Anymore, its as if both the hard core conservative Republicans / Tea Partiers and the hardcore liberal Dems are just all living in some alternate universe or something. Both sides totally divorced from reality.
First off, the fact is, this is not the Bush Recession or the Obama Recession, it is the Bush / Obama recession. To hear the Republicans talk, the economy was doing just fine until January, 2009 when Obama took office.
This is a graph of private sector job losses, the bars in Red represent job losses during the Bush Administration, the bars in Blue represent job losses during the Obama Administration:
Notice something? Yeah, we had heavy job losses under Bush and under Obama's first year in office. When we look at quarter to quarter GDP, we see a very similar story:
In fact, the Bush Administration is the only administration since Hoover that left office with a net loss of jobs. Even the Carter economy kicked the Bush economy's ass. The last really good economy we have enjoyed in this country was under Clinton. The revisionist Republicans just want everyone to forget that the last time they had control of the country, they ran the economy into the ground. In fact, the two worst economic downturns this country has gone through in the last 100 years both began under Republican Administrations.
That said, the economy today is Obama's and thus far, his administration has done a pretty crappy job of stewarding it. We wasted over a year on healthcare reform (as Bachmann would say, "he blew his wad on it"), all the while the economy was stalled at best. Now it looks like we are going to piss away this year arguing over deficits, when the problem is jobs. The quickest way to reduce the deficit is to get people back to work. Its not "socialism" that is killing us right now, its 3 wars and millions drawing unemployment benefits rather than working and paying taxes.
Unemployment Benefits Add to Deficit - Real Time Economics - WSJ
Sure, Medicare is going to be a big problem in the decades to come, but right now, the biggest driver behind our current deficits are the wars we are in (rampant defense outlays) and the unemployed (Unemployment benefits, Medicaid, SCHIP and so on). The biggest drag on hiring is not uncertainty about government policies, its uncertainty about demand. After all, federal taxes are the lowest they have been in 60 years.
By one measure, federal taxes lowest since 1950 - USATODAY.com
Moreover, if your not making money, your not paying corporate income or personal income taxes. The problem is that business have a huge demand uncertainty. Consumer spending has not rebounded and consumer confidence is down. The reason for that is the huge amount of personal debt many Americans have. When your house is worth less than you owe on it, and you have a mountain of student loan and other debts, your not so apt to go out and buy that second flat screen or the new car. Thus, businesses are not so apt to hire more people when they are not sure they will be selling more sh*t. I mean come on, this is not rocket science. In many ways the best thing that could happen to the economy right now would be to have higher inflation as that would deflate those debts. Which by the way is why the federal reserve was so concerned about deflation. Had we entered into a deflationary spiral, those overbearing debts would have only become that much more overbearing.
I don't know what the answer is at this point. I suspect we will just have to ride it out until finally the economy really starts to grow again. I will say that if things don't improve in a hurry, Obama will almost certainly be a one term president unless the Republican's seize defeat from the jaws of victory by nominating some nutter like Bachmann instead of Romney or Huntsman. I certainly won't vote for Obama in 2012 if unemployment is still over 9%.