This article originally appeared on Fox Business on May 7, 2020.
The coronavirus pandemic is a humanitarian and an economic tragedy. It is causing a devastating loss of life, unprecedented economic destruction and widespread misery. Yet, presumptive Democratic presidential nominee Joe Biden recently described it as “an incredible opportunity to …fundamentally transform the country.”
Biden is not alone in seeing this pandemic as an opportunity to enact a leftist political agenda. As President Trump fights to save lives and return the nation to prosperity, numerous Democrats have expressed similarly cynical sentiments. With their political instincts telling them not to let this pandemic go to waste, it’s worth considering what happened the last time Democrats attempted to take advantage of a crisis.
As economist Milton Friedman first pointed out in the 1960s, the deeper the recession, the stronger and more rapid the comeback. There is no doubt that the Obama administration anticipated such an economic surge following the Great Recession.
Shortly after his election, Obama’s economic advisers projected that if Congress passed their $800 billion stimulus bill, unemployment would stay below 8 percent. Democrats passed it in February of 2009. The unemployment rate immediately shot above 8 percent and remained there for the next 43 months.
In August of 2009 the Obama White House forecast that GDP would grow between 3.2 percent and 4.3 percent for 2010-16. Actual growth never hit 3 percent. In 2016, Obama’s last year in office, GDP grew 1.6 percent.
The anticipated decline in unemployment and surge in economic growth failed to occur because Obama took advantage of a crisis to expand government and regulate – rather than grow – the private sector.
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