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“The United States of America, right now, has the strongest, most durable economy in the world,” President Obama stated at the 2016 State of the Union address. As his presidency comes to an end, many may wonder, is this assertion a genuine representation of the current state of the economy? Indeed, a lofty claim such as this calls for investigation.
The economy that Obama inherited in 2009 was an unmistakable mess. Unemployment was at a startling 10.3%. The Bush Administration had previously utilized a liberal number of tax cuts and the country’s military spending had skyrocketed to $595 billion – more than double the military spending of the ’90s.
The economy has seen some notable improvements under the Obama Administration. Unemployment began to steadily decline in 2010 after Obama took office, and today it sits at 5% – what most economists would consider acceptable. Since taking office, Obama has added 9.3 million jobs and the stock market is nearing all-time highs.
The Obama Administration, however, has also seen its fair share of shortcomings. The nation has been wrought with debt, and job creation has, in reality, not been Obama’s strong suit. Of the past ten presidents, he ranks just sixth on job creation. Although he has advocated for increasing the minimum wage, wages have been viewed as the biggest flaw of the Administration. People are making less money; the middle class is earning approximately the same today as it did in the mid-’90s.
Obama has highlighted his economic successes in the past by stating that he came into office after the worst economic recession since the Great Depression, which by comparison makes virtually any improvement in the economy appear to be a massive achievement. As Forbes states, “any change is greater, as a percentage, over a low base than over a high one.”
The question at hand now is, does Obama’s statement at the State of the Union address have any credibility?
The answer is yes, but it’s not so simple.
The statement is a difficult one to accurately assess due to its vagueness, but for the time being, the US’s economy looks quite favorable compared to the rest of the world. As the EU approaches a recession, “America’s recovery is the envy of the rich world.” However, “being the best of the bunch when the bunch has done so miserably is not exactly reason for cheer.” For now, however, the economy is experiencing growth.
Despite the current upswing, economists predict that the next president will inherit a slowing economy. As the state of international economies dwindles – specifically that of China – a mild recession for the US, although not likely, is a possibility.
The 2016 presidential candidates are already proposing their desired sky-high spending habits, which certainly wont fix any problems.
Photo courtesy of the Wall Street Journal