EDITOR: I must answer my friend Greg Post’s response to my letter answering the question “Are we better off than four years ago?” In my original Letter to the Editor, I shared the evidence that demonstrated how my family was definitely better off. Greg responded with a lengthy letter addressing national issues. If you look to the big picture for the nation, the answer is that we are absolutely better off! I am an historian, so here is a history lesson about the last four years. I also have a degree in Economics from Stanford University and will use my expertise to point out how the indicators show how the economy is moving steadily toward recovery.
“Four years ago” would put us roughly at Sept. 1, 2008. George Bush was President. Between Sept. 1, 2008 and Jan. 7, the date of Obama’s inauguration, the following happened:
1. We had two wars still going full bore, and not too well at that. Both wars were “off budget” — that is on our credit card.
2. During September 2008, AIG, the world’s largest insurer, went under, as did Lehman Brothers, Bank of America, Merrill Lynch, Chase and a host of others were teetering on the edge of bankruptcy.
3. Stock prices were plunging, as were 401(k)s … (My retirement account was being devastated.)
4. The federal budget was snowed under by deficits caused by a Medicare prescription benefit of $800 billion (unfunded), two wars ($900 billion per year-unfunded) and a $3 trillion tax cut (unfunded).
5. On Sept. 25, 2008, Henry Paulsen, Bush’s Secretary of the Treasury, went to Congress and asked for a bank bailout. John McCain interrupted his campaign to lobby his colleagues to vote for the bailout. Every Republican, and a few Democrats voted against it.
6. Sept. 29, the stock market fell over 800 points! (My retirement account was cut in half … along with the accounts of many of my fellow Americans.)
7. Oct. 1 — Congressional Republicans come to their senses and vote for the bailout. Bush signs it into law and banks are loaned hundreds of billions — no strings attached, you may recall.
8. October and November — Banks hoard the Fed loans and refuse to loan to businesses. Without money, businesses lay people off, unemployment soars to 10 percent. Both my sons-in-law and grandson were laid off … for eventually two years.
9. Without liquidity and loans, the real estate market also tanks.
10. November and December — Things went from bad to worse.
Please note carefully — all the above events occurred under Bush (including everyone’s 401(k) going into the dumpster).
Feb. 2, 2009 — Obama takes office. He inherits the Bush budget until Oct. 1, 2009 (that’s how the federal budget works — every new president inherits his predecessor’s budget — and deficits).
The economy could have improved sooner and faster. Classic economic measures that have worked in the past have been blocked by the Republicans. For example, the Republicans blocked a larger stimulus package from being passed, which inhibited the recovery. Republicans blocked the legislation which would have provided employment for veterans returning home from the Middle East. While free enterprise jobs are on the rise, austerity measures at the state and local levels have led to the hundreds of thousands of public employees being added to the unemployment rolls, elevating the unemployment rate.
El Dorado County is a perfect example. Many government workers are now unemployed due to cuts in Placerville, El Dorado County and the state of California … and these workers have cut their own spending on “Main Street.” This has really damaged so many of our small businesses.
Increasing police and fire positions in El Dorado County would make us safer and stimulate our economy. This would be a classic Keynesian move that would stimulate the economy and bring in increased tax revenue that would help cut the deficit. Again, such efforts along these lines have been blocked by the Republicans. We are less safe and businesses are struggling as a result.
It is clear we do not have a full recovery for all, but we are headed in the right direction. All the economic trend lines are headed in the right direction toward a full recovery for the nation. Unemployment is steadily improving, manufacturing is up, we are becoming more energy independent than any time in recent history, and interest rates are at a record low, making capital available to businesses.
Small businesses can take advantage of many new tax reductions under the Obama administration. Sales of homes nationally are on the rise and property is beginning to appreciate again … meaning equity restoration is beginning for many families. Many families have refinanced their homes, cutting their housing costs. New government-sponsored loan modifications are starting to save families from foreclosures. Several free trade agreements have been successfully negotiated recently. Our economy is outperforming Europe! Capital from around the world is looking to the U.S. as a safe haven.
Thankfully, everyone in my family is back to work. My retirement account is back in good health … and I am enjoying retirement helping care for my grandchildren and doing local volunteer work. I see life improving for families around my neighborhood, our community and across the land. So many peoples’ prayers are being answered.
Are we better off now than four, or five, or six years ago? We sure are. God Bless America!