Economy Alarm: Incomes Fall 3.2 Percent Under Obama’s Watch

April 13, 2010

Incomes Fall 3.2 Percent Under Obama’s Watch

Economic Recovery Continues to Stall Thanks to WH and Congress that Spends Too Much, Taxes Too Much, and Borrows Too Much

Obama Claimed Middle-Class Incomes Would Go Up by $3,000 Under the Recovery Act

“In a September speech, he said: ‘All in all, many middle-class families will see their incomes go up by about $3,000 because of the Recovery Act.’” (Joseph Curl, “Income falls 3.2% during Obama’s term,” Washington Times, 4/13/2010)

Credibility Crash: Incomes Take a 3.2 Percent Hit Under Obama Presidency

Real personal income for Americans – excluding government payouts such as Social Security – has fallen by 3.2 percent since President Obama took office in January 2009, according to the Commerce Department’s Bureau of Economic Analysis.

For comparison, real personal income during the first 15 months in office for President George W. Bush, who inherited a milder recession from his predecessor, dropped 0.4 percent. Income excluding government payouts increased 12.7 percent during Mr. Bush’s eight years in office.

“This is hardly surprising,” said Douglas Holtz-Eakin, an economist and former director of the nonpartisan Congressional Budget Office. “Under President Obama, only federal spending is going up; jobs, business startups, and incomes are all down. It is proof that the government can’t spend its way to prosperity.”

According to the bureau’s statistics, per capita income dropped during 2009 in 47 states, with only modest gains in the other states, West Virginia, Maine and Maryland. But most of those increases were attributed to rising income from the government, such as Medicare and unemployment benefits.

Two of the most populous states in the country reported dramatic declines: Per capita income in California dropped 3.5 percent to $42,325; in New York, the drop was 3.8 percent to $46,957.

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The White House did not respond to requests for comments on the numbers.

Personal income with government “transfers” – which include such federal money as Social Security, unemployment insurance, Medicare and food stamps – has grown during Mr. Obama’s time in office, up 1.2 percent from January 2009 to February 2010. During that period, government unemployment insurance benefits rose from $88 billion to $143 billion.

Despite a near doubling in unemployment payouts, Mr. Obama in February announced a multitrillion-dollar spending plan that boosted the federal deficit to a record-breaking $1.56 trillion.

“While the market income of Americans has fallen since early 2008, government assistance has offset this somewhat through greater transfer spending such as unemployment benefits and new tax credits such as the ‘making work pay credit,’ albeit at the expense of higher deficits,” said Gerald Prante, a senior economist at the Tax Foundation organization.

Mr. Obama, who just finished pushing a $1 trillion health care reform bill through Congress, is falling behind on his predictions. (Joseph Curl, “Income falls 3.2% during Obama’s term,” Washington Times, 4/13/2010)

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