THE RESET: Debt, stocks both up in 1st Obama term
- Article by: TOM RAUM
- Associated Press
- January 18, 2013 - 3:26 PM
Two things soared big time during President Barack Obama's first term: the national debt and the stock market.
So what gives?
The debt rose from $10.6 trillion four years ago to close to $16.4 trillion now, a 55 percent increase.
The Dow Jones Industrial Average was 7,949 on Inauguration Day 2009. On Friday, it closed nearly 72 percent higher at 13,649 for a five-year high.
Both increases are products of the worst economic downturn since the Great Depression.
Stocks have posted big gains, for sure, but they're still down from the Dow's all-time high of 14,164 on Oct. 9, 2007.
And the surge in the national debt reflects higher government spending on stimulus and safety-net programs and two wars as well as lower tax revenues due to weaker corporate and personal earnings, job losses and Bush-era tax cuts.
For most of the past four years, Obama has emphasized that he inherited the bad times from President George W. Bush.
But as he moves this weekend into his second term, it will become harder and harder to blame his predecessor's policies for present woes.
The recession began in December 2007 and technically ended in mid-2009. But the economy remains troubled, recovery excruciatingly slow.
The economy grew only about 2 percent in 2012 and isn't projected to rise much above that for the next few years.
Unemployment is 7.8 percent — right where it was in January 2009, but down from a high of 10 percent in October 2009. It's likely to be years before job growth returns to pre-recession levels of 5-6 percent.
Real median household income is down, Americans living below the poverty line up.
Obama calls his second-term Inauguration a reminder that much more needs to be done to heal the economy.
"It's also a reminder for me that this country has gone through some very tough times before," he said in a new video from the Presidential Inaugural Committee. "But we always come out on the other side."
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