Shocking Truth: This Is How Barack Obama Was Able To Prop Up The U.S. Economy

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Barack Obama is one of the biggest “Keynesians” of all time, but unfortunately most Americans don’t even understand what that means.  In this article, I am going to share with you the primary reason why Barack Obama has been able to prop up the U.S. economy over the past eight years.  If Barack Obama had not taken the extreme measures that he did, we would be in the midst of a historic economic depression right now.  But by propping things up in the short-term, he has absolutely demolished our long-term economic future.  But like most politicians, Obama has been willing to sacrifice the future for short-term political gain.

If you take any basic college course in economics, you are going to learn about John Maynard Keynes.  Without a doubt, Keynes was one of the most famous economists of the 20th century, and one of the things that he believed was that governments should go into debt and spend more money when an economic downturn strikes.  By injecting additional funds into the economy during a time of crisis, he believed that the severity of recessions and depressions could be reduced.  This approach ultimately become known as “Keynesian economics”, and in the post-World War II era virtually the entire world embraced it at least to some degree.  Here is more on Keynes from Investopedia

An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed by the British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression. Keynes advocated increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the Depression. Subsequently, the term “Keynesian economics” was used to refer to the concept that optimal economic performance could be achieved – and economic slumps prevented – by influencing aggregate demand through activist stabilization and economic intervention policies by the government. Keynesian economics is considered to be a “demand-side” theory that focuses on changes in the economy over the short run.

Keynesian economists correctly point out that there is a “multiplier effect” to government spending.  In other words, when the government spends money it ends up in the hands of ordinary people.  In turn, those people spend that money on various goods and services that they need, thus boosting overall economic activity.  And the more the money circulates, the more the economy is stimulated.  So one dollar of additional government spending does not just add one dollar to GDP.  Rather, the impact on GDP is often significantly greater than that.

Of course the bad news is that whenever the government borrows money it is stealing consumption from the future.  So we are literally destroying the future that our children and our grandchildren were supposed to have in order to make the present look a little bit brighter.

When Barack Obama entered the White House, the U.S. was in the midst of the worst financial crisis since the Great Depression.  The Bush administration had already begun to ramp up spending, but Barack Obama took “government stimulus” to ridiculous new levels.  The national debt has risen by an average of more than 1.1 trillion dollars a year while Obama has been in charge, and this fiscal year we are on pace to add more than 2 trillion dollars to the debt.

At this moment, the U.S. national debt is a whopping $19,901,545,151,126.51, and it will cross the 20 trillion dollar mark by the time Donald Trump is inaugurated on January 20th.

But when Barack Obama was inaugurated, the national debt was only 10.6 trillion dollars.  That means that we have added about 9.3 trillion dollars to the debt since that time.

So we have borrowed and spent 9.3 trillion dollars under Obama that we did not have.  But because of the “multiplier effect”, that 9.3 trillion dollars actually had a far greater impact on the U.S. economy.

Let’s be conservative and just double that number.  So that would give us an 18.6 trillion dollar overall impact on U.S. economic activity.  Spread over eight years, that comes to an average GDP impact of 2.325 trillion dollars a year.

But over the last eight years U.S. GDP has only been averaging about 16 trillion dollars a year.  So if you took away 2.3 trillion dollars a year, that would be about one-eighth of our entire economy.

In other words, without all of this debt that Barack Obama and Congress have been getting us into, we would be in the worst economic depression in U.S. history right now.

And I haven’t even factored in state and local government debt, corporate debt or household debt.  The truth is that I am not exaggerating one bit when I say that we are enjoying a debt-fueled standard of living that we simply do not deserve.

But even with all of this debt, the U.S. economy has still not been performing really well.  In fact, Barack Obama is going to be the only president in U.S. history to not have a single year when U.S. GDP grew by at least three percent.

Despite what many in the mainstream media are telling you, the reality of the matter is that Donald Trump is going to inherit an economy that is deeply troubled.  If you doubt this, please see my previous article entitled “11 Very Depressing Economic Realities That Donald Trump Will Inherit From Barack Obama“.

Donald Trump is talking about cutting taxes and reducing regulations, and all of those things are good, but ultimately those measures are not going to matter that much.

What is going to matter is what Donald Trump decides to do about our exploding debt.

If Donald Trump wants the U.S. economy to continue to remain at least somewhat stable in the short-term, he is going to have to keep piling up debt like Obama has.  Because if Trump and the Republicans decide that they want to get our debt under control, that will plunge us into a horrifying economic depression almost immediately.

But if Donald Trump continues to steal money from future generations of Americans at the same pace that Barack Obama has been doing, he will literally be destroying the future of America.  It will be a crime on a scale that is almost beyond words, and if they get a chance to do it, future generations of Americans will look back and curse him for what he has done to us.

So Donald Trump is really in a no-win situation when it comes to the economy.

The only way that he can match Obama’s performance is to do what Obama did, but by doing so he would literally be killing the future.

