annie we are told to bet our bottom dollar that the sun will come out tomorrow—and that just is not likely given the president's policy agenda.