Consider this article from the Wall Street Journal, which discusses the latest CBO (Congressional Budget Office) report.
Massive budget deficits:
One lesson is that the days of easy deficit reduction are over. The annual deficit in 2016 rose for the first time in three years—by $148 billion to $587 billion. That’s 3.2% of GDP, up sharply from 2.5% last year. Mr. Obama has been able to ride falling defense spending from reduced military deployments overseas, but Pentagon outlays were flat in 2016. Military spending will probably have to increase in future years, no matter who wins Tuesday, to meet the growing challenges from Russia, China and Iran.
Looming entitlement crisis:
Mr. Obama will also leave town having failed over eight years to do anything to slow the booming burden of Social Security, Medicare and Medicaid. Outlays for those three programs grew by $75 billion last year, or about 4.2%. They now account for 10% of the entire U.S. economy, the highest level ever, and rising.
More spending on welfare programs:
The President’s main contribution has been to put Medicaid on hyperspeed by expanding its coverage through ObamaCare. CBO’s budget gnomes report that Medicaid spending has climbed by nearly 40% in a mere three years—to $368 billion in 2016. That doesn’t include what the states are obliged to chip in.
Higher taxes and more regulations (e.g. – Dodd-Frank) killed economic growth:
Another lesson is that faster economic growth is essential to a healthier fisc. One reason for the deficit rebound in 2016 is that federal revenues increased by a mere $18 billion or less than 1%. Individual income-tax receipts were flat, while corporate income taxes fell by $44 billion or 13% as business profits sagged. This is what happens when the economy sputters at about a 1% growth rate for most of a year.
Growth that slow couldn’t keep up with spending that increased 4.5% or $166 billion in 2016. Federal outlays were 20.9% of the economy for the year, up from 20.4% in 2014. A Republican Congress has kept that figure down from the heights of the Obama-Nancy Pelosi stimulus, but it is now set to take off again as more Baby Boomers start collecting Social Security and Medicare. (Millennials, get ready to pay even higher taxes throughout your working life.)
Looming crisis caused by rising interest rates:
This era may be ending as a new President takes office. The Fed may raise rates in December, and bond yields have been rising. Outlays for net interest on the debt increased by $23 billion or 9% in 2016, largely due to faster inflation. But inflation is still tame. If it begins to rise, the debt-financing burden will explode with more than $14 trillion of Treasury debt outstanding, much of it short-term. In January CBO said that if interest rates are 100 basis points above their projections each year for the next decade, the Treasury will have to pay an average of more than $160 billion per year.
And it’s not just fiscal matters. Investors Business Daily adds to the list of problems that Obama will pass on to Trump.
Low wages, high unemployment:
Obama, like every Democrat running for office, claimed to be the champion of the middle class, and that instead of “trickle down” economics, he’d growth the economy from the “middle out.” Instead, middle class wages stagnated throughout Obama’s term in office, with real median household income today exactly where it was when Obama took office.
And despite Obama’s constant bragging about the “longest” stretch of private sector job growth, the 15.5 million private sector jobs added since February 2010 hasn’t even kept pace with population growth — which climbed 17.5 million over that time. As a result, more than 14 million people have dropped out of the labor force since Obama took office. In fact, without the huge decline in labor force participation under Obama, the unemployment rate would be more like 10%, rather than the official 4.9%.
Higher health care costs and more health care regulations on businesses:
ObamaCare was supposed to be Obama’s grand legacy, showing how government could be a force for good. Instead, it’s become an epic failure that will have to dealt with by the next president. The reforms Obama said would repair a “broken” health system have themselves broken it. Premiums in the newly government-run individual market are up an average 22% nationwide, and at rates of 50%, 60%, even 113% in some states — increases unheard of before ObamaCare. Insurance markets that were once vibrantly competitive are now dominated by one or two carriers. ObamaCare has made Medicaid, an already terrible health program, worse by dumping millions more into it. ObamaCare’s taxes, mandates, and regulations are suffocating businesses.
Foreign policy disasters:
A list of Obama’s foreign policy failures would fill a volume, but here are just a few: Obama in 2011 prematurely removed troops from Iraq, creating a power vacuum later filled by ISIS; he let Iran’s covert nuclear weapons program continue, starting a nuclear arms race in the Mideast; after Obama called ISIS a “jayvee team,” it grew in clout and territory as a result of Obama’s neglect; Obama’s intervention in Libya during that country’s civil war led to the country becoming a terrorist haven, with no real government; he and Hillary Clinton pushed the “reset button” with Russia’s Vladimir Putin, and Russia launched hostile actions against its neighbors in Crimea and Ukraine, and threats to the Baltic states; Obama has signaled ambivalence over protecting traditional allies in Asia, leading to China arming up and bullying it neighbors. With massive defense cuts Obama put in place, it’s safe to say the U.S. hasn’t been this weak since the nadir of the Carter years.
This is not even to mention the $1.3 trillion dollar student loan bubble:
Democrats are always in favor of making it easy for people to borrow money, and leaving taxpayers on the hook to cover it. Are there enough people working to cover these debts? Has Obama been focused on helping to lower taxes and reduce regulations for job creators, so they can create new jobs? How will the millennials respond to being forced to pay for all the debt incurred by the man they voted for?