From James Pethokoukis at Reuters in response to Goldman Sachs lowering GDP projections:
…Alarms bells must be ringing all over Obamaland today. Unemployment on Election Day about where it is right now? Sputtering — if not stalling — economic growth? To many Americans that would sound like the car is back in the ditch — if it was ever out. Maybe Goldman is wrong, but economists across Wall Street have been growing more bearish.
And recall that back in August of 2009, the White House — after having a half year to view the economy and its $800 billion stimulus response — made an astoundingly optimistic (PDF) forecast. Starting in 2011, with Obamanomics fully in gear and the recession over, growth would take off. GDP would rise 4.3 percent in 2011, followed by … 4.3 percent growth in 2012 and 2013, too! And 2014? Another year of 4.0 percent growth. Off to the races, America…
Do take a look at that “astoundingly optimistic” White House forecast – as far as Obama and Co were concerned, the stimulus was going to get us rip roaring in to boom economic times. It is all there – carefully laid our projections about how wonderful things were going to be. I can only guess that they really believed it – after all, they were being rather arrogant in their assumptions of 2012 victory back there when questions first arose about the effects of the stimulus. Only people who really believed in it could have looked at the 2010 data and assumed that 2011 would have 4.3% GDP growth (if we’re lucky – very lucky – we’ll see official growth at 2.5% for the year 2011; which is not nearly enough to get things rolling). The big question: do they still believe it?
As Pethokoukis notes at the end of his article, there is still a very short time left for Obama to change course and have a chance at a reasonably good economy for election day, 2012. But I mean he’d really have to move fast – in the next few weeks we’d have to see serious proposals to cut the tax and regulatory burden on wealth creation for it to have a noticeable positive effect by election day. Wait until the end of August and it will be too late – the good news would start to roll in around January of 2013, just as we’re swearing in President Bachmann. But if they are still retaining their faith in the stimulus, then they’ll do nothing and just cross there fingers that some how, some way, what has thus-far failed will start to work in an astounding manner over the next 15 months.
And if that is the case, then the good news is that Obama won’t be re-elected – the bad news is that the economy will be very much worse before we get rid of him.