The Dow is over 15,000 and continually testing new highs. The unemployment rate and unemployment claims are at lows that haven’t been seen since before the economic crisis of 2008. If Mitt Romney were president, Republicans would be hailing him as the new Reagan with a better dye job.
Yet a right-wing group is suggesting that President Obama should be impeached for wrecking the stock market and slowing job growth.
The truth is that the Republican Party made a conscious decision to slow the economic recovery the moment the president took office. “After three hours of strategizing, they decided they needed to fight Obama on everything,” PBS’ Frontline reported.
To deny Obama a second term, they knew they had to slow the recovery. And their plan worked in 2010. The unemployment rate was rising as the GOP swept to the largest congressional landslide in the last half-century. However, their plans were thwarted as they paused their most aggressive efforts for the 2012 campaign and job growth continued at a steady pace of around 160,000 new jobs a month.
The Economic Policy Institute’s Josh Bivens and Andrew Fieldhouse summarized how the congressional GOP actively smothered the economic recovery. But the effort to cut spending and spread destructive myths about the economy united the entire party and could have easily caused a recession, if it had only been more effective.
Here are five ways the Republican Party has tried to sabotage our economy.
Weakening And Lying About the Stimulus
The stimulus — along with the auto rescue — should go down in history as the most effective government interventions for long-term job growth since the New Deal. But it could have been so much more effective.
Because three Republican votes were needed in the Senate to pass the American Recovery Act, the total cost of the bill had to be kept under $1 trillion, when $1.8 trillion was needed. Those Republican senators made specific changes to the bill that ended up killing as many as one million jobs, EPI’s Bivens and Fieldhouse explain:
The price tag of getting these votes was nearly $30 billion in school construction funds stripped out of the bill at the insistence of Sen. Susan Collins (R-ME), one of the three GOP votes in the Senate. These funds would have supported roughly 250,000 additional jobs. Further, the final version also included the nearly $70 billion cost of a one-year extension of the Alternative Minimum Tax (AMT) ‘patch’—a provision that provided no stimulus at all, since it was done literally every single year, but which was included to woo another GOP senator, Olympia Snowe. If this amount could instead have been spent on productive stimulus, it could have created roughly 750,000 jobs. In short, just luring the minimal GOP votes needed to pass ARRA in the Senate likely kept it from supporting or creating nearly a million more jobs than it did.
What Republicans did after the stimulus passed was even more destructive. They coordinated their messaging and began calling it “the failed stimulus” before it even went into effect. That talking point was supplemented by millions in political advertising calling the stimulus “failed” and “reckless.”
These lies are easily disproven with the chart above, which tracks initial unemployment claims. President Obama inherited a nearly unprecedented layoff crisis and suddenly reversed it in the middle of his first year, right as the stimulus went into effect. The GOP’s propaganda attack, however, was effective and made passing any more stimulus impossible.
In March of 2013, The Wall Street Journal‘s Phil Izzo estimated that federal, state and local governments employed 950,000 fewer Americans than in June of 2009. Without those cuts, he estimated the unemployment rate would be .6 percent lower, meaning today it would be a flat 7 percent. A Brookings study suggests the unemployment rate could be as low as 6.1 percent if not for cuts.
Some cuts were necessary, given the rapid decline of taxes collected due to the financial crisis. However, Republican governors — such as Wisconsin’s Scott Walker and Michigan’s Rick Snyder — used them to finance tax cuts for businesses that have not produced the job growth voters were promised.
While President Obama and congressional Democrats were able forestall austerity on the federal level until a few years after the crisis, state and local Republicans began cutting immediately after the financial crisis.
No Republican president has balanced a budget since Dwight Eisenhower. A Republican president and Congress took a budget surplus and grew the deficit at a startling pace — Bush Jr.’s final year in office left a deficit of well over a trillion dollars. Despite all this, Republicans decided they were the voice of fiscal reason and President Obama, who grew government at a slower rate than any president since Eisenhower, was busting open your grandchild’s piggy bank to buy beers for Solyndra.
Overwhelmed by impressive message discipline, Democrats bought into the “family budget” analogy Republicans used to justify cuts: What’s the first thing your family does in a crisis? Cut back! But I might cut back on my family’s nuclear weapons first.
Of course, deficit hysteria wasn’t about reducing the deficit. As Bivens and Fieldhouse explain, “To be clear, the GOP members of Congress were not seeking deficit reduction, they were seeking spending cuts.”
It was this hysteria that set the stage for the singularly most destructive thing Republicans did to spite the president and the recovery.
The Debt Limit Crisis
In the summer of 2011, Speaker John Boehner and the House Republicans vowed that they would not raise the debt limit without cuts equal to the amount of the increase. Tea Partiers suggested that we could even default on our debt payments without crashing the global economy.
“Two and a half months after the Treasury Department declared a ‘debt issuance suspension period‘ of unconventional cash-management tools to avoid a default on U.S. debt, the Budget Control Act (BCA) was enacted on Aug. 2, the last day Treasury could avoid defaulting,” according to Bivens and Fieldhouse
Jon Perr of The Daily Kos made the simple chart above to show the direct damage done to the job market by the Republicans holding the debt limit hostage. The stock market erased months of gains in just weeks as consumer confidence flatlined.
It was an act so blatantly destructive that House Republicans and Congress hit approval lows that they have barely recovered from since.
No one thought the sequestration the president agreed to in order to end the debt limit crisis would ever go into effect, because it was designed to be terrible. ABC’s Chris Good explained:
Greater risk of wildfires, fewer OSHA inspections and a risk of more workplace deaths, 125,000 people risking homelessness with cuts to shelters and housing vouchers, neglect for mentally ill and homeless Americans who would lose services, Native Americans getting turned away from hospitals, cuts to schools on reservations and prison lockdowns. There’s also a higher risk of terrorism with surveillance limited and the FBI potentially unable to disrupt plots, closed housing projects, and 600,000 women and children thrown off WIC. In short: Unless a budget deal is cut, the country will be in deep trouble.
But after House Republicans were forced to vote for a bill that didn’t extend tax breaks on income over $400,000, they decided that the cuts of $85 billion were worth taking even if it did hurt their friends in the defense industry.
The ultimate cost to the American public will be 750,000 jobs if all the cuts go into effect. That’s 750,000 more Americans joining millions in the ranks of the unemployed, which include more than 4.4 million who have been out of work for more than 27 weeks.
AP Photo/J. Scott Applewhite