January employment numbers point to higher GDP growth this year
The US economy added a very impressive 225,000 jobs in January 2020. This figure far exceeded expectations and points to a strong start for 2020. While the consensus view of economists is that the economy will slow down this year, after finishing 2019 at 2.3% GDP growth, recent events indicate that GDP growth could top 3% this year, something not seen since 2005.
After the recession of 2008/2009, the prior administration failed to set economic growth as the primary policy goal. Instead, Obama concentrated on curing perceived injustices, which placed burdens on economic growth. Instead of the economy rebounding sharply in 2010 and beyond, growth was tepid.
From 2010 to 2013 economic growth averaged about 2%, even with the massive increases in the money supply, known as quantitative easing and with massive increases in government spending. Never in history has both Monetary and Fiscal Policy been so expansive. Yet the economy didn’t increase growth significantly. Why?
Causes behind Obama Administration Slow Growth
The reason for the slow growth was the Obama administration’s curing perceived injustices policy. For instance, Obama believed that it was an injustice that all Americans did not have health care coverage. He passed the Affordable Care Act (ACA) which increased the percentage of Americans with health insurance from 85% to 91%. The ACA helped 6% of the population, which is about 20 million Americans.
Because the ACA required employers to provide health insurance for all employees or pay a $3,000 fine, the cost of labor to business increased. Additionally, the ACA had 21 tax increases on the middle class. These actions slow economic growth.
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Obama also increased federal government regulations. There were nearly 4000 new EPA regulations alone and thousands more regulations in Obama’s last year in office. These regulations tend to slow economic growth.
Obama also created huge deficits in the government budget by the massively increasing government spending. In 2008 prior to Obama’s election, the annual deficit was $455 billion. In 2009, Obama’s first year…