At MSNBC on Wednesday, Stephanie Ruhle was clearly not happy that Republican Congressman Chris Collins of New York wouldn't roll over and admit to something that isn't true. Collins noted that the tax bill justifiably anticipates annual economic growth of 3 percent or more, and that such growth will generate collections high enough to prevent the slashing of entitlements.
Then, when Collins criticized the Obama-era economy's poor growth record, Ruhle defiantly and defensively shot back with an absolutely false claim that Obama's economy "was at 3 percent at 14 different points." No. It. Wasn't.
Now that the GOP tax bill has been passed by Congress and only awaits President Donald Trump's signature, the left and the press are in the process of pivoting to insisting that the government won't meet its collections targets and will therefore be forced to radically cut spending on Medicare, Medicaid, and Social Security.
In the video segment which follows (HT Washington Free Beacon), a clearly grouchy Ruhle naturally posed a question along those lines. In response, Collins described one planned entitlement reform virtually everyone can agree on, namely refusing to give food stamps to able-bodied adults without children, but otherwise refused to concede that the tax bill just passed would require major entitlement reform.
Ruhle pretended that she didn't hear Collins's answer, and essentially repeated the same question. Collins responded by pointing to the dismal growth record of the Obama era, which is when Ruhle responded — twice — with her "3 percent at 14 points" howler:
Transcript (bolds are mine):
STEPHANIE RUHLE, MSNBC: We should point out that the trade deficit between the United States and China has only increased in the last ten months. I do want to ask, this bill is supposed to spike the economy; the economy that is slowly but steadily growing. If it doesn’t pay for itself, because in paying for itself, there’s the assumption that there’s going to be welfare reform, there’s going to be infrastructure spending — if it doesn’t pay for itself and there have to be cuts, are there going to be changes to entitlements?
CONGRESSMAN CHRIS COLLINS, R-NY: Well, right now the biggest change that we’re looking at in the entitlement world is for able-bodied adults who don’t have minor children at home to get out and get a job. There’s plenty of jobs right now. There’s more jobs than there are people willing to fill it. So when you’re looking at some of the benefits able-bodied adults are getting without minor children at home, that’s going to be a big focus we have. And I think 98 percent of Americans would agree those people should not be sitting on the steps, they should be out working. They may not love the job, they may not love the hours, they may not love the pay, but —
RUHLE: So —
COLLINS: — they need to get out and get a job.
RUHLE: Does that mean we should expect cuts to Medicaid and Medicare, Social Security?
COLLINS: No. We — we are looking really —
RUHLE: Then how are you going to do it?
COLLINS: Well, a growing economy at 3 to 3.5 percent, will double our economy in 20 years to $40 trillion. It’s been growing at 1, 1.5 percent for eight years under Barack Obama, which is the whole reason we ended up —
RUHLE: Sir, it was at 3 percent 14 times —
COLLINS: — with $10 trillion of extra debt.
RUHLE: — during that period.
COLLINS: Excuse me?
RUHLE: It was at 3 percent at 14 different points during that period.
COLLINS: Well, I guess, again, we can agree to disagree. But we ended up adding $10 trillion to our nation’s debt over those eight years. We got to grow —
RUHLE: “And what do you think is going to happen to our nation’s debt with this tax bill? You don’t think we’re going to add to our debt?
COLLINS: “Well, let’s say — let’s say for right now it added $1 trillion over ten years. That’s less than Obama did every year of his presidency. But I —
RUHLE: You do remember that President Obama was elected at the height of the financial crisis, when we were in a housing disaster in this country.
Before getting to the numbers, I simply must point out the following:
- The "financial crisis" and the "housing disaster" were driven by the irresponsible Democrat-inspired easing of mortgage-loan approval guidelines and unprecedented corruption at Fannie Mae and Freddie Mac.
- Even if one concedes (which I don't) that the government had to run a trillion-dollar deficit in the first fiscal year after the "financial crisis" and the "housing disaster" to get the economy back on track, that in no way justifies the Obama administration's four straight fiscal years of deficits that came in at more than $1 trillion (2009, 2010, 2011, and 2012), or the $9.3 trillion added to the national debt during Obama's eight years in office.
- After promising that its 2009 stimulus plan would be a temporary measure, the Obama administration resisted every effort to subsequently rein in spending. Federal outlays rocketed from $2.731 trillion in fiscal 2007 to $3.854 trillion in fiscal 2016,Obama's final full fiscal year in office.
Now let's look at the real record of GDP growth under Obama, detailed here and summarized below:
Key points in the summary graphic above:
- Collins understated Obama era growth, which really came in at a 1.83 percent compound annual rate.
- Even if one gives the Obama administration the benefit of the doubt by removing his first two and four quarters in office, respectively, its growth record still comes in at a completely unacceptable 2.12 and 2.15 percent, respectively.
- For those looking for a reason why the U.S. electorate was ready for a change a year ago, the final six full quarters of the Obama administration tell the tale. Growth during the period averaged 1.6 percent, which on a per-capita basis represents virtually zero growth. The economy was clearly stagnating a year ago, and everyone instinctively knew it.
- All of this underachievement occurred despite a zero or near-zero interest rate environment and trillions of dollars of Federal Reserve quantitative easing. Readers should recall that the economy was considered so weak that the stock market would panic any time the Fