If you have been watching the news lately, you will know that the economy is showing signs of getting better, and it seems as if President Obama is on the right track for re-election in 2012.
Here is some data to show an improving economy: nationwide unemployment is down from a twenty-six-year high of 10.2% in 2009 to its current level of 8.3%. The economic declines during the first two quarters of 2009—the year Obama took office—reflecting an economy that had entered a recession before his inauguration, recovered that decline and more. In the stock market, his record is even better. Since his inauguration in 2009 the stock market has risen at an annual rate of16.4% which is after adjustment for inflation–this is one of the best records of all previous administrations. Moreover, a growing number of consumers are saying that they plan to buy cars, houses, and other appliances. Consumer confidence is up from a low of 26.9 in 2009, to 70.2 this March, which is actually down from 71.6 in February.
However, many people are not willing to take this data at face value. For example, Republicans still believe that Obama is one of the worst things that has ever happened to this country. Their negative sentiment ranges from Michelle Bachman attaching the phrase “Get Obama out of the White House” to every other reply she gave on the Republican presidential debates, to Republican House Majority Leader and House Speaker John Boehner admitting that the economy is recovering, though qualifying his statement by saying that the economy should be doing a lot better than it is right now.
But there is data showing reason for their concern. America wants and needs a strong economic recovery and unemployment eventually down to 6% or less, but that doesn’t seem to be happening at the moment. The recovery is weak, weaker than many other recoveries America has experienced. For example, Chairman of the Federal Reserve Ben Bernanke said, “We need to be cautious and make sure this is sustainable.” He cautioned that long term unemployment could still be a problem and the threat of a double dip is feared by all economists.
Some economists even believe that no real recovery is occurring. Economist David Rosenberg says that the economy is not fundamentally recovering, despite the government’s enormous deficits and the vast injection of a lot of money into the economy by the Fed. In fact, he goes so far as to say the recovery is being driven by warm weather, which would leave the frightening question of what happens when the warm weather ends. The growing deficit which leads an increasing debt-to-GDP ratio is even more problematic. Basically, the total value of everything our debt is getting closer to the total value our economy produces each year which poses a problem that would have to be addressed by future generations and could seriously stunt the economy.
So in conclusion, the economy is slightly improving, but it is far from a strong or reliable growth. We must wait and see what will happen. Unemployment must go down farther. In addition, the long-term problems of our economy and the long-term repercussions of our responses to this recession must be addressed. Nevertheless, no one disagrees that the economy is improving at this moment—the question is the quality of the improvement. Speaking in the short term, it seems as if growth will continue. The reason there is controversy is that people are not satisfied with the levels of growth and its cost.