By: Daniel Nardini
One has to wonder how the United States, which had almost completely eliminated its national debt in 2000, and was registering monetary surpluses, could suddenly become the biggest debtor nation on earth with a $14.5 trillion debt (equal to one-fifth of the entire world’s output)? This phenomenon, which is now being called America’s “lost economic decade,” is being debated by historians on how it came to this and doubtless will continue to be debated for years to come.
These facts are known. In 2001, when U.S. President Bill Clinton left office, the United States was running a monetary surplus. This would be the last year this occurred. Under U.S. President George W. Bush, the United States ran national deficits every year throughout his entire presidency. This trend continued under U.S. President Barack Obama and in fact got worse—the national deficits increased at twice the rate compared to the last two years of Bush.
In August, 2001, the unemployment rate was 4.9 percent. As the decade progressed unemployment slowly rose. In the first two years when the Great Recession began, unemployment rose as high as 10 percent and then has remained as of July, 2011, at 9.1 percent. Forty-four percent of all those who are in the unemployment line have become long-term unemployed (27 weeks and longer). From 1990 to 2000, American income in real terms had increased 20 percent. However, from 2001 to 2011, American income fell 3.6 percent in real terms.
And the number of jobs created in real terms during the entire decade from 2001 to 2011? According to the U.S. Bureau of Labor, the number of jobs created was zero . In other words, the United States had lost as many jobs as it had created. The job loss was occurring at the same time that new jobs were opening, and this has meant that incomes not only stagnated but actually declined. These pieces of information add up to a decade of lost economic growth and worse an economy that has actually declined while a number of nations, like Germany and especially China, have seen their economies grow and grow dramatically.
Historians will argue why America had lost an entire decade of potential job growth and worse growth at all. Why from 1990 to 2000 America’s economy had grown at such an enormous rate only to decline a decade later? People will argue that Bush’s policies, coupled by Obama’s inexperience, have led us to this present predicament. Others will argue that the policies of the previous administration under Clinton planted the seeds of America’s decline by not dealing with the underlying problems of poverty, good paying American jobs being sent overseas, and not adequately preparing America for the 21st Century. Still, others will argue that conditions like the terrorist attacks of September 11, 2001, the Enron collapse, the wars in Afghanistan and Iraq, and finally the sub-prime housing mortgage collapse were conditions beyond anyone’s control nor could they have been fully anticipated.
Whatever maybe argued about the past lost economic decade, I can only hope that the decade we are in will not be another lost decade. What we are in now must be changed, and as a people we want America to experience real job growth, real economic growth, and an end to the deficits that are hobbling this growth. If there is any immediate lesson we can learn from this lost economic decade it is that we cannot have another and another anytime in the near future. The danger of this is total collapse.
The Lost American Economic Decade
By: Daniel Nardini
These facts are known. In 2001, when U.S. President Bill Clinton left office, the United States was running a monetary surplus. This would be the last year this occurred. Under U.S. President George W. Bush, the United States ran national deficits every year throughout his entire presidency. This trend continued under U.S. President Barack Obama and in fact got worse—the national deficits increased at twice the rate compared to the last two years of Bush.
In August, 2001, the unemployment rate was 4.9 percent. As the decade progressed unemployment slowly rose. In the first two years when the Great Recession began, unemployment rose as high as 10 percent and then has remained as of July, 2011, at 9.1 percent. Forty-four percent of all those who are in the unemployment line have become long-term unemployed (27 weeks and longer). From 1990 to 2000, American income in real terms had increased 20 percent. However, from 2001 to 2011, American income fell 3.6 percent in real terms.
And the number of jobs created in real terms during the entire decade from 2001 to 2011? According to the U.S. Bureau of Labor, the number of jobs created was zero . In other words, the United States had lost as many jobs as it had created. The job loss was occurring at the same time that new jobs were opening, and this has meant that incomes not only stagnated but actually declined. These pieces of information add up to a decade of lost economic growth and worse an economy that has actually declined while a number of nations, like Germany and especially China, have seen their economies grow and grow dramatically.
Historians will argue why America had lost an entire decade of potential job growth and worse growth at all. Why from 1990 to 2000 America’s economy had grown at such an enormous rate only to decline a decade later? People will argue that Bush’s policies, coupled by Obama’s inexperience, have led us to this present predicament. Others will argue that the policies of the previous administration under Clinton planted the seeds of America’s decline by not dealing with the underlying problems of poverty, good paying American jobs being sent overseas, and not adequately preparing America for the 21st Century. Still, others will argue that conditions like the terrorist attacks of September 11, 2001, the Enron collapse, the wars in Afghanistan and Iraq, and finally the sub-prime housing mortgage collapse were conditions beyond anyone’s control nor could they have been fully anticipated.
Whatever maybe argued about the past lost economic decade, I can only hope that the decade we are in will not be another lost decade. What we are in now must be changed, and as a people we want America to experience real job growth, real economic growth, and an end to the deficits that are hobbling this growth. If there is any immediate lesson we can learn from this lost economic decade it is that we cannot have another and another anytime in the near future. The danger of this is total collapse.