President Obama’s economic adviser Gene Sperling blamed the economy the president inherited for today’s unemployment report with a jobless rate at 9.1%. Keep in mind that the president promised an unemployment figure of 8%.
Sperling claimed that 11 million jobs had been “saved” due to the president’s spending policies. Here are his full comments:
The president inherited an economy that we now know was falling at almost 9 percent per year — 8.9 percent — of the fourth quarter of 2008. Independent analysts found that the Recovery Act that the president put forward meant a difference of about 8 million jobs in 2010 and up to 3 million jobs in the second quarter of this year. What the president was fighting for, working his heart out everyday this summer was to get a long-term plan that would give long-term fiscal certainty.
This is nonsense. During the Reagan administration, the American economy went from a GDP growth of -0.3% in 1980 to 4.1% in 1988, which reduced the unemployment rate by 1.6%, from 7.1% in 1980 to 5.5% in 1988. This was near full employment. The inflation rate during Carter’s administration was 13.5%. It fell to 4.1% in 1988. Interest rates had peaked at 20% in June 1981. Reagan’s policies of tax reduction and regulatory reform. Reagan’s policies are widely recognized as bringing about the second longest peacetime economic expansion in U.S. history, surpassed in duration only by the 1990s expansion that began under George H. W. Bush in 1991.
In 1981, Reagan significantly reduced the maximum tax rate, which affected the highest income earners, and lowered the top marginal tax rate from 70% to 50%. In 1986, he further reduced the rate to 28%. The federal deficit fell from 6% of GDP in 1983 to 3.2% of GDP in 1987.[ The Federal deficit in Reagan’s final budget fell to 2.9% of GDP. The rate of growth in Federal spending fell from 4% under Jimmy Carter to 2.5% under Ronald Reagan.
Today, inflation is relatively low, certainly lower than it was when Reagan inherited Carter’s economic policies, and interest rates are the lowest they’ve been in generations. Mortgage rates are in the low fours. What’s stalling the economy is regulatory control and the fear that Obama will raise taxes.
It is time for the blame shifting to stop. We are in this mess because of President Obama’s policies.