The Chart That Explains Everything

The fact that Obama's economics team, led by Lawrence Summers, was trying to lift the economy out of recession without creating conditions for a strong recovery was evident from the very beginning. We know now that chief White House economist Christy Romer wanted a much bigger fiscal stimulus package than the $800 bil that was eventually approved. Here's the story from the New Republic:

"Romer calculated that it would take an eye-popping $1.7-to-$1.8 trillion to fill the entire hole in the economy -- the 'output gap,' in economist-speak. 'An ambitious goal would be to eliminate the output gap by 2011 -- Q1 [the first quarter of 2011], returning the economy to full employment by that date,' she wrote. 'To achieve that magnitude of effective stimulus using a feasible combination of spending, taxes and transfers to states and localities would require package costing about $1.8 trillion over two years.'"
(EXCLUSIVE: The Memo that Larry Summers Didn't Want Obama to See, New Republic)

Regrettably, Romer's recommendations "never made it into the memo the president saw." Obama was not given the option of providing the stimulus the economy needed for a strong recovery because Summers didn't want a strong recovery. Summers wanted the economy to sputter-along at an abysmal 2 percent GDP like it is today. That would keep a lid on inflation and allow the Fed to pump as much money into the financial markets as it pleased.

Obama has played a big role in this austerity fiasco too. For example, did you know that more government workers lost their jobs under Obama than any other president in history?

It's true. Since Obama took office in 2008, nearly 500,000 public sector workers have gotten their pink slips. According to economist Joseph Stiglitz, if the economy had experienced a normal expansion, "there would have two million more."

Of course, Obama never made any attempt to rehire these workers because rehiring them would have put more money in the pockets of people who would spend it which would boost GDP. Typically, economists think that's a good thing. It's only a bad thing when the Fed is working at cross-purposes and trying to keep a damper on inflation so it can bail out its crooked Wall Street buddies.

For more on Obama's belt-tightening crusade, just look at his efforts to cut the budget deficits. Here's a clip from MSNBC:

"'Strong growth in individual tax collection drove the U.S. budget deficit to a fresh Obama-era low in fiscal 2015, the Treasury Department said Thursday.' The deficit is the smallest of Barack Obama's presidency and the lowest since 2007 in both dollar terms and as a percentage of gross domestic product. (During) the Obama era, the deficit has shrunk by $1 trillion. That's 'trillion,' with a 't.'" (MSNBC)

Why would Obama want to cut government spending when the economy was already in distress, capital investment was flagging, and households were still trying to pay down their debts?

Basic economic theory suggests that when private sector can't spend, then the government must spend to offset deflationary pressures and prevent a major slump. Cutting the deficits removes vital fiscal stimulus from the economy. It's like applying leeches to a patient with flu symptoms thinking that the blood-loss will hasten his recovery. It's madness, and yet this is what Obama and the Congress have been doing for the last six years. They've kept their hands wrapped firmly around the economy's neck trying to make sure the patient stays in a permanent state of narcosis.

That's the goal, to suffocate the economy in order to reward the thieving vipers on Wall Street. And Obama and the Congress are every bit as guilty as the Fed.