5 Continuing Economic Problems to Watch

Can Conservatives Convince Obama to Change Course?

Americans are not happy with the direction of the economy. President Obama’s first-term approval rating is the third worst since War World II, behind only the failed terms of Jimmy Carter and Gerald Ford. Few, if any, economic conditions improved during Obama’s first term when a booming recovery was forecast by his administration. President Obama has become completely unwilling to work with Republicans in Congress in a way every president before him has.

Is there anything that conservatives and Republicans can do to get Obama to work with them for real solutions? If not, the economic problems will likely persist throughout the next year, if not throughout the next four years. Here are the top five persistent problems that continue to drag the economy down.

Price of Gas and Consumer Goods

High gas prices continue to be a major problem for consumers and have a major impact on the economic recovery. Not only do high gas prices reduce the disposable income of consumers directly at the pump, but they also impact nearly every other item that consumers purchase. It takes gas to transport raw goods to a factory in order to be created into a new product. After product is produced, it is then transported again to locations across the country, further raising the cost of the product. By the time consumers make it to the store (after filling their tanks with expensive gas) they are spending more on those products just to cover the increased costs of transportation of those goods.
This means less economic activity as the same dollar purchases a fraction of what it did a few years earlier.

In President George H.W. Bush’s first term, gas prices increased from .92 to $1.12 over four years. Over the next eight years under Bill Clinton, they increased to just $1.42. Under George W. Bush, prices settled to $1.79 after his two terms (there was a spike during his term when gas surpassed $3/gallon before falling to under $2/gallon).

Under Obama, gas skyrocketed beyond the $3 mark where it remained for all of 2011 and 2012, with no signs of falling in 2013. It was the first time gas stayed above $3 for an entire calendar year, and it did so in two consecutive years. President Obama has stated he hoped to see higher gas prices in order to force consumers to switch to other forms of energy. He has opposed drilling and the crucial Keystone Pipeline project. Will voters force action on gas production and an end to importing a majority of our oil?

Healthcare Costs

Obamacare was supposed to “fix” the healthcare system. The government has already admitted that the legislation will not complete its primary task: insuring coverage for all Americans. Additionally, the legislation was supposed to reduce costs. But healthcare costs continue to skyrocket. Apparently it’s a surprise that forcing insurance plans to cover more things than previous would actually increase the costs of those plans. Most of the alleged revenue-producers of the bill have already been discarded, ignored, or downgraded in the amount of revenue they will actually produce. This, of course, just means that Obamacare will run in the red like every other government program, thrusting more debt into an already-bankrupt nation.

Increased Government Dependency

Food stamp usage has increased by more than 10 million Americans during Obama’s first term and a new depressing record is set every month. Government handouts for everyday items such as cell phones are increasing. Disability claims have skyrocketed, just as the number of people who have run out of unemployment benefits also skyrockets. Fewer people are working and more people are taking. And the government is providing more and more at greater costs. In the 1990’s, Republicans forced Bill Clinton to sign welfare reform. The reforms were so successful, that President Clinton would later take credit for the legislation. The government has now run in the opposite direction. Making welfare easier to obtain and increasing the potential pool as millions of illegal aliens have been welcomed into the system.

Joblessness and Underemployment

After four years, the government’s official unemployment rate remained exactly flat, after spiking for most of Obama’s first term. Beyond the problem that the unemployment rate hasn’t changed is the reality that the situation actually remains worse. The government’s unemployment rate is only flat because a large number of people have either run out of unemployment benefits or flat out given up looking for work. In all, there are more than 2 million fewer people working at the start of 2013 than were at the start of 2009. This does not even account for those who only could find part time work or are underemployed, both of which are more apparent in the equally-problematic stagnant wage data.

The Economic Salad Bowl

Now, mix all of this together. With fewer people working (and more of those people making less) that leads to less taxes being paid for an increase in demand of government services and fewer goods being purchased… goods that are already more expensive due to increased transportation costs. Even before consumers hit the gas pumps or the grocery stores, their wallets are already thinned out further by smaller paychecks due to increased healthcare costs and a 33% increase in payroll taxes that were not extended. Payroll taxes take money out of everyone’s paycheck.

President Obama has seemingly laid out his second-term agenda and none of this seems to rank high on his list. Instead, his is an agenda that pushes gun control, legalizing illegal aliens, making the ocean levels fall, and continuing his expensive handouts to unions and bankrupt energy firms. Conservatives will continue to hammer at the economic issues that are hurting Americans and the economy.

But will he budge and change course like Bush, Clinton, or Reagan and work to solve these problems?

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Your Citation
Hawkins, Marcus. "5 Continuing Economic Problems to Watch." ThoughtCo, Sep. 1, 2015, thoughtco.com/continuing-economic-problems-to-watch-3303536. Hawkins, Marcus. (2015, September 1). 5 Continuing Economic Problems to Watch. Retrieved from https://www.thoughtco.com/continuing-economic-problems-to-watch-3303536 Hawkins, Marcus. "5 Continuing Economic Problems to Watch." ThoughtCo. https://www.thoughtco.com/continuing-economic-problems-to-watch-3303536 (accessed December 17, 2017).