The right-wing has always viewed democrats as the “tax and spend” government that sends us all into horrible debt. Indeed, Obama is often blamed for the massive deficit we’re experiencing now.
With the Bush (s)election in 2001, he inherited a massive surplus courtesy of the Clinton presidency. He lit a fire under the housing market, and all was well — we were spending a lot, but we were bringing a lot back into the economy. He issued tax cuts, since we could afford too without any thought to the long run — tax cuts are great for us, but they’re like a huge gash in income for the government — it’s not necessarily the end of the world, but it means having to rework your budget and reduce your expenses, not spend more.
Despite commonly held beliefs, Obama actually spends less than his predecessor, presenting a far more balanced approach to spending — spending less than his predecessor, Bush, and limiting tax breaks for the highest earners, including himself. By allowing tax breaks for the middle class and working poor, he increases the amount of money available to spend for the bulk of the population, while still increasing government revenue. This allows the economy to grow, but at a slower, more stable rate, decreasing the likelihood of a double dip recession. Less housing market bubbles, less crashes.
In economics, rapid growth usually means rapid crash. Predictably, deregulating predatory lenders and banks, as well as Alan Greenspan (libertarian)’s failure to pop the housing bubble, the housing market crashed. As with the last major crash, foreclosure on homes, the ruining of credit and we found ourselves in the middle of a massive recession which echoes of the Great Depression of the 1930s. Banks were the only ones to make a profit, and more and more families struggled to make ends meet while small businesses laid off employees and did their best to stave off bankruptcy.
In January of 2008, the Congressional Budget Office predicted a budget surplus in 2008. They also warned that a particularly bad recession would flip this surplus into a deficit. The recession being worse than originally believed meant that in January 2009, the CBO released an updated version of their predictions predicting a deficit in 2012. Republicans and Obama-detractors focus on the 2008 predictions, ignoring the warning signs and present this as proof that Obama is destroying the economy.
Economics is not a hard science. Economists base predictions on “if this happens, then the end result will probably be this.” Note the if and the probably. In order for us to pull ourselves out of this recession, we would need more jobs, more financial stability for the middle class and working poor. This would give the majority of Americans more peace of mind, and consequently, more spending power, pumping more money into the economy and stimulating slow but steady growth. The approach that would accomplish the best results would simply be to create growth and ease the burden on small businesses and middle class workers — such as Obama has done by growing American jobs.
The attitude that Obama is destroying the economy because it is not growing fast enough is indicative of a lack of understanding of the importance of long term sustainability in economics. Rapid growth gives us the Dot Com bubble burst and the housing market crash. To use an easily understandable analogy, you can build a skyscraper as high as you like, but without the proper foundation, it is only a matter of time before it topples.