The Shocking Truth About Obama’s Economy

Barack Obama is one of the biggest “Keynesians” of all time, but unfortunately most Americans don’t even understand what that means.  In this article, I am going to share with you the primary reason why Barack Obama has been able to prop up the U.S. economy over the past eight years.  If Barack Obama had not taken the extreme measures that he did, we would be in the midst of a historic economic depression right now.  But by propping things up in the short-term, he has absolutely demolished our long-term economic future.  But like most politicians, Obama has been willing to sacrifice the future for short-term political gain.

If you take any basic college course in economics, you are going to learn about John Maynard Keynes.  Without a doubt, Keynes was one of the most famous economists of the 20th century, and one of the things that he believed was that governments should go into debt and spend more money when an economic downturn strikes.  By injecting additional funds into the economy during a time of crisis, he believed that the severity of recessions and depressions could be reduced.  This approach ultimately become known as “Keynesian economics”, and in the post-World War II era virtually the entire world embraced it at least to some degree.  Here is more on Keynes from Investopedia

An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed by the British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression. Keynes advocated increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the Depression. Subsequently, the term “Keynesian economics” was used to refer to the concept that optimal economic performance could be achieved – and economic slumps prevented – by influencing aggregate demand through activist stabilization and economic intervention policies by the government. Keynesian economics is considered to be a “demand-side” theory that focuses on changes in the economy over the short run.

Keynesian economists correctly point out that there is a “multiplier effect” to government spending.  In other words, when the government spends money it ends up in the hands of ordinary people.  In turn, those people spend that money on various goods and services that they need, thus boosting overall economic activity.  And the more the money circulates, the more the economy is stimulated.  So one dollar of additional government spending does not just add one dollar to GDP.  Rather, the impact on GDP is often significantly greater than that.

Of course the bad news is that whenever the government borrows money it is stealing consumption from the future.  So we are literally destroying the future that our children and our grandchildren were supposed to have in order to make the present look a little bit brighter.

When Barack Obama entered the White House, the U.S. was in the midst of the worst financial crisis since the Great Depression.  The Bush administration had already begun to ramp up spending, but Barack Obama took “government stimulus” to ridiculous new levels.  The national debt has risen by an average of more than 1.1 trillion dollars a year while Obama has been in charge, and this fiscal year we are on pace to add more than 2 trillion dollars to the debt.

At this moment, the U.S. national debt is a whopping $19,901,545,151,126.51, and it will cross the 20 trillion dollar mark by the time Donald Trump is inaugurated on January 20th.

But when Barack Obama was inaugurated, the national debt was only 10.6 trillion dollars.  That means that we have added about 9.3 trillion dollars to the debt since that time.

So we have borrowed and spent 9.3 trillion dollars under Obama that we did not have.  But because of the “multiplier effect”, that 9.3 trillion dollars actually had a far greater impact on the U.S. economy.

Let’s be conservative and just double that number.  So that would give us an 18.6 trillion dollar overall impact on U.S. economic activity.  Spread over eight years, that comes to an average GDP impact of 2.325 trillion dollars a year.

But over the last eight years U.S. GDP has only been averaging about 16 trillion dollars a year.  So if you took away 2.3 trillion dollars a year, that would be about one-eighth of our entire economy.

In other words, without all of this debt that Barack Obama and Congress have been getting us into, we would be in the worst economic depression in U.S. history right now.

And I haven’t even factored in state and local government debt, corporate debt or household debt.  The truth is that I am not exaggerating one bit when I say that we are enjoying a debt-fueled standard of living that we simply do not deserve.

But even with all of this debt, the U.S. economy has still not been performing really well.  In fact, Barack Obama is going to be the only president in U.S. history to not have a single year when U.S. GDP grew by at least three percent.

Despite what many in the mainstream media are telling you, the reality of the matter is that Donald Trump is going to inherit an economy that is deeply troubled.  If you doubt this, please see my previous article entitled “11 Very Depressing Economic Realities That Donald Trump Will Inherit From Barack Obama“.

Donald Trump is talking about cutting taxes and reducing regulations, and all of those things are good, but ultimately those measures are not going to matter that much.

What is going to matter is what Donald Trump decides to do about our exploding debt.

If Donald Trump wants the U.S. economy to continue to remain at least somewhat stable in the short-term, he is going to have to keep piling up debt like Obama has.  Because if Trump and the Republicans decide that they want to get our debt under control, that will plunge us into a horrifying economic depression almost immediately.

But if Donald Trump continues to steal money from future generations of Americans at the same pace that Barack Obama has been doing, he will literally be destroying the future of America.  It will be a crime on a scale that is almost beyond words, and if they get a chance to do it, future generations of Americans will look back and curse him for what he has done to us.

So Donald Trump is really in a no-win situation when it comes to the economy.

The only way that he can match Obama’s performance is to do what Obama did, but by doing so he would literally be killing the future.

As a nation we have been consuming far more wealth than we produce for a very, very long time, and the only way that we have been able to do this is because we have been able to go into so much debt.

But now a day of reckoning is fast approaching, and I am not sure if Donald Trump even realizes that he will soon be faced with some incredibly heartbreaking choices.

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About the Author: The Economic Collapse Blog

  • Girls_club

    Cut regulation and taxes and the USA will be in a YUGE boom.

  • JohnDille

    WELL.. SINCE YOU ARE AN IDIOT, I SHOULD JUST IGNORE YOU! BUT.. TO BE FAIR TO YOU, I SHOULD NOTE THAT I HAVE EXTENSIVE KNOWLEDGE OF… AND A GOOD UNDERSTANDING OF… BOTH ECONOMICS AND POLITICS… IN LARGE MEASURE BECAUSE BOTH ARE CLOSELY RELATED! YOU CANNOT STUDY ONE WITHOUT LEARNING A LOT ABOUT THE OTHER!
    HIGH INCOME EARNERS GET FAR FAR FAR MORE BENEFIT FROM GOVERMENT SPENDING THAN ORDINARY PEOPLE DO!!! THAT IS WHY THEY ARE WEALTHY… AND THAT IS ALSO WHY IT IS CONSIDERED TOTALLY FAIR THAT THEY PAY MUCH HIGHER TAXES THAN ORDINARY PEOPLE PAY! YOU WOULD KNOW THAT IF YOU UNDERSTOOD EVEN BASIC ECONOMICS!
    IF YOU GO BACK TO THE BEGINNING OF THE MODERN ERA… WHICH BEGAN WITH FRANKLIN ROOSEVELT AND HIS NEW DEAL… YOU WOULD CLEARLY SEE THAT THE UNITED STATES… AND MOST ESPECIALLY WORKING PEOPLE… ORDINARY PEOPLE… HAVE DONE MUCH MUCH BETTER UNDER DEMOCRATIC GOVERNANCE. THE PROBLEM IN THE USA IS THAT DEMOCRATS HAVE NOT HELD TOTAL CONTROL OF THE GOVERNMENT SINCE LYNDON JOHNSON WAS IN THE WHITE HOUSE… ALMOST 50 YEARS AGO!!! AS REPUBLICANS HAVE GOTTEN MORE POWERFUL… THE RICH HAVE GOTTEN FAR FAR FAR RICHER AND FAR FAR FAR MORE POWERFUL… AND ALL THE REST OF US HAVE SUFFERED BECAUSE OF THAT!
    AS FOR YOUR CHILISH BELIEF THAT BOTH PARTIES ARE THE SAME… THEN EXPLAIN TO ME WHY REPUBLICANS CONSISTENTLY DO STUFF THAT IS WONDERFUL FOR THE RICH… AND SCREW OVER ALL THE REST OF US… WHILE DEMOCRATS… WHEN THEY ARE ABLE TO… DO EXACTLY THE OPPOSITE!!! AS NOTED EARLIER… DEMOCRATS HAVE HAD EVER LESS HOLD ON THE ECONOMIC AND POLITICAL POWER OF THIS NATION EVER SINCE THE 1970’S… WHEN SOUTHERN DEMOCRATS REBELLED AGAINST THE CIVIL RIGHTS LAWS THAT LIBERALS AND MODERATES OF BOTH PARTIES PASSED INTO LAW… AND WHEN RICH RIGHT WING REPUBLICANS ALLIED THEMSELVES WITH SOUTHERN DEMOCRATS… NOW NEARLY ALL REPUBLICANS… TO EFFECTIVELY SIEZE CONTROL OF THIS NATION! THAT WAS ABOUT 40 YEARS AGO… AND EVER SINCE THEN, REPUBLICANS… NOT DEMOCRATS… HAVE EVER MORE TOTALLY CONTROLLED THIS NATION… TO THE EVER GREATER DETRIMENT OF WORKING PEOPLE… ORDINARY PEOPLE!!! AND WORKING PEOPLE… ORDINARY PEOPLE… WHO SUPPORT REPUBLICANS… ARE ALL BRAIN WASHED IDIOTS, JUST LIKE YOU!!!

