For Every $1 Added to the Economy, Obama Added More Than $3 in Debt

This is about as good an example of what is known as “Okun’s Leaky Bucket”. Money that is spent by government does not have nearly the same effect or “velocity of money” as private investment or consumer spending does.

When government spends money it does so for reason of politics and corruption. Government does not create wealth it just spreads money around either to the unproductive or least efficient. While defense is a critical role of government, does anyone actually believe that Pentagon spending is efficient?

When the private sector spends money it is done in order to create something, repair something, or engage in a crucial economic need for someone, so by its nature it is very efficient. Dollars tend to go where they are most needed.

It is as if the money government has to spend is put in a bucket and much of it seemingly vanishes from the economy.

Via Fox Nation:

Since Obama has taken office ….
[through Q2 2012 for comparative purposes]

For every $1 added to the economy, we’ve added more than $3 in debt added $5.23 trillion in debt vs. $1.68 trillion to the economy 50% increase in debt vs. 12% increase in economic output

Total Public Debt:

$10,626T [Jan 20, 2009]
$15,856T [Jun 30, 2012]

–> $5.23 trillion increase in debt


$13,923T [Q1 2009]
$15,606T [Q2 2012]

–> $1.68 trillion increase in GDP


In the mean time the Federal Reserve is printing money nonstop and is tanking the dollar:

The dollar hung near seven-month lows against major currencies on Monday after last week’s Federal Reserve announcement of aggressive easing dampened the outlook for the U.S. currency.

The U.S. dollar could recover somewhat in the near term, as some traders said the greenback’s 3 percent drop so far this month may have been overdone. That slide took the euro to a four-month high against the dollar and the yen to a seven-month high.

The Fed on Thursday said it would pump $40 billion into the economy each month until unemployment falls significantly. A week earlier the European Central Bank unveiled a new bond-buying program to address the region’s debt crisis.

“The outlook for the dollar has definitely been damaged by the policy actions by both central banks — the Fed and the ECB,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.


About Chuck Norton

Political issue strategist and communications professional. I write about politics, education, economics, morality and philosophy.
This entry was posted in 2012 Primary, Budget, Econ, Obama, True Talking Points and tagged , , , , , . Bookmark the permalink.

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