Lately there has been a fair amount of happy talk from liberal pundits about our supposedly robust economy. Such optimistic evaluations have been guarded, since everyone knows that the jobs picture is still bleak, largely because of runaway legal and illegal immigration. But there is an even more fundamental measure by which the Obama administration is an economic failure.
The 2014 numbers are now in on America’s gross domestic product, the total amount of wealth generated over the course of a year, as best it can be measured. They are grim, as the Wall Street Journal reports:
The Commerce Department’s third estimate of fourth-quarter gross domestic product also showed that the economy slowed in the final months of 2014, putting the growth trajectory on a lower path ahead of an apparent slowdown early this year.
GDP, the broadest measure of goods and services produced across the economy, expanded at a seasonally adjusted annual rate of 2.2% in the fourth quarter, the Commerce Department said.
This means that the GDP grew by only 2.2% for the year as a whole, as well. Click to enlarge:
This is down from last year’s GDP growth of around 3.1%.
Is 2.2% an acceptable rate of economic growth? No, but don’t take my word for it. By the Obama administration’s own standards, it has been a failure.
President Obama submitted his proposed budget for FY 2011 in February 2010. Its tone was triumphalist. Obama had the good fortune to take office in the wake of a financial collapse and a recession, and his budget predicted robust economic growth in the years to come. Table S-1 set out, among other things, the administration’s projections of GDP in future years. Here they are, in billions of dollars, along with my calculation of the projected growth rate:
2013 17,182 = 6%
2014 18,139 = 5.6%
2015 19,190 = 5.8%
2016 20,163 = 5%
The federal fiscal year runs from October to October, so it is not exactly coextensive with the calendar year, but that discrepancy is immaterial for this purpose. As you can see, the Obama administration expected its policies to produce GDP growth of 5% to 6% in 2014, far more than the 2.2% actually experienced, as well as the 3.1% attained in 2013.
As time went by, Obama’s economists realized that the administration’s policies were not producing the growth they had expected. Thus, in February 2012, when the administration released its proposed budget for FY 2013, its projections were revised as follows:
FY 2012 15,602
FY 2013 16,335 = 4.7%
FY 2014 17,156 = 5%
FY 2015 18,178 = 6%
FY 2016 19,261 = 6%
Note that the projection for FY 2013 was revised downward by $847 billion. Still, prosperity was just around the corner, as the administration still expected growth in 2014 to be 5% to 6%, with robust growth thereafter.
Two years later, the numbers had changed again. When the president’s FY 2015 budget was released in March 2014, these were the predicted GDP numbers:
FY 2013 16,619
FY 2014 17,332 = 4.3%
FY 2015 18,219 = 5.1%
FY 2016 19,181 = 5.3%
FY 2017 20,199 = 5.3%
But even then, just one year ago, the Obama administration predicted that economic growth in 2014 would be 4.3% or greater–twice the actual number. The administration’s current projection for FY 2015 is nearly $1 trillion lower than what it expected in 2010. That is around $3,000 per person.
So don’t take my word for it: the Obama administration is an economic failure, judged by its own criteria. Its policies have achieved only a fraction of the economic growth that the administration confidently predicted when it took office. It is remarkable that this failure has occurred, despite exploding energy production and resulting lower prices–which the administration would have prevented, if it could have.
Some, of course, are not surprised. When did cronyism, spiraling government spending, massive government debt, corruption and excessive regulation ever contribute to economic growth? The Obama administration has confirmed something we have known for a long time: left-wing economic policies fail.