Deroy Murdock: U.S. economy slipped badly during last 4 years
NEW YORK — Slip slidin' away ...
Why does America seem to be slouching? Multiple measures have found this country going down, down, down since President Barack Obama's inauguration.
The Geneva-based World Economic Forum (WEF) ranks nations on competitiveness. When Obama came to power, America had dominated this contest for at least three years. The U.S. quickly stumbled from first place in 2008 to second in 2009, fourth in 2010, fifth in 2011, and seventh today.
After examining 144 countries, WEF said this Sept. 4 about America's economic performance:
"The United States continues the decline that began a few years ago, falling two more positions to take seventh place this year. Although many structural features continue to make its economy extremely productive, a number of escalating and unaddressed weaknesses have lowered the U.S. ranking in recent years ... The business community continues to be critical toward public and private institutions (41st).
In particular, its trust in politicians is not strong (54th) ... Business leaders also remain concerned about the government's ability to maintain arms-length relationships with the private sector (59th), and consider that the government spends its resources relatively wastefully (76th). A lack of macroeconomic stability continues to be the country's greatest area of weakness (111th, down from 90th last year)."
After Standard & Poor's humiliating downgrade of U.S. sovereign debt on Aug. 5, 2011, America has suffered two more demotions. Egan-Jones, one of nine rating agencies "nationally recognized" by the Securities and Exchange Commission, lowered America's debt from AA+ to AA last April, and from AA to AA- last Sept. 14. Egan-Jones previously had chopped America's long-time AAA debt status to AA+ on July 16, 2011, foreshadowing by more than a fortnight Standard & Poor's higher-profile downgrade.
Egan-Jones said the Federal Reserve's Argentine-style money printing — most recently via its $40 billion-per-month exchange of mortgage-backed securities for freshly minted cash — threatens to pound the dollar as thin as phyllo dough.
"The Fed's QE3 will stoke the stock market and commodity prices but, in our opinion, will hurt the U.S. economy and, by extension, credit quality," observed Egan-Jones' statement on the Fed's "Quantitative Easing" policy. "The increased cost of commodities will pressure profitability of businesses, and increase the costs of consumers thereby reducing consumer purchasing power."
America has deteriorated from a debt/GDP ratio of 76 percent when Obama took office to 104 percent today. This ties directly to Obama's 52 percent expansion of America's national debt, from $10.63 trillion at his inauguration to $16.17 trillion today. (GDP simultaneously grew just 11 percent, from $13.97 trillion to $15.58 trillion.) This burgeoning indebtedness reflects Obama's shattered promise to "cut the deficit in half by the end of my first term in office."
The Bureau of Economic Analysis on September 27 revised second-quarter GDP growth downward, from 1.7 to 1.3 percent. America now trails growth in Cuba, which advanced by 2.1 percent between April and June.
While the U.S. economy supposedly is in recovery, inflation-adjusted median household income is shrinking. As the Great Recession officially ended in June 2009, that figure stood at $53,718. By last August, such a typical household saw its income shrivel to $50,678, a 5.7 percent reduction totaling $3,040 in lost buying power.
Some of these trends pre-date Obama. The Big Government Bush-Rove Administration cravenly ballooned the state. In an unprincipled and quixotic effort to create Rove's "durable Republican majority," he and Bush deployed new entitlements, boondoggles, pork projects, and other "compassionate conservative" outlays. These fools' errands beggared the nation while costing the GOP control of Congress in 2006 and the White House in 2008. Nice work, George and Karl.
Obama correctly blames Bush-Rove for this fine mess. Alas, Obama exacerbates it. He is like a firefighter who finds a house ablaze and denounces the arsonists who ignited the inferno. But then Obama shovels coal onto the flames.
After four years of inhaling Obama's smoke, Americans finally may be ready to breathe normally again under Romney-Ryan.
Deroy Murdock is a columnist with Scripps Howard News Service and a media fellow with Stanford University's Hoover Institution on War, Revolution and Peace. Email Deroy.Murdock@gmail.com.
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