As a nation we have been consuming far more wealth than we produce for a very, very long time, and the only way that we have been able to do this is because we have been able to go into so much debt.

But now a day of reckoning is fast approaching, and I am not sure if Donald Trump even realizes that he will soon be faced with some incredibly heartbreaking choices.

Further Reading

The Modern Survival Manual: Surviving the Economic Collapse

The Beginning Of The End (by Michael Snyder)

The Death of Money: The Coming Collapse of the International Monetary System

Crash Proof 2.0: How to Profit From the Economic Collapse

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Contributed by Michael Snyder of The Economic Collapse.

Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream , The Truth and Economic Collapse Blog.

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  • rich

    Wasn’t that Obama’s plan all along, to wreck our economy and therefore turn us into a second class country? I figured that all along but I thought he would pull off some shannanigan to remain in the White House. So far he didn’t and time is running out, but he still has the power to declare martial law and remain in his seat.

    • TrevorD

      Or maybe with that sort of debt creation and mismanagement he really just wants run away and retire and leave Trump to sort it.

      • John Chrysostom

        Trump can repudiate the debt. What the (((dynastic banksters))) have looted by the combined frauds of fractional reserve banking, debt currency, crony monopolism, and manufactured war profiteering is not “owed” to (((them))).

        We do not owe thieves anything.

        • ahuxley

          Exactly. And he SHOULD REPUDIATE THE DEBT and send the bankster parasites packing…

    • gabe

      Well he is a globalist, so yes. To make everyone equal you must drop the standards to the lowest common denominator since the lazy will never do enough to get themselves out of the poverty they are in.

    • maxparrish

      That while furthering the Cloward Piven effect.

    • Dennis B Anderson

      Yes indeed it is! he robbed Medicare I had been paying into it since Jesus Christ was a baby. I was asked if I had medicare the first time I used it. I paid over the counter $71.00 for laser surgery what medicare was to pick up was the rest of $1540.00. I get sent a bill for the total ammount and the community hospital kept the $71.00. Im not on SSI so I went under the radar so to speak? This is how they gauge, or can tell if you should get medicare you have to be 65 years of age? Most stupid people would pay this right.! Some with money who wouldnt want the problems would pay this. Then theres guys like me that stand up for who the hell I am. The community hospital turned it over to a collection agency and it soon hit $6500.00 and they were messing with my my 125% plus credit rating. I went back to the hospital and threatened them with a letter from my attorney. This was the second time copying my SSI Medicare Part A & B cards on the premices! I told them that they had a law suit coming and to inform the collection agency the same. I had someone from the collection agency months after the fact call me with news that I now owed $7,000.00. I told him he wasnt getting the free trip to Hawaii for messing with me. What he would get was put in the hospital that he false billed me to. My second suggestion was that I would meet him outside the collection agency. I threw a couple of FUs at him,and made a beleiver out of him that I was capable of ripping his lips off and feeding them back to him. YOU SEE OBAMA GOT THAT MONEY AND GAVE IT TO THE ILLEGALS ITS A FACT. There comes a point in time all that paper work costs money, and gets negative results. Obamas idea was to just kick back year when I was to receive my Part B benefits. You know what I told Obama / SSI / Medicare? Thats right go F yourselves its amazing what a theif of a president we have. Where did all of that money go that Hillary & Obama blew and no one is holding them accountable for it. Where it went was in the pockets of our leaders in Washington DC. I will be pushing for the death penalty for the Clintons , and the extermination of Obama, and his entire administration.

  • CAWoman

    Wonder how much they shifted into the pockets of their loyal left crooks….

  • Phil_Ossifer

    Keynesianism can be explained thusly: when times are tough, crank up the printing presses. Inflation? We don’t need no steenkin’ inflation. Kenyes believed in economic prosperity by proclamation, just like the climate change people believe that proclaiming something to be true makes it true. And it works…for a while. Then when everything falls to sheeyit they say, “But…our intentions were good.” Yeah…that’s a real comfort when you’re out of work, hungry and facing eviction.

    • navre12

      Really Phil?, you honestly believe that the whole climate change is bogus even when the Pentagon, 99.9% of academia, our Homeland Security establishment and governments around the world from the first tier countries to the bottom tier are moving forward post haste on remediation or a least attempting remediation of the Global Warming problems…Do you work for the Koch Brothers or Exxon?.

      • smcal1

        @navre12….global warming has never ever been proven and with only a little more than 100 years of weather records to fall back on you decided to drink the koolaide and get on board. Typical of the left to throw a load of doody out and see how many will bite and the left always does…..go check the weather records dating back every decade and you will see without a doubt there are weather cycles all the way back to the begining of record keeping but then why would the left believe in facts??

        • navre12

          smcal1…Climate records within the U.K. go back to 1659, you can read studies in academic publications such as Science and Scientific American, (are you now going to call them lefty organizations?).