  • Nathan Thurman

    John,

    It is incredibly difficult to digest your drivel. I think your understanding of politics is at a JV level, or perhaps you are simply having an off day. YOU DID TYPE IN ALL CAPS, AFTER ALL. You look elementary when you have this gospel conviction that you think Bush and Obama are that much different; like either was a better president. The both suck ball sacks!

    The mere fact that you think it’s okay to rob from anyone is disgusting. How is it okay to tax high income earners at a higher percent? How is it okay to steal from their future? The wealthy elite, know how to get around taxes, and therefore pay little to no tax. You don’t get it. The wealthy elite are the people that already have money and don’t need to create an income. In fact they do the exact opposite. They know how to get around the tax code, because their wealthy crony attorney’s wrote the code.

    The government is bloated, pure and simple. Prices are completely exagerated on both party lines. Both sides pad their cronies pockets with inflated prices for goods sold to the government. Both Obama and the Bush Cartel are a disgrace to this country. They are both progressive socialists. One is more of a Marxist. Neither represent freedom. Taxes do not represent freedom. The article is on-point that our country is crumbling at the hands of greedy politicians that really don’t know their elbow from their —hole.

    Lastly, if you look through our presidential history; the worst times were while a Democrat was in office. Deals got signed into law and we are now facing the ramifications of those deals. Think the Federal Reserve, IRS, The New Deal, The Patriot Act, and the Affordable Care Act.

  • JohnDille

    OBAMA WAS ABSOLUTELY RIGHT… BUSH JUNIOR DOUBLED THE FEDERAL DEBT… FROM JUST OVER 5 TRILLION TO ALMOST 11 TRILLION… WHILE HE WAS STILL IN OFFICE… AND ACCOMPLISHED ABSOLUTELY NOTHING BY DOING THAT!!! AND EVEN WORSE… BUSH BUILT MASSIVE DEFICITS INTO THE BUDGET THAT OBAMA INHERITED… AND IT TOOK YEARS FOR OBAMA TO GET THE REPUBLICANS TO RAISE TAXES ON THE RICH ENOUGH TO CUT THE DEFICITS THAT OBAMA INHERITED FROM BUSH JUNIOR… BY ABOUT 70%!!! IF OBAMA HAD NOT BEEN ABLE TO GET REPUBLICANS TO RAISE TAXES ON THE RICH… THE FEDERAL DEBT WOULD BE AT LEAST 3 TRILLION MORE THAN IT CURENTLY IS… ALL THANKS TO GEORGE BUSH JUNIOR AND HIS MASSIVE MASSIVE MASSIVE TAX CUTS FOR THE RICH AND FOR CORPORATE AMERICA!!! OOOOOPS!!! I JUST STATED HARD DOCUMENTABLE FACTS…BECAUSE I FORGOT THAT JOE CABOT BELIEVES IN THE TOOTH FAIRY AND IN REPUBLICAN””””FACTS”””… BETTER KNOWN TO ALL HONEST PEOPLE AS OUTRIGHT LIES AND STEER MANURE!!!

