Did Obama's Budget Proposals Hide His True Economic Plan?

[Lapidus]

According to Obama himself, his policies when he got elected were intended to limit unemployment to 8% rather than his predicted 9%.

So there are two possibilities based on this graph and what we now know happened:

1. He badly underestimated how bad the economy was when he got into office.
2. His policies increased, instead of decreased, unemployment.

Which do you think is more likely?

And while we're at it - please provide a reference for your claim that the economy was predicted to be headed for a full-blown depression. You said at least three times in that post that there is plenty of money out there to be invested, a fact which I agree with - companies have been hoarding money. No doubt, you believe this is a serious problem, otherwise you wouldn't have said it several times. So doesn't it make sense to implement policies that would promote investment by private companies, with money that they have sitting in the bank, rather than investment by the government, with borrowed money? Further, is it possible that a high debt and uncertain prospects for correcting the problem have played a part in companies' reluctance to invest?

You constantly demand for every simple and well-known facts reference and present us a chart from innocentbystander?? Which claims to know how the unemployment would have developed if the government would have taken no action??

If there so much money floating around, so much private wealth, but all this money does not know where to go to invest, and at the same time low and middle-income people have increasingly less money available, which means there is very little money for consumption, but the US economy relies so much on consumption, what is the conclusion?

Of course: tax the high-income people a bit more, do not increase the burden on low and middle income people too drastic.

If consumer confidence is back, investment will pick up again.

 

[russ_watters]

You constantly demand for every simple and well-known facts reference and present us a chart from innocentbystander?? Which claims to know how the unemployment would have developed if the government would have taken no action??

You misread the chart. As it says: Everything on the chart excpt for the maroon dots was created by the Obama admin. Those are Obama's predictions, with the reality of what actually happened plotted over top of them.

If consumer confidence is back, investment will pick up again.

On that, at least, we agree.

 

[WhoWee]

Now that the US credit rating has been downgraded - President Obama needs a new plan (other than to blame Republicans and make campaign speeches) - doesn't he? Unfortunately, he really doesn't have any executive experience prior to being elected and relies on people like Geithner to guide him. I consider this a problem as Geithner just 3 months ago said there was no chance of a credit downgrade - how naive of him?

 

[russ_watters]

Now that the US credit rating has been downgraded - President Obama needs a new plan (other than to blame Republicans and make campaign speeches) - doesn't he?

Ask and ye shall receive:

President Barack Obama will unveil a new job growth package in a speech to be delivered in early September, a senior administration official told CNN Wednesday...

The administration has not finalized that package, but it's likely to include tax cuts, spending on infrastructure and measures designed both to assist the long-term unemployed and bolster certain struggling sectors of the economy, the official said.

The White House noted that the plan remains a work in progress. Obama intends to continue refining it during his upcoming vacation in Martha's Vineyard, Massachusetts, a senior official told CNN...

Obama also plans to revisit the issue of deficit reduction this fall. The president, according to a senior administration official, will present a proposal for more than $1.5 trillion in savings to the 12-member congressional "super committee" established as part of the recent deal to raise the nation's debt ceiling...

It remains unclear whether Obama will address his debt reduction proposal during the September jobs speech, an administration official said.

http://www.cnn.com/2011/POLITICS/08/17/obama.jobs.speech/index.html?hpt=hp_t2

So Obama's working on deficit plan and a jobs plan while on vacation. The jobs plan is to come out just after Labor Day (3 weeks from now), but it is unclear when the deficit plan will be coming out. I have so many rebuttals for this that it's making my head spin, so why don't you take the first crack at it WhoWee. Don't ever say I'm not a giving person.

 

[mheslep]

Ask and ye shall receive: http://www.cnn.com/2011/POLITICS/08/17/obama.jobs.speech/index.html?hpt=hp_t2
...

...spending on infrastructure and measures designed both to assist the long-term unemployed and bolster certain struggling sectors of the economy, the official said.

Really, more spending? He might as well just phone it in.

 

[Proton Soup]

Really, more spending? He might as well just phone it in.

not that i have much faith in washington, but honest-to-god infrastructure like rebuilding bridges, or even something as lofty as high speed rail, would make 1000% more sense than p***ing it away through the banking system. actually getting some value in durable goods would be a much-welcome change.

 

[Newai]

Russ, did you find Doctor Pion's version of this graph?

The other big news was the release of the June unemployment data, which allows us to add the first NEW data point to an infamous graph showing projected quarterly average unemployment rates. Below is an update of the graph I showed last month to correct some major misconceptions about what the economy was doing - and was going to keep doing - before Obama took office.

http://doctorpion.blogspot.com/2009/07/green-shoots.html

He had edited in a correction to that graph in the link above.

 

[Zefram]

That's not what I asked, but it is related to #1: That he misunderstood the state of the economy when he entered. So you agree that he misunderstood the state of the economy?

It should be common knowledge at this point that in early 2009 virtually everyone underestimated the magnitude of the downturn. For example:

February 5, 2010:

But many economists may view this release as more disappointing than the previous month's figure. The Labour Department published the results of its annual benchmark revision of previous employment data. Through the 12 months to March 2009, the American economy lost 930,000 more jobs than had been previously estimated. It now appears that over 700,000 jobs were lost in each of the first three months of last year, a significantly worse performance than originally thought.​

Or http://www.cbsnews.com/stories/2011/07/29/business/main20085254.shtml:

The 2007-2009 recession - already in the record books as the worst in the 66 years since the end of World War II - was even worse than previously thought.

From the start of the recession at the end of 2007 to the end in June of 2009, the U.S. economy shrank 5.1 percent. That is 1 percentage point worse than the previous estimate that the recession reduced total output during that period by 4.1 percent.

The new estimates emerged from the annual revision of economic data prepared by the Commerce Department's Bureau of Economic Analysis and released Friday.​

The reality in 2009 was worse than indicated by the data that economists had at the time.

 

[SixNein]

Then his plan was a total failure - wasn't it?

Obviously, his plan did fail. But I think an interesting question is why did it fail?

There was a combination of disasters, and oil prices spiked. I'm kinda entertaining the idea that oil prices may be putting brakes on growth.

 

[mheslep]

The parlor game of the week is predicting the content of the much hyped Obama plan to be released post Martha's Vineyard. I'll wager large sums that it will call for
1) more stimulus aka 'investment', perhaps even in the form of short term tax cuts
2) non-scoreable spending cuts to come later, ie never while he holds office.
3) at least one reference to himself for every five sentences (rate was 1/6 in the last no-plan plan speech)

 

[WhoWee]

Obviously, his plan did fail. But I think an interesting question is why did it fail?

There was a combination of disasters, and oil prices spiked. I'm kinda entertaining the idea that oil prices may be putting brakes on growth.

There's nothing new about high gas prices or increasing energy costs - here's what President Obama had to say in 2008 on the topic.

http://www.youtube.com/watch?v=5M1WlV7vafk&feature=related