The Economy in Obama’s Speech

The president opened his speech last night by talking about the economy. He noted that back in January the economy was pretty dismal, and with a nod to those among the 9.7% still unemployed, announced “We have pulled this economy back from the brink.” It is a little odd that when talking about the economy negatively the blame is laid on Bush alone, but the president is perfectly willing to take credit for a recovering economy. It’s classic politics, the old games the president promised he was going to change. And it is still unclear how the president’s policies have saved the economy, since only $98 billion of the Stimulus money has been distributed, and only $62.5 billion of the tax cut money is available. (Not that I think if all of the money had been spent we’d be doing better, it might be worse, but since the president sold the Stimulus as do or die it seems that should be his standard at least.)

Nevertheless, I agree with the president that the job situation is looking better and better, I just think its because recessions generally get worked out over time as the market does its thing. What is unknown at this point is how much longer the economy will struggle because of government action, or if the current policies of the Bush and Obama administrations are going to cause future economic problems due to massive debts and moral hazard.

The president also said “our health care problem is our deficit problem” because the rising costs of health care are putting pressue on medicare and medicaid. That deserves the treatment of a separate blog post, so more on that later.