Quick Takes | Budget Taxes and Public Investment

Obama’s inheritance: Less than expected

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As recently as last November, the consensus of economists was that U.S. unemployment would reach 7.7% by the end of 2009. Today’s unemployment rate of 9.4% underscores how the Bush economy was much weaker and deteriorating much more rapidly than most people realized at the time of the U.S. elections. This is also worth noting when judging the success of the stimulus. When the Obama Administration started planning its budget and designing the stimulus, it didn’t fully see the crash course the country was on. Even as recently as March of 2009, economic forecasters were saying unemployment would hit 9.2% at the end of 2009, which was still too optimistic. Analysts and policymakers should remain cognizant of the fact that Obama inherited an economy and a federal deficit that were far worse than anyone expected. –Larry Mishel