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In January 2009, before Obama took office, his future economists Christina Romer and Jared Bernstein released a report projecting the effects of the incoming President’s proposed stimulus package. In the forecast, Romer and Bernstein predicted that the stimulus would prevent the unemployment rate from ever hitting 8 percent. If Congress didn’t adopt the President’s plan, the unemployment rate would rise to 9 percent but fall back down to 6 percent by the third quarter of 2012, they argued. In reality, Obama’s massive stimulus package was adopted and the unemployment rate rose to 10 percent in October 2009 and currently sits at 8.1 percent—a number achieved only because millions have given up looking for work altogether.
In June 2010, the Obama Administration claimed the “Summer of Economic Recovery” had arrived. Treasury Secretary Tim Geithner welcomed Americans to the recovery in August 2010. But as of summer 2012, “Americans [were] still waiting for the recovery,” according to Sen. John Thune (R., S.D.). The economy has yet to recover. Unemployment remains above 8 percent and the economy consistently adds less than 100,000 jobs per month.
Obama’s Forecast Failures
Obama deputy campaign manager Stephanie Cutter told MSNBC Wednesday that it is "reality" that 12 million jobs will be created over the next four years.
The administration, and most other economists at the time the Bernstein/Romert report was released, just had bad information for making projections about employment, Bernstein said.
“Look, we made that projection back in 2008 at a time when the most recent information about the economy was that it was contracting at a rate of less than 1 percent,” Bernstein said. “At the time, we simply didn’t have good information. We now know with revised data that in the very quarter where we made that wrong projection, the economy was contracting at almost 9 percent.”
“So the statistics were way off at the time,” Bernstein continued. “It’s also the case that that forecast that we gave back then was the consensus forecast of the economics community. I mean, it wasn’t just that we were wrong. Everyone was wrong. And I think it’s largely because we just didn’t have a clear picture yet of how bad this recession actually was going to be.”