          Well documented studies from Penn State go back 1500 years and Peleo earth studies now go back 11,500 years. They all draw and demonstrate the same global warming uptick exasperated by the 19th, 20th and now current carbon footprints of the Industrial Age.

          Calling believers of scientific facts Lefty(s) is ignorant and childish. I personally call myself Conservative but educated and informed.

          Research and educate yourself more and quit the name calling.

      • Jim

        You are obviously still mainlining obolas Kool-Aid. STFU, moron..

        • navre12

          Jim…Does your mother know that your playing on her laptop?

          • Jim

            STFU. Moron. And cut off your consumption of obola juice..

  • Fred Bastiat

    “If Barack Obama had not taken the extreme measures that he did, we would be in the midst of a historic economic depression right now.”

    While I generally agree with the article’s assertions and take on economic theory, I’d disagree with this one broad opening statement. Bush’s and Obama’s government interventions both protected bad actors and rewarded poor financial decisions by the largest private cronies. The bonuses never changed from collapse to now, same people, same system, with some new names “running” government.

    It could be argued that if government had gotten out of the way and the recession been allowed to run its course, the economy would be in better condition. Lower government debt, stronger fiat currency, and assets moved by the market from bad decision makers to other decision makers impact the economy positively. I’m not supporting fiat currency, I’m simply saying that a fiat currency can be more or less trusted. Bush and Obama weakened the US fiat currency system dramatically, it’s more fragile than ever.

    Essentially, the quote above leaves the impression that the natural cycle would have created a decades long recession. But recessions that long are normally a government creation and caused by government intervention and failed fiat currencies. The market itself generally reacts much quicker for washing out bad debt and bad actors.

    • Frank

      I support that. Government subsidies and other forms of “good intentions” intervention do nothing more than disrupt the natural flow of supply and demand, free market competition, and the bases for market-driven allocation of resources.

      • Apriljrocco

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  • opm6065

    Very easy way Trump can raise some money without increasing the debt: offer tax amnesty. By getting rid of fees & penalties for anyone that owes back taxes if they agree to pay the taxes they owe. He probably knows it too.

    • chris VN

      Start with ” Rev ” Sharpleton, lol.

      • Rebel w/out a Cause

        NO! Make THAT bitch pay his due.

  • ahuxley

    This is one of the most disingenuous articles on “DEBT” that I’ve read in a long time.
    Mr. Snyder treats “DEBT” as though it is as indispensable as OXYGEN.
    This is the type of nonsense that the Global Bankster Cartel depends on in order to hide the abysmal depth of their crimes against humanity.
    The ONLY reason we as a nation ARE in DEBT is because in 1913, a cabal of European and Wall Street banksters were able to slip through a corrupt congress, The Federal Reserve Act. This nefarious piece legislative chicanery transferred the process of creating and distributing the currency of the U.S. from the U.S. Congress to the bankster vermin themselves. This was done in direct and gross contradiction of the U.S. Constitution. About 95% of our currency is now created out of thin air by this “Private Sector Bankster Cabal” and then LENT into the economy. And that is where OUR DEBT come from. There is NO logical reason that we should have to BORROW our currency, which is a most important tool in an economy, from a bunch of feckless, parasitic dirt-bags who contribute nothing at all to the economy.
    If anything, Trump should cobble together a strong coalition of anti-Fed congress-critters and Senators and put an end to this grand larceny…

  • omni

    simple solution-DEFAULT

  • Glenn

    Too bad The Donald chose a Goldman Sux bankster as his Treasury Secretary. Otherwise, on the 1st day in office, he could have instructed him to print him a 20Trillion dollar bill (WITH TRUMP’S PIC ON IT), hand it to the Fed and tell them to GTFO. They are just printing the money anyway.

  • Rebel w/out a Cause

    Unfortunately, Mr. Snyder believes that he is an expert on all matters of governing and economy. But the truth is, he cherry-picks data and then uses it to build his arguments. Most of his writings, such as this one, qualify as doom porn. Check out his websites for proof. He’s making a lot of money off of this crap. One word of warning, though. The commenters on HIS sites are mostly religious fanatics. Don’t bother to try to debate them in the comments section. Michael will simply delete your comments. We can’t allow healthy debate, can we?

    As for this article – what’s the solution, Mike? Oh, that’s right. There isn’t one. We’re screwed.

  • Trump wants to be more fiscally responsible than Obama or Clinton.
    Unfortunately he clearly does not understand free market economics.
    His plans to impose punishing tariff barriers are economic folly, that free market economists know full well will only backfire.

  • chris VN

    Isn’t it a ” Kenyan ” not a” Keynisian ” President???

  • Jim

    And obola being TOTALLY anti-USA, anti-Judeo Christian, racist, bigoted muslim has one his darndest to destroy OUR country. EXECUTE this asshole fraud and ALL his minions and appointees(except Hagel and Gen.P) and supporters…