Four years ago, President Obama could legitimately say he inherited a mess. Unemployment was about to hit 10 percent. The auto industry was on the verge of collapse. Don’t even mention real estate. And, the stock markets were in freefall. Well, now, it’s 2013, and the president is inheriting his own economy. How does it look?
“Underperforming,” says Douglas Holtz-Eakin, a Republican economist and president of the American Action Forum.
Michael Linden, director for tax and budget policy at the left-leaning Center for American Progress, says Obama, “still has to deal with the some of the hangover effects from the enormous recession.”
And Joe Minarik, senior vice president and director of research at the Committee for Economic Development, says, “We are beginning to see an acceleration in the economy.”
Now, the unemployment rate is below 8 percent. The auto industry is back. Home sales and the stock market are near five-year highs.
But Minarik says Obama’s first term was defined by short-term economic policies.
“I think that was one of the worst aspects of our budgetary situation,” he says.
At a House Ways and Means Committee hearing Tuesday, MIT economics professor Simon Johnson suggested that lawmakers were holding the economy hostage. He urged them to raise the debt ceiling now, or else, as he put it: “You will continue to undermine the private sector. You will continue to delay investment. You will continue to delay investment and to reduce employment."
All this is tied to Obama’s promise to strengthen the middle class.
“Unemployment is still high, though it is coming down. Inequality is rising,” Linden says.
But Holtz-Eakin thinks the debt is the number one issue. Countries with debts as large as ours, he says, “grow more slowly and face a greater risk of crisis.”
And, we haven’t even mentioned the fragile global economy. So, Mr. President, good luck on term number two.