You've heard it before. The Great Recession was the worst economic contraction since the Great Depression. Period. An economy so injured it was on a respirator.
It takes substantially longer to heal from broken bones than from a case of the sniffles. Watch this video to see unemployment spread like the plague during the recession: http://www.youtube.com/watch?v=P__6W7bJVRQ&feature=youtube_gdata_player.
That is where we were and this is where we are going, thanks to President Obama. The Obama administration's $800 billion fiscal stimulus helped to plug the GDP gap and reduce cyclical unemployment from over 5% to under 3%.
"The die is cast for a much stronger recovery," Mark Zandi, chief economist from Moody's Analytics, told Bloomberg. Further, his projection of GDP growth is 2% this year and 2013 and double that to 4% in 2014 and 2015.
Translation: The power of the expansion phase of the business cycle is in motion, and unless there is a shock to the economy or a drastic change to current economic policy, the country will create upwards of 12 million new jobs over the next four years.
This was projected to happen regardless of who was sitting in the Oval Office.
Now, let's give credit where credit is due.
The president took the stimulus package to a House of Representatives where Republicans vowed to make him a one-term president. After mid-term elections, the GOP put its obstruction plan in motion by blocking a jobs bill and voting on a bogus balanced budget amendment. In spite of that, the economy was saved from a free fall due to the economic policies of the White House.
Don't imagine that the unemployment rate wouldn't have jumped far above 11% without the stimulus. In fact, my biggest criticism is that the stimulus wasn't large enough to get the job creation rolling at a faster rate.
But I understand that the Obama administration didn't think Congress would support a more expensive package, even though they knew that households were paying down debt, thus reducing the multiplier effect of the stimulus.
Our economy was on life support and continues to heal. It is evident with increased monthly job creation, new home sales at the highest level in two years, consumer confidence at its highest in four years and banks have low interest money to lend, that the patient is coming out of the recovery room.
It is even more vital that we remember, as the economy grows and jobs are created, that the surgeon was President Barack Obama.
Jill Beccaris-Pescatore is an assistant professor of economics at Montgomery County Community College in Blue Bell, Pa.
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