  • JohnDille

    SHRINKING THE GOVERNMENT MEANS SHRINKING THE ECONOMY… PERIOD!!! THAT IS WHY THE ECONOMY HAS GROWN SO SLOWLY FOR THE LAST 7 YEARS! NOT ONLY HAVE REPUBLICANS DONE IRREPARABLE DAMGE TO THE WHOLE US ECONOMIC SYSTEM, BUT REPUBLICANS HAVE BLOCKED AND BLOCKED AND BLOCKED EVERYTHING THAT OBAMA WANTED TO DO TO MAKE THE ECONOMY GROW… MOSTLY BY INVESTING IN ENERGY AND OTHER CRITICAL INFRASTRUCTURE! SO… NOW… TRUMP WANTS TO SPEND HUGE AMOUNTS OF MONEY ON THOSE SAME KINDS OF PROJECTS… BUT REPUBLICANS WILL NOW SUPPORT THAT KIND OF SPENDING???? OH… YEAH… IF WE DO THINGS TRUMPS WAY… THE RICH WILL MAKE OUT LIKE BANDITS. WHEREAS IF WE HAD DONE THINGS OBAMA’S WAY… THE RICH WOULD HAVE HAD TO PAY FOR MOST OF THE COST OF ALL THOSE PROJECTS!!!

  • JohnDille

    Republicans now control the House, the Senate, and the Presidency. Two-thirds of
    governors are Republicans. And more than two-thirds of our state legislative
    houses are under Republican control.
    NOT TO MENTION THAT REPUBLICANS ALMOST TOTALLY OWN AND CONTROL THE ENTIRE US ECONOMIC SYSTEM!!! SO… HOW DOES ANY DEMOCRAT… EVEN THE PRESIDENT OF THE UNITED STATES… ABLE TO DO MUCH MORE THAN INFLUENCE THE ECONOMIC AFFAIRS OF THIS NATION??? ON TOP OF THAT… OBAMA HAS BEEN NO KEYNESAIN!!! IN ACT… THE PRIMARY REASON THAT THE US ECONOMY HAS GROWN SO SLOWLY UNDER OBAMA IS… DRUM ROLL PLEASE… SPENDING BY THE FEDERAL GOVERNMENT HAS GROWN MORE SLOWLY UNDER OBAMA THAN UNDER ANY PRESIDENT SINCE JOHN KENNEDY OR JIMMY CARTER!!! GOVERNMENT SPENDING JUICES ECONOMIC GROWTH… AND SINCE OBAMA HAS NOT BEEN ABLE TO SPEND ON WHAT HE WANTED TO SPEND MONEY ON… INFRASTRUCTURE CONSTRUCTION AND MAINTENANCE, FOR EXAMPLE… THE ECONOMY HAS GROWN RATHER SLOWLY! SO… DONALD TRUMP IS GOING TO STIMULATE THE ECONOMY… BY DOING WHAT DEMOCRATS HAVE BEEN TRYING TO DO FOR THE LAST 40 YEARS???? EXCEPT THAT… TRUMP WANTS TO BORROW AT HIGH INTEREST RATES SO HE CAN GIVE TRILLIONS OF DOLLARS TO THE RICH… IN INTEREST INCOME… INSTEAD OF DOING LIKE DEMOCRATS WOULD HAVE DONE… BY RAISING TAXES ON THE RICH TO PAY FOR ALL THOSE PROJECTS!!! POOR DELUDED REPUBLICANS!!! THEY HAVE BEEN LIED TO SO MUCH BY THEIR BILLIONAIRE SLAVE MASTERS THAT THEY HAVE NO IDEA WHAT THE ACTUAL TRUTH ABOUT ANYTHING IS!!!

  • drose

    The article assumes a fixed “pie” for lack of a better explanation. If the pie grows larger, then revenues to the government can increase even though tax rates have decreased. The need for debt can decrease and be extinguished, but only if new government spending is kept in check, waste, fraud and abuse is curtailed, and the overall size of government is shrunk. Many functions now performed by the Federal government can and should be eliminated and some of the funds block granted to the states for their use.

  • Joe Cabot

    Obomber on the federal debt load increasing by $4 billion under the Bush administration: “It is unpatriotic and irresponsible to saddle future generations with such a large national debt”.