In an April interview with the New York Times, President Obama said Americans don’t properly appreciate the benefits of his economic policies.
According to Bloomberg writer Narayana Kocherlakota, in January 2009 during the President’s first term, the Congressional Budget Office (CBO) issued a ten-year forecast for the economy which included such indicators as unemployment, gross domestic product, the budget deficit, government debt and interest rates.
In looking towards 2015, the CBO thought unemployment would be 4.9 percent and it was 5.3 percent. Since the Labor Department has long ago dropped those who have given up looking for a job from their calculation, the actual number should have been 20 percent.
In 2009, the CBO saw real GDP growth through 2015 at 20 percent. It is half that number. The budget deficit as a percent of GDP was supposed to be 1.2 percent. It is twice as high. Government debt as a percent of GDP was to be 48 percent. It is now 74 percent. We owe nearly $20 trillion.
The whole picture is a sorry one. Total income growth in the United States has fallen.
According to Mr. Koecherlakota, “No number expresses the economy’s weakness better than the yield on the three-month treasury bill, which captures market expectations of what the Federal Reserve will do with interest rates over the next three months. Instead of recovering to near 5 percent as the CBO predicted, the yield is close to zero.” In Europe and Japan the yield is below zero.
The low interest rates reflect the large amount of uncertainty among households and businesses.
In a late April survey, Americans were asked if an emergency occurred that required $400 to fix would they have the money? Forty percent responded that they do not have the money or access to it. No savings, no retirement. This is worse than living paycheck to paycheck since there is no paycheck.
Also in April, the number of Americans applying for unemployment benefits rose by 9,000 to 257,000. Some 2.13 million people collect weekly unemployment benefits.
On the numbers side, nonresidential fixed investment, a measure of business spending, fell 5.9 percent, the biggest drop since the waning days of the recession according to Morning Star. Spending on structures and equipment also sank.
New home construction and home remodeling climbed 14.8 percent in the first quarter, the fastest pace since 2012. Unfortunately, the rate that Americans own their own homes fell in the first quarter to the third lowest on record, another indication that worsening finances.
According to Market Watch, the home ownership rate was 67.8 percent in the quarter the United States entered recession. Today it stands at 63.6 percent. This all comes at a time when mortgage rates remain at all-time lows. Freddie Mac reported the benchmark 30-year fixed-rate mortgage was 3.66 percent in the week ending April 28. The median asking price for rent was $870 in the quarter.
Unfortunately, working Americans have not seen a raise in income in nearly 15 years. The recession reduced most 401(k) plans by half and the low-interest rates penalized savers.
For those who do have jobs, they have seen both political parties encouraging amnesty for illegal immigrants who will further drive down the wage scale. Trade agreements proposed by Washington politicians are good for foreign countries and terrible for American exports.
Many policymakers seem to accept that this picture is the best America can do. Americans, especially Republicans, reject the idea as seen by the primary votes.
Today Donald Trump is on his way to amass the most primary votes in GOP history. With 10 primary states to go (before the Indiana primary), Mr. Trump has 10.1 million votes – about 200,000 more that Mitt Romney got during the entire 2012 primary campaign.
Americans want change and the return to making America great again. As Hall of Fame Coach Bobby Knight said in Indianapolis, Donald Trump is “the most prepared man in history to step in as president of the United Sates.”