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GDP Figures under Obama Fail to Measure up to Reagan Era
Part of a series by Americans for Tax Reform Foundation
In the aftermath of a recession in the early 1980s, President Ronald Reagan presided over a robust recovery that restarted the engines of the nation’s economic growth. Productivity picked up rapidly as policies were put in place to boost output.
Under President Obama, the recovery from the latest recession has languished. Despite the efforts of the administration to solve the problem by throwing money at it in the form of the TARP (Troubled Asset Relief Program) bailout and $787 billion stimulus, the economy has grown at a remarkably slow rate given historical precedent.
The best indicator of output is real GDP, or Gross Domestic Product. It measures the total value of all goods and services produced within a nation in a given year. Measured quarterly and adjusted for inflation, it is among the most closely watched economic indicators.
Real GDP data from the recoveries of both Reagan and Obama demonstrate that the Reagan recovery was far stronger than the economic upturn under President Obama. In the first 11 quarters since the beginning of the recovery, from the first quarter of 1983 through the third quarter of 1985, real GDP growth averaged 6.08 percent. In contrast, President Obama’s recovery saw real GDP growth average only 2.4 percent over the first 11 quarters of the recovery, which began in the third quarter of 2009. As the graph makes clear, the economy grew at a faster clip under Reagan at every point in that recovery than it has while President Obama has been in office.
Examining real GDP data across the entirety of both presidencies hardly yields better results for President Obama. In the first 13 quarters of Reagan’s presidency, the economy grew at an average quarterly rate of 3 percent. Obama, however, presided over average quarterly growth of just 1.46 percent.
Perhaps the worst news is that output appears to be heading in the wrong direction. In the last five quarters, only one (fourth quarter of 2011) has seen even measly growth of two percent. Change in output in the first quarter of 2012 was revised down to 1.9 percent from an initial estimate of 2.2 percent. The current administration has some work to do before it can compare the recovery that has occurred on its watch with the one overseen by President Reagan.