By Tom Quiner
Two economies compete with each other: the public economy and the private economy.
The public economy doesn’t produce anything. It relies on the private economy for its existence.
Prior to 2008, the intent of the public economy was to support the private economy by building roads, providing for the common defense, and maintaining a reasonable safety net.
Since the election of Barack Obama, the roles have been reversed. President Obama sees the role of the private economy to support the public economy. To that aim, he has dramatically expanded government spending (with the active participation of the Pelosi Congress during his first two years in office).
They passed a mammoth stimulus bill. The purpose was to create jobs and raise middle class incomes. In other words, it was supposed to stimulate the economy.
The foundational principle is that government spending is an “investment” that somehow produces wealth by seizing productivity from top producers and redistributing it to public union employees and the less productive.
How has it worked?
A report was released last fall by Sentier Research. They found that the expansion of the public economy has not helped us regular folks after all.
Inflation-adjusted median household incomes fell by 2.6% during the Great Recession.
Obamanomics, which added $5 trillion to our deficits in the name of stimulating our paychecks, has had the exact opposite effect.
Since the recession ended in mid 2009, instead of helping us, it hurt us. Inflation-adjusted median household incomes fell another 4.8%.
The president says the problem is that the public economy is still not spending enough and that taxes are still too low.
President Clinton presided over an era of relatively frugal spending by the public economy, and the economy soared, refuting the premise of Obamanomics.
The evidence is clear: Obamanomics hurts working class families.