Since Obama took office more than six years ago, the U.S. economy has expanded at a faster pace than nearly all other advanced economies; GDP has grown in 20 of the past 22 quarters, and we’ve had a record 60 straight months of private sector job growth.
We didn’t get here by accident. Our economy rebounded because Obama and Democrats in Congress, along with the Federal Reserve, took action to turn things around in the darkest days of the Great Recession — often over vehement opposition from House and Senate Republicans.
When Obama took office on Jan. 20, 2009, our economy was losing 800,000 jobs a month. GDP had shrunk by a staggering 8.2 percent during the last three months of 2008. Lending was at a virtual standstill, housing prices were plummeting and retirement account balances were tanking.
The number of job seekers per job opening skyrocketed to almost seven unemployed workers for every opening. As a result, consumers spent less, businesses sold less and the private sector created even fewer jobs, putting additional pressure on American families. Our country was facing an economic “death spiral.”
To combat what The Wall Street Journal called the “Worst Crisis Since ’30s, With No End Yet in Sight,” Obama and Democrats in Congress moved quickly to pass the American Recovery and Reinvestment Act. The legislation cut taxes for middle-class families, increased tax credits for the working poor and directed federal funds to states and municipalities so they could keep police officers on the beat, firemen on the job and teachers in the classroom. It invested nearly $50 billion to repair some of the nation’s failing transportation infrastructure.
Democrats in Congress also passed the HIRE Act to reduce the cost of hiring workers. We passed legislation to save 140,000 teaching jobs and keep class sizes down. We passed temporary payroll tax cuts to give average Americans more money to spend and we expanded emergency unemployment insurance so that those looking for work could support their families. These measures prevented additional human suffering and gave a further boost to the economy.
Thanks to these policies and aggressive actions by the Federal Reserve, we reversed the economic free-fall. More than 8.5 million private-sector jobs have been added in the last six years. The unemployment rate has dropped from a high of 10 percent in late 2009 to 5.5 percent last month. The economy has grown at an average annual rate of 2.2 percent since Obama took office, faster than nearly all other advanced economies during the same period. Inflation remains below 2 percent, the Federal Reserve’s longer-term target.
The lesson is clear — when markets freeze and an economy begins a steep downward spiral, governments must do what the private sector cannot: invest aggressively. That’s exactly what Obama and the Democratic Congress did when we passed the American Recovery and Reinvestment Act. It put a halt to the rapidly escalating job losses, helped states and municipalities maintain critical public services and set the stage for a recovery from the worst recession since the Great Depression. History shows it was the right thing to do.
Maloney has represented congressional districts in New York City since 1993. She sits on the Financial Services and the Oversight and Government Reform committees. She is also the ranking Democrat on Congress’s Joint Economic Committee.
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