Both the Pew Research Center and the Congressional Budget Office have published reports in the last week that talk about the condition of our economy and the fiscal cliff that awaits us in a few short months. Others have commented extensively on the reports themselves; I want to talk about some of the information that lies between the reports’ lines.
The Pew report focuses on the plight of the middle class, referring to “The Lost Decade of the Middle Class ” in its own headline. The report points out, among other things, that middle class annual income has shrunk from $73k in 2001 (and 2008) to $69.5k in 2010, their most recent data. Pew notes, also, that median middle class household net worth has fallen from $153k in 2008 to $93k in 2010.
The CBO report, on the other hand, has the following to say: if the Obama tax increases and the sequester spending cuts are allowed to go through at the start of 2013, the deficit will be cut roughly in half as a per cent of GDP, but at a cost of economic contraction of 0.5% on the year. On the other hand, if the tax increases and spending cuts are put off for another year, the deficit will remain a damaging 6.5% of GDP, unemployment still will be at 8%, and the economy will grow an anemic 1.7%. This is the fiscal conundrum the present administration’s Keynesian policies have created.
Plainly, the administration’s policies have been an utter failure; they have not produced economic recovery. Indeed, the middle class, whom Progressives pretend to favor so much, have been devastated by those policies. Still, Democratic Presidential Candidate Barack Obama wants four more years in which to do more of the same—or more so, since he’d have “more flexibility” after re-election, when he’d be beholden to no one.
After all, Obama says