By Bill Wilson — In 2011, the economy slowed down considerably to a tepid snail’s pace of 1.7 percent for the year. The housing bubble popped in August 2007, and the economy contracted in its aftermath. Here we are, four years later, and the economy is still very weak, unemployment remains unacceptably high, consumer inflation is still rising, and the cost of doing business in America remains among the highest in the developed world. Have we really turned the corner?
Interestingly, the Bureau points to a slowdown of government spending in 2011 as leading the drop in GDP, even though at the federal level spending still increased last year. This proves that the ‘stimulus’ of 2009 and 2010 merely created some artificial demand for goods and services, which, once it ran out, did not create a virtuous cycle of growth as promised. The only thing that was apparently accomplished is that now the debt is nearly larger than the economy. Obama has failed.
The Obama administration said ‘stimulus’ needed to be ‘timely, targeted, and temporary,’ and then all would be well. But because the underlying government-created problems in housing, the financial and monetary system, the burdensome regulatory environment, the restrictions on capital creation, and the highest corporate tax rate in the developed world remain unaddressed, all the spending, borrowing and printing produced was a temporary sugar high.
This is the 1930’s all over again, when, no matter how much borrowing, spending, and printing the government did, the economic doldrums persisted through the decade, and meanwhile, government has gotten considerably larger. It is time for a new way forward that will address the supply side of the equation and reduce the cost of doing business stateside, which is the only long-term solution to sustainably grow the economy and create new jobs. We need real growth, not more debt.
Bill Wilson is the President of Americans for Limited Government. You can follow him on Twitter at @BillWilsonALG.