By John Ubaldi
Contributor, In Homeland Security
With the presidential election of 2016, the economy again is the most important issue for most Americans. While the presidential candidates from both parties talk about the economy, they fail to provide details on how their policies would jump-start the listless U.S. economy.
Often, the presidential candidates speak only to their fan base with catchy campaign phases, such as “Make America Great Again,” “A Future to Believe In,” or “Hillary for America.” These slogans sound great on the campaign trail, but what do they actually mean?
The 2016 campaign for president has confounded every political pundit. No one envisioned that Donald Trump would capture the Republican nomination for president. No one thought that 74-year-old socialist Bernie Sanders would challenge front-runner Hillary Clinton for the Democratic nomination.
Whether the American people stand on the left or the right, they are frustrated by the lack of progress in Washington. Americans feel that the political system is corrupt and favors the power elite. Can you blame them?
US Economy Sputters for Several Years
Since the economic crisis of 2008-2009, Americans have dealt with a stagnant economy. Even though the recession officially ended in June 2009, the recovery has been weak following a severe downturn.
Last month, Market Watch reported that the U.S. economy slowed to a meager 0.5% growth rate for the first quarter of 2016, the slowest pace in almost two years. The economy hasn’t seen the Gross Domestic Product (GDP) over 3%, a meager number, since 2005.
The Bureau of Labor Statistics reported that the nation’s unemployment rate stayed steady at 5.0%. Only 160,000 new jobs were created, far below what many economists predicted.
The report also showed that the labor force participation rate decreased to 62.8%. The employment-population ratio edged down to 59.7%, with over 300,000 people dropping completely out of the labor force.
Obama Weighs In on His Economic Legacy
In Andrew Ross Sorkin’s April 2016 New York Times article, “President Obama Weighs His Economic Legacy,” President Obama says, “I actually compare our economic performance to how, historically, countries that have wrenching financial crises perform. By that measure, we probably managed this better than any large economy on Earth in modern history.”
The president often compares where the economy was after his election to where we are now. However, most Americans still feel left behind.
Household income is down $4,000 from where it was when Obama first took office and income inequality increased substantially. The only group who has made substantial gains is the top 1 percent of American households.
This feeling of helplessness by Americans over the future of the U.S. economy has fueled the rise of Donald Trump on the Republican side, and the surge of support for Bernie Sanders on the Democratic side.
The huge angst by the American people over the fate of the U.S. economy leaves many to feel that U.S. economic gains bypassed them. This feeling has led political candidates to make elaborate economic pronouncements during their campaigns, devoid of how their hype will play out in the real world.
How Presidential Candidates Address US Economic Problems
On his website, Bernie Sanders says, “The American people must make a fundamental decision. Do we continue the 40-year decline of our middle class and the growing gap between the very rich and everyone else, or do we fight for a progressive economic agenda that creates jobs, raises wages, protects the environment and provides health care for all?
Are we prepared to take on the enormous economic and political power of the billionaire class, or do we continue to slide into economic and political oligarchy? These are the most important questions of our time, and how we answer them will determine the future of our country.”
He proposes a massive expansion of the federal government and close to $18 billion in new spending over a 10-year period. How would the economy react to this vast expanse of federal power and a huge tax increase? How would businesses react as they currently have $3 trillion parked in overseas banks to avoid heavy taxes?
Hillary Clinton proposes much the same as Sanders with her economic policies, but she fails to address the issues facing businesses in America. These issues include a burdensome regulatory environment, a Byzantine tax code that punishes small businesses and the difficulty of complying with mandates from the Affordable Care Act. These issues are only a few of the challenges businesses face in the U.S.
Even the bombastic Donald Trump consistently issues the moniker of “Make America Great Again.” He is all over the map in regard to taxes, trade and other economic issues. No one knows how he would shepherd the economy through the economic challenges ahead.
No matter what each of the presidential candidates state on the campaign trail, how would any of them get an agenda through Congress? Over 60% of the American people despise the top two candidates from each party, Trump and Clinton.
Also, Trump and Clinton are not well liked by many people in their own party. This dislike will make it extremely difficult for either Trump or Clinton to govern a country.
Whoever assumes the presidency in January 2017 will face daunting economic challenges. We better ask all the presidential candidates the tough questions now or we will forever regret not doing so.