Can Obama Save the Economy?

This post was originally written shortly after Barack Obama took office. Some of the text is now dated.

Obama has got to pleased with the timing of his presidency. If he is in office when the economy finally recovers, he will receive credit and likely a second term. What makes this a great time for him is that he doesn’t have to actually save the economy to receive credit.

There is only so low that the economy can go. Unemployment will never reach 100% and we will never reach a point where nobody will have any money. The media may generate a sense of panic that pushes thing further than necessary, but the economy would eventually rebound without any intervention.

If the economy would rebound without Obama lifting a finger, why is he so obsessed with spending? This is actually for three reasons. The first is to keep our low point from being lower than it needs to be. The second is to accelerate the recovery. The problem with these two points is that there is no way to know how low we would go or how fast we would recover without Obama’s policies. The third reason is probably the biggest. His actions show the media that he is working on improving our situation. The more actions he takes for the economy, the more credit he will receive when the economy finally recovers.

With Obama writing blank checks, we really need to look at whether or not the short-term gains are worth the long-term harm. This money has to come from somewhere. There are really only two options that I can see. Either the taxpayers have to restore the trillions of dollars that he will cost us, or the government is going to make some more money... literally. Is the slim chance of accelerating economic recovery (there are even some arguments that his policies could slow down the recovery) worth decades (or centuries with how this country seems to work) of recovering from the recovery? No.

Either way, we are going to pay for Obama’s actions at some point down the road. I would be shocked if this hits in the next eight years, so Obama will be out of office by that time. Considering how the president is generally the face of our country, whoever is in office when we have to pay for Obama’s mistakes will likely receive the blame.

To make things worse, we will not be able to pay off this debt by the time the next recession hits. In a sense, this country has reached its credit limit. We will not be able to spend money like this during the next recession. This country will be financially crippled, and what should be our next recession could very well turn into a depression.

A lot of politicians are obsessed with power. With the economy becoming fragile, an opportunistic politician could use the economy to his or her advantage. Imagine a president leaving office when a member of the opposing party is about to enter. The president could sabotage the economy just to help out his or her political party. Since the damage would show up after the new president entered office, the new president and his or her party would receive the blame. I hope I’m not scaring readers too much. I’m not saying that anyone WILL sabotage the American economy. I’m saying that we can’t RULE OUT the possibility of a government-induced depression.

Let me summarize what I have been saying. Will Obama save the economy? Absolutely not. The economy will save itself. Will Obama be credited with saving the economy? Unless he finds a way to keep the recession going, this is a certainty.