Despite stimulus, middle class still struggles

February 17, 2014

Five years ago Monday, President Barack Obama signed the signature economic proposal of his presidency, saying that the passage of the $787 billion economic stimulus package heralded the “the beginning of the end” of the Great Recession.

The president told a Denver audience that he was “keeping the American Dream alive in our time.” But for millions of Americans, he made things worse.

It is now clear that bold White House predictions about stimulus jobs “saved and created” were just a prelude to later pledges about keeping your doctors and falling premiums.

Equally maddening has been the president’s unwavering belief that an economic recovery could be engineered by Washington’s central planners. It’s as if he isn’t aware of the cynicism engendered by a stimulus bill that seemed to have been designed not so much on the basis of real need or an empirical study of what would actually help people get back on their feet, but on ideology and political connections.

From the tens of billions that have been poured into green energy to an executive order that basically excludes non-unionized workers from major construction projects, for many Americans the stimulus looked more like political payback than a jobs bill — all compliments of the taxpayer.

Meanwhile, middle class incomes have continued to shrink, making it even harder for millions in the middle class to keep up with bills. The cost of college tuition and healthcare are rising faster than inflation, and millions of Americans have received cancellation notices from their health insurers. Countless others now live with the worry that their new plan may not cover the doctors they know and trust.

No wonder so many people now feel as if no one in Washington is looking out for them.

The real tragedy here is that none of this was necessary. Republicans have always been willing to work with the president on reforms that would have broad bipartisan support, and, we believe, a far better impact on the lives and livelihoods of ordinary Americans. Things like paring back regulations, tapping into vast domestic energy resources through projects like the Keystone XL pipeline, and putting the nation’s finances on a more solid footing, just to name a few.

To some, it may seem like the two parties in Washington are locked in some never-ending debate about the real unemployment rate versus the official unemployment rate, about whether to raise the minimum wage or extend emergency unemployment insurance one more time, or when exactly the debt limit will be breached. In recent days, we have even debated whether fewer people holding down a job as a result of Obamacare is a good or a bad thing.

But to focus on the day-to-day debates is to miss a larger point. It’s to forget that the record expansion of all these government programs is proof that more Americans are in need of help today than they were in 2009; that the president’s policies have failed the very people they were intended to help. If the stimulus had been the great success its supporters predicted, we would not be having these debates.

It’s that simple.

Far from establishing the firm foundation and middle-class renewal that the president promised, nearly seven out of 10 Americans now think the country is worse off than it was when the stimulus was signed. The labor participation rate is at its lowest level since the Carter era, and confidence in government has been dropping like a stone.

If the goal was to make things better, a clear majority of Americans would say it didn’t.

An even sharper verdict comes from the nine out of 10 Americans who say the president should make a “top priority” of creating jobs this year. Such overwhelming majorities wouldn’t feel that way if the stimulus had led to the kind of “long-term growth and prosperity” that the president initially envisioned.

Five years later, the stimulus is no success to celebrate. It is a tragedy to lament.


PHOTO (TOP): President Barack Obama says he has to use 10 pens as he signs the American Recovery and Reinvestment Plan as Vice President Joe Biden (L) looks on at the Denver Museum of Nature and Science in Denver, February 17, 2009. REUTERS/Rick Wilking

PHOTO (INSERT 1): People attend the Zetabid foreclosed home auction at the Arizona Biltmore Resort and Spa in Phoenix, February 21, 2009. REUTERS/Joshua Lott

PHOTO (INSERT 2): Signature of President Barack Obama on the American Recovery and Reinvestment Act Bill at the Denver Museum of Nature and Science, February 17, 2009. REUTERS/Larry Downing


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First you, your republican party, and conservatives have done the most to impede job creation, move this economy forward at a greater rate, and continue to build a better civilization.

Only to the President’s credit have we had the job growth, economic improvement, and the improvement in civilization we have.

Without you we are pushing forward so that all share in prosperity.

America is against crony capitalism and a plutocracy.

Look at your policies:

Lower taxes create jobs.

Since the Eisenhower administration when the progressive tax rate for the wealthy was over 90% we have had several tax reductions in the name of job creation. It never happened. You would think by now we would have 0% unemployment. The only thing we have don is destroy our tax base and go into debt.

War spurs the economy.

We have had several wars now. Boy, that Iraq war was a duzy. We lost those wars because we did what the enemy wanted, we drew down our national wealth. If we had paid for our wars we might have been wiser going to war, and we would not be in debt.

Low taxes and deregulation are good for capitalism.

Wow, those people in Charleston WV were so desperate for jobs. They kept their taxes very low and they despised the EPA. They loved their coal and were so proud to be known as “chemical ally.” Well, they do not have to worry about jobs now because those who can afford to move are doing so. Until the companies move themselves. This is occurring now in the Dan River of NC, it has and will continue through out the US.

You have incurred abuses in raising the debt limit.

You have abused the filibuster.

