”1) Obama “inherited” the worst set of economic conditions since World War II.
False. Based on unemployment, inflation and interest rates, the recession of 1981-82 was worse. Unemployment during the early ’80s reached 10.8 percent, inflation 13.5 percent, and prime interest rates reached 21.5 percent. During this so-called “Great Recession,” the numbers peaked at 10.2 unemployment, 5.6 percent inflation and 7.25 percent for the prime interest rate.
2) Obama’s economic policies “rescued the economy from falling off a cliff.”
False. Nearly 350 economists, including several Nobel laureates, publicly urged Obama to following the path President Reagan pursued — cutting taxes, slowing the growth of domestic spending and continuing deregulation.
Most business economists think Obama’s “stimulus” plan accomplished little, if anything, with some academic economists, like Stanford’s John Taylor, believing that stimulus actually made things worse: “I just don’t think there’s any evidence. When you look at the numbers, when you see what happened, when people reacted to the stimulus, it did very little good.”
TARP, begun under President George W. Bush, supposedly prevented financial institutions from collapsing. But Neil Barofsky, in his new book called “Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street,” argues that TARP completely failed in its mission: to increase liquidity to jumpstart lending.
The reason for intervention in the first place is that banks had become “too big too fail.” Not only did the banks park the money and make risk-free profits off the spread, but banks became bigger than ever after TARP”