After 29 months of the most left-wing presidency in US history, the American superpower is heading towards the economic abyss

After 29 months of the most left-wing presidency in US history, the American superpower is heading towards the economic abyss By Nile Gardiner

I imagine there are some very worried figures in the White House today, including the president himself. Today’s job figures are extremely bad news for the Obama administration, and as I noted in my last post, an electoral disaster for Barack Obama in November 2012 is now looking like a distinct possibility. According to the Bureau of Labor Statistics, unemployment has risen again to 9.1 percent, with private employers adding a mere 54,000 jobs in May. That’s up from 9 percent in April, and 8.8 percent in March.

The White House’s chief economist Austan Goolsbee has described the figures as a mere “bump in the road.” In reality they should be a massive wake-up call for an administration that refuses to acknowledge the huge damage its big government policies have done to the American economy, with 13.9 million Americans now out of work.

Under President Obama unemployment has remained above 8 percent for every single month, with the exception of January 2009 when he entered the Oval Office, rising as high as 10.1 percent in October 2009. By any measure, this is a terrible track record, and as even The New York Times acknowledged earlier this week, “no American president since Franklin Delano Roosevelt has won a second term in office when the unemployment rate on Election Day topped 7.2 percent.”

The dire jobs figures are just part of an extraordinarily grim picture for the US economy, nearly two and a half years into the Obama presidency. As ABC News reported yesterday, “a cascade of negative economic reports this week is leaving Americans wondering if this is really a recovery from the recession that officially started December 2007 and ended June 2009.” And the housing market, in which 67 percent of Americans have a stake, is in serious trouble, with home prices sinking to their lowest levels since 2002, falling by 4.2 percent in the first quarter of 2011 and for eight straight months in a row.

In addition, the White House is paralysed in the face of the nation’s towering debts, which reached 62 percent of GDP by the end of 2010, the highest percentage since the end of World War Two. The Congressional Budget Office warned last year in its “alternative fiscal scenario” that “with significantly lower revenues and higher outlays”, the federal debt could grow to a staggering 87 percent of GDP by 2020, rising to 109 percent by 2025 and 185 percent in 2035.

It is little wonder that 66 percent of Americans now worry the federal government will finally run out of their money, and Moody’s Investors Service is threatening to downgrade America’s sterling credit rating unless it gets to grips with the debt crisis. Undoubtedly, the very future of the United States’ position as the word’s only superpower is at stake in the next few years. And as Congressman Paul Ryan, the Reaganite chairman of the House Budget Committee warned in a superb speech last night to the Alexander Hamilton Society in Washington:

The unsustainable trajectory of government spending is accelerating the nation toward the most predictable economic crisis in American history. Years of ignoring the real drivers of our debt have left us with a profound structural problem. In the coming years, our debt is projected to grow to more than three times the size of our entire economy.


This trajectory is catastrophic. By the end of the decade, we will be spending 20 percent of our tax revenue simply paying interest on the debt – and that’s according to optimistic projections… This course is simply unsustainable. If we continue down our current path, then a debt-fueled economic crisis is not a probability. It is a mathematical certainty.

Years of profligate spending, massive bailouts and useless stimulus measures have made America poorer, not richer, and threaten the long-term economic foundations of this great country. President Obama’s big government experiment has been a dangerous failure, only further proof that the deadening hand of federal intervention is the last thing America needs at this time. The United States needs more economic freedom, less government regulation and spending, and lower taxes if it is to create jobs, wealth and prosperity, a message that seems to have been lost on the Obama presidency as it drives the United States towards the financial abyss.

http://blogs.telegraph.co.uk/news/nilegardiner/100090677/after-29-months-of-the-most-left-wing-government-in-us-history-the-american-superpower-is-heading-towards-the-financial-abyss/