Monday, September 24, 2012

Are You better of then you were for years ago part 1

        The question that has been asked many times this election is are you better of than you were 4 years ago. The answer is no. However, Bush was still in office. A better question is are Americans better of then they were when Obama took office. My answer to this is, it depends. In part 1, I will mention unemployment, other economic factors, and the national debt.

         Even with unemployment above 8 percent, it isn't as bad as people think. Many people start the counting at January 2009, but since Obama didn't take office until two-thirds through the month, this is inaccurate. Using the January and December unemployment rate, and going  two thirds to the 
January one (Obama's inauguration date is 2/3 the way between beginning of January and February) the rate rounds to 7.7%, about  .4% less  than it is right now. Also the president has created jobs. Using the number of jobs added before the August report, then adding the number of jobs added in this report, then subtracting the jobs lost through revisions, is 773,000. Also using the January job losses and february job losses, and going 2 thirds to the february one, when Obama took office, the US was losing about 753,000 jobs a month. In August, the economy created 96,000 jobs. 96,000 jobs created a month is still a bad number, but it is much better then when Obama took office. However, it is worth noting that this doesn't keep up with population growth of the people eligible to be in the workforce, and the only reason the unemployment rate is the same is because of people dropping out of the work force. It is also worth noting that the only president since 1961 to create fewer jobs was George W. Bush. Still, this is not as dire as many people in the media would have you to believe. 

    With other economic data there is also a mixed picture. Median income at June 2009 was 53,508, while median income as of June 2012 was about 50,964. This is about a 4.8% drop. Consumer confidence from August of this year is down to 60.6 from 65.4 in July. However this is still better far better then the consumer confidence of about 29 when Obama took office (using the method I used earlier). The stock market is also significantly better. On January 20, 2009, the S&P 500 closed at 805.22 compared to a 1456.89 today (written of September 24, 2012). This has led to a rise in the value of many people's investments and retirement funds.The banking industry and auto-industry have come back from the brink of collapse. However, it it important to note that many of the policies that helped these sectors recover took place at the end of George W. Bush's term. The median home price when Obama took office was about 209,300, while at the end of July it was 224,200. New home sales when Obama took office were about 322,000. In July, new home sales were at 372,000. The poverty rate in 2009 was 14.3% compared with 15.9% in 2011. Gas prices are significantly higher since the beginning of Obama's term because of instability in the Middle East. Higher transportation cost (because of higher gas prices), and a drought across much of the nation has led to higher food prices.  Economic conditions seem to be about the same as when Obama took office.

    Lastly the debt is more then $4 trillion greater then it was when Obama took office. However, much of this can be attributed to policies made under previous administrations, the economy, and an aging population. The Bush tax cuts and the wars and Iraq and Afghanistan had much to do with the rising debt. The bad economy, which caused a large decrease in revenue, was also a big factor. The baby boomers retiring has cause more people receiving Social Security and Medicare. This is not to say Obama is blameless. His stimulus laws and lack of a compromise has allowed the debt to become as large as it is. Even on that, the stimulus has helped the economy recover. According to the CBO, as of the third quarter of 2011, the Stimulus created 500,000 to 3.3 million full time jobs and was expected to create between 200,000 and 1.1 million full time jobs by the third quarter of 2012. Also Republicans also have a role (I would argue larger then the Democrats) in the lack of a budget compromise. 

        The question of are Americans better of than they were four years ago is a complex question. The answer for this question, at least on the economic side, is no, we are the same. However, on many of these issues, America is heading in the right direction.

Update (October 29, 2012): with an unemployment rate of 7.8% and more jobs created, and better housing numbers, the economic factors are better than they were when the post was originally created
Sources,,                                                       ,,,,,,,,,,

No comments:

Post a Comment