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Barack Obama took an economy that was in free fall and turned it around
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When he took office the economy was contracting at a rate well over $1 Trillion per year (8.9%)
4 million jobs had been lost under Bush before Obama even took office
The economy was losing 750,000 jobs a month at the beginning of the Obama administration
Before Obama was even inaugurated, the Congressional Budget Office predicted a deficit of over $1 Trillion
Obama’s quick action reversed the decline and returned the economy to growth. This reversal was not just a
natural economic cycle — it was due to specific actions of his administration.
 Passed the stimulus one month after inauguration
o The stimulus created or saved up to 3.7 million jobs
o It increased the GDP by as much as 3.1%
 Negotiated the auto bailout and restructuring in the first few months of his presidency
o Returned GM and Chrysler to profitability
o Saved 1-3 million jobs in the auto supply chain
 Administered the bank bailouts implemented by Bush in order to calm markets and ease the credit crisis
More Still Needs to Be Done
The President’s proposed Jobs Bill would have further stimulated the economy without adding to the deficit, but
Republican obstructionism has prevented its passage.
Causes of Economic Downturn and Need for Reform
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Roughly half of the US banking system is virtually unregulated, and excesses in that system led to a catastrophic
financial meltdown, wiping out tens of trillions of dollars in wealth.
o $6.5 Trillion in home equity wealth destroyed
o $6.9 Trillion on the stock market just in 2008
o Americans lost an estimate quarter of their collective net worth
Financial innovations such as Collateralized Debt Obligations and Credit Default Swaps (“financial weapons of
mass destruction”), combined with fantasy ratings by credit agencies, helped create the illusion that subprime
mortgages were a safe, high-return investment.
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The huge appetite for subprime mortgages in the investment banking industry, combined with the dramatic
weakening of underwriting standards in the lending industry under the Bush administration, allowed
Depository banks, which are heavily regulated, did not suffer anything like the losses of the investment banks
during the crisis.
The Dodd-Frank financial reform bill is a good start, but Obama needs a mandate to pass further reform
No, It Wasn’t Fannie Mae and Freddie Mac
 More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
 Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted
by conservative critics.
The Deficit: Stimulus v. Bush Tax Cuts
The stimulus increased the deficit for 3 years, but its long-term effect on the deficit is miniscule. The biggest single
contributor to the deficit going forward is the Bush tax cuts and the two unfunded wars:
The Bush tax cuts and unfunded wars will
cause half the deficit going forward.
The ongoing cost of the stimulus will be very
small.
Fighting the Deficit Should Include Allowing Bush Tax Cuts to Expire for the Rich
Returning tax rates on the top 2% of households to the levels of the 1990s is fair and appropriate because they have
gained their wealth by capitalizing on tax-payer funded research and development. In addition to the roads, police,
educated workforce and other benefits provided by taxes, the inventions listed below were all pioneered by government
supported research. Where would the “job creators” be without these:
The transistor (basis of the modern computer chip)
Semiconductors
The concepts of operating systems and programming
language, and creating several of the most important ones
— Unix (the basis of Linux and Mac OS X), C, C++
Word Processors (ARPA’s Project MAC at MIT in the ‘60s)
Spreadsheets (ARPA’s Project MAC at MIT in the ‘60s)
The Internet and company intranets
Computer graphics
Computer Aided Design (CAD) – used in all modern
manufacturing and design
Databases
Virtual reality software and hardware