The Trump Administration has released its first in-depth economic report that outlines why the U.S. economy has struggled in the recent years.
Specifically, the 600-page report gives a detail analysis on how Obama-era policies halted economic growth.
“The stagnation of America’s middle class in the wake of the recession is much worse than believed, and government policy under President Obama should share some of the blame,” said Kevin Hassett, the chair of the Council of Economic Advisers and the lead author of the report. “One explanation for this historical slowdown is that Obama’s tax and transfer policies worsened the wound.”
“In recent years, the pursuit of alternative policy aspirations at the expense of growth has imposed real economic costs on the American people, in the form of diminished opportunity, security, equity, and even health,” according to the report.
Not to mention, the number of regulations the Obama administration introduced evidently had a negative impact on the economy.
“Mr. Trump’s CEA said the volume of regulations under Mr. Obama had reduced growth and raised the amount of time spent complying with regulations from 8.8 billion hours in 2010 to 9.8 billion in 2015. It mentioned environmental and labor regulations as among those that had been particularly detrimental, and said financial regulations had grown needlessly complex,” writes the Wall Street Journal.
The report offers an explanation on why the labor-force participation rate had dropped significantly during Obama’s presidency.
“It concluded that while the retirement of the oldest members of the baby boomer generation is reducing the labor-force participation rate, half the decline since the fourth quarter of 2007 has been accounted for by non-demographic factors. The report singled out government transfer payments, such as unemployment insurance, food stamps and disability insurance, as programs that contributed to people remaining out of the labor force,” writes WSJ.
While, an Obama- era economic report, argued that the decline in the labor-force participation rate was mostly attributed to Americans recovering from the recession.
Jason Furman, who was the chairman of the CEA under President Barack Obama, defended the past report and pointed out that this rate has been declining in prime-age men since 1970.
“That is at odds with the report’s attempt to pin the blame on Obama’s policies,” said Furman.
But, the current administration has been busy reversing these policy mistakes made by Trump’s predecessor and expects the economy to grow by 3% every year over the next decade.
The report authors anticipate that the new GOP tax plan will increase the average American household income by $4,000 a year.
Instead of dwelling on past mistakes, the report features insights on how the Trump Administration’s policies on taxes, regulation, labor market policies, infrastructure, trade, health and cybersecurity will offer a much needed boost to the GDP.
However, it’s important to point out that these reports are always biased.
But, the recent growth in the economic and job market, along with the low underemployment rate in the last year proves that there is some truth in this report.
Often people argue that the credit of the economic performance during the first year of any president’s term should be given to his predecessor. But most of the 68 economists surveyed in a recent WSJ poll, suggest that President Donald Trump, not Obama, is responsible for fostering the recent booming economy.
The Trump administration has rolled back or delayed thousands of regulations. Also, the stock market has had its best-ever first year under a new administration since the 1940s.
Author’s note: It’s no secret that Obama was inept at handling the economic recession. We should have recovered from the recession much faster. Most of Obama’s policies weren’t business friendly and only halted their growth, which also helped keep the recovery slow-moving.