You no longer support working families (family leave acts), personal responsibility (ACA), individualism (ACA again), self determination (LGBT), true capitalism (allowing companies to fail), personal dignity ( allowing companies to factor in welfare benefits to provide lower pay).

You, your party, and conservatives have no empathy to lead this nation, other than to plutocrats.

Posted by Flash1022 | Report as abusive

Mitch, the only ” Middle Class” (sort of) that is still around are the Union voting blocs. You must be referring to them because their Lobbies take care of the “Inside the Beltway” gang. The other “Middle class” can’t buy Medical insurance or new cars anymore…and they do not have a Lobby.
So, you probably don’t realize they exist.

Posted by rikfre | Report as abusive

That’s the plan. Bind, deceive and obligate.

Posted by hatecyberspace | Report as abusive

As an entrepreneur, I have not seen one penny of this money. None whatsoever.

Posted by TSIndiana | Report as abusive

Guess McConnell would rather return us to Bush’s 2008: GDP growth at -8.2%; Losing 500,000 jobs per month. All those things that Bush’s slashing of taxes was supposed to prevent. Trickle down does not work. Didn’t work under Reagan, didn’t work under Bush, will not work in the future. McConnell can’t be that dumb.

Posted by AlkalineState | Report as abusive

because it jobs WAS to pay back people who vote for democrats and t pay them back for the money they spent to get berry elected. Than it was also future payment to keep them happy and voting democrat

Posted by gwhh | Report as abusive

It is your fault Mitch!

Posted by GBreeswine | Report as abusive

Since the stimulus was only meant for the unions to pay them back for support, the middle class didn’t benefit.

Posted by jschmidt2 | Report as abusive

With over a trillion dollars wasted on wars that didn’t work, on top of slashed tax revenues and increased spending (think Department of Homeland Security, Medicare drug benefit)…. Bush was sinking the country.

Next president comes along and starts to bail it out. Then comes Mitch in the middle of it and says….. “If your work is paying off, then why is there still some water right there in that part of the boat?”

Get to work, Mitchell. You turtle.

Posted by AlkalineState | Report as abusive

Political advertisements Reuters? Really? Are you that desperate or did they pay a fortune for it?

Posted by tmc | Report as abusive

I was unaware that Fox owned a stake in Reuters. Seriously though, I came here to get out of Conservative/Liberal media spin cycle annnd yeah, I think we’re done here.

Posted by ThaGerm | Report as abusive

McConnell knows full well why the middle class is struggling. He was not a member of the Gang of Traitors(*) who met on January 20, 2009 and plotted to sabotage and undermine U.S. Economy during President Obama’s Presidency, but through his actions he has demonstrated his support of these individuals and their goals regardless of the cost to the nation. He has no credibility.

*Frank Luntz, Rep. Paul Ryan (R-WI), Rep. Eric Cantor (R-VA), Rep. Kevin McCarthy (R-CA), Rep. Pete Sessions (R-TX), Rep. Jeb Hensarling (R-TX), Rep. Pete Hoekstra (R-MI)
Rep. Dan Lungren (R-CA), Sen. Jim DeMint (SC-R), Sen. Jon Kyl (AZ-R), Sen. Tom Coburn (OK-R), Sen. John Ensign (NV-R), Sen. Bob Corker (TN-R), and Newt Gingrich

Posted by Midlothian | Report as abusive

“tapping into vast domestic energy resources through projects like the Keystone XL pipeline.” I find it hard to believe that anyone still believes that the Keystone XL pipeline has anything at all to do with “domestic energy resources” unless they are advocating the annexation of Canada. The pipeline will move Canadian product through the US to be sold and shipped to other foreign countries. We just get to take the risk and extract a small amount of money for letting Canada transport volatile chemicals through our farmland and over a huge aquifer. Yeah, that sounds like a good plan (not).

Posted by mmmSquirrels | Report as abusive

While I am not a McConnell fan, those of you criticizing him fail to acknowledge that the labor participation rate is still 2.5% below when Obama took office. And, it is almost 4% below the Bush peak years.

If the stimulus was to preserve the middle class, it has failed while saddling us with more debt.

You can argue that the wars were misguided, but the deficit is still well above that of the Bush years. When the Dems were chastising (including our POTUS) Bush for adding $4 Trillion to the deficit, they then proceeded to double-down by picking the winners and losers–only to learn that a lawyer of any stripe is INCAPABLE of picking economic winners, and qualifying shovel-ready projects.

Those who keep looking to Washington to address their needs only need to look at Indian Reservations to see what government dependency breeds. Keep drinking the kool-aid! (while enduring double-digit unemployment rates among young people, “comprehensive” legislation of any type, that student loan you cannot pay off, and increased debt,).

Posted by COindependent | Report as abusive

If you’re not stupid, why do you cripple your own country?
(To prevent misunderstandings. This is a rethoric question and I do not request an answer.)

Posted by seafloor | Report as abusive

Unions are the middle class.

Below the unions are the working poor, and above unions are the executives who have taken all the productivity increases.

Yes the labor participation rate is lower under President Obama because he has shrunk government.

It is private sector jobs that have grown substantially, and civil service jobs have declined.

Are we to put our faith in republicans who believe in free speech, and are willing to destroy this nation because they are not pleased with its progressive nature?

Posted by Flash1022 | Report as abusive

@Flash Come Again? “the labor participation rate is lower…because he has shrunk government”. Really….

The economy needs to add 150,000 new jobs every month just to absorb newcomers to the labor force. That’s a minimum of 1.8 MM jobs every year. If you want to create jobs at that rate, the economy has to grow in excess of 3.25% annually. While the fed can print money to create civil service jobs, states and local government cannot. (And, you only have to look at the 10 richest counties in the country to see that the federal government (in the DC area) and the jobs it funds is out of alignment with the rest of the country.)

Now look at the GDP growth rate for the past five years and you will see we have not averaged half of that growth rate. All the while tax revenues, as a percentage of GDP, are above the historic average.

If you want MORE jobs, and MORE tax revenues, then grow GDP. It’s all there in the government’s numbers.

Posted by COindependent | Report as abusive

Recipe for GDP growth: 20% tariff on imported manufactured goods. That’s what America was built on, and there was no reason to stop.

Since the 1970’s, we have let our tariffs slip to around 2% (at the urging of international business groups who have bribed their way into free access to our markets). Well, unless you’re Mitt Romney…. this scheme is not working.

Posted by AlkalineState | Report as abusive

Mitch is correct that there is a problem. But the solution is not to change the leader – it is to change the system. The Republicans are just as content as the Dems to continue living in a 0.1%, lobby-friendly, pork belly same as before economy. America is no longer a democracy but rather a coporatocracy (if that is a rea word). Fix the system Mitch.

Posted by BidnisMan | Report as abusive

“The single most important thing we want to achieve is for President Obama to be a one-term president.” Mitch McConnell 2010

And the Republicans had NOTHING else beyond that.

Posted by SunnyDaySam | Report as abusive

“The single most important thing we want to achieve is for President Obama to be a one-term president.” Mitch McConnell 2010

Why weren’t JOBS the ‘most important thing’ the Republicans wanted to achieve? They did nothing but obstruct. Not one constructive thing from McConnell’s GOP.

Posted by SunnyDaySam | Report as abusive

Corporatocracy; That’s great @BidnisMan! It’s the truth and should be a word. Also part of a campaign slogan.

Posted by tmc | Report as abusive

“The single most important thing we want to achieve is for President Obama to be a one-term president.” -Mitch McConnell, 2010.

Fail. What else you got? Birth certificate detective commission? Perpetual Benghazi truth hearings? A Pentagon earmark to defend America against the War on Christmas? Keep at it, Mitch. I am sure a nice policy is bound to come along for you guys.

Posted by AlkalineState | Report as abusive

Look at the headline….despite stimulus middle class still struggles. That says volumes about what many consider a fundamental flaw in the way we view our economy.

Debt, even with historically low interest rates pulls consumption forward at the expense of future prosperity. Certain debt is unavoidable, most cannot afford cash for a home. Aside from principle residence debt, I believe that debt is destructive and in the long run causes economic hardship for individuals, for families and for nations. I’ve lived by the principles I’ve stated here and am doing quite well in spite of all the economic problems and hardships we face.

When you hear economists talk about deleveraging, what they are actually saying is that the consumer is pretty much broke.

The frightening aspect of stimulus, to me, is that the economy is struggling in spite of it. In anything close to a healthy economy inflation should be raging and the economy booming. It’s not because balance sheets for real people are generally frighteningly out of balance.

Posted by Missinginaction | Report as abusive

“The single most important thing we want to achieve is for President Obama to be a one-term president.” -Mitch McConnell, 2010.

What was their slogan, “One and Done”? McConnell/Republicans failed. They couldn’t accomplish that, so they decided to become obstructionists instead and were only marginally competent at that, but they did their damage to the American people. I won’t forget it. Ever.

Posted by JL4 | Report as abusive

Repeating that “we are worse off” over and over doesn’t change the math McFail. The only problems with the stimulus were that it was too small and you and your fellow obstructionists failed to produce any kind of fiscal policy follow up.

Your choice of party over country is an ethical failing.

Posted by brownland | Report as abusive

The only economic recovery that actually happened was in the banking industry. That’s as far as it went, and will go.

Posted by boon2247 | Report as abusive lsa/web/common/public/signup

Posted by catholic | Report as abusive

After spending 30 years in Washington, Mitch McConnell has come to represent everything that is wrong with our nation’s capital. His brand of partisan politics has fostered the obstruction and dysfunction that’s holding America back.

Senator McConnell has wasted decades blocking legislation that would have helped middle class families and small businesses. He even bragged that he was a “proud guardian of gridlock.”

Posted by catholic | Report as abusive