What Is Obamanomics?
Obamanomics is a popular neologism used to describe the economic policies of the administration of former U.S. President Barack Obama.
The term is commonly associated with the economic stimulus programs enacted by the Obama Administration in response to the Great Recession of 2008.
- Obamanomics is a neologism referring to the economic policies of President Obama.
- It is often associated with the stimulus programs used to combat the Great Recession.
- Critics of Obamanomics view it as representing an undue expansion of government’s economic role.
As is often the case in politics, the precise connotations of Obamanomics will depend on the political views of the commentator in question.
For supporters of Obamanomics, the term is often associated with the Obama Administration’s economic stimulus policies. Examples of these policies include the 2009 passage of the American Recovery and Reinvestment Act, which was an $831 billion economic stimulus package; and the 2009 bailout of the U.S. automobile industry, which was on the verge of collapse at that time. Other notable policies associated with Obamanomics include the raising of income taxes on high-income earners; the imposition of a cap, or “sequester,” on military and discretionary spending; and the passage of the 2010 Patient Protection and Affordable Care Act (ACA), also known as Obamacare.
To its detractors, the term Obamanomics has connotations of increased government spending, taxation, and regulation. In effect, Obama’s critics view Obamanomics as an unwelcome expansion of the role of government in the economy. In this manner, Obamanomics can be contrasted with Reaganomics, another popular neologism referring to the economic policies of former U.S. President Ronald Reagan. While Obamanomics is associated with an expanded government role, Reaganomics is associated with lower taxes, decreased government spending, and fewer regulations.
Use of Term Obamanomics
While some commentators use the term Obamanomics in a positive or negative light, many use it to simply refer to the economic policies of President Obama, without any necessarily positive or negative connotations.
Real World Example of Obamanomics
Supporters of Obamanomics claim that the dire financial situation of the U.S. economy that greeted President Obama when he was elected to office in 2008 necessitated a strong government response. These dire circumstances included a soaring fiscal deficit, a collapsing housing market, a stock market in freefall, the apparently imminent risk of systemic banking-sector collapse following the shocking bankruptcy of Lehman Brothers, and dramatic job losses.
Obama’s signature response to these issues was the ACA, which increased government spending by over $800 billion for the decade spanning 2009 through 2019. The spending was focused on preserving and creating jobs that were threatened by the financial crisis underway at that time, while also investing in areas such as health, education, and civil infrastructure. The ACA is an example of Keynesian economic theory in that it was predicted to have a stimulative effect on the economy.
In July 2014, a panel of economists were polled on the question of whether the ACA had caused U.S. unemployment to decline relative to what would have otherwise occurred, with 97% of respondents answering in favor of the motion. When asked whether the ACA would likely deliver benefits that exceed its costs, 75% answered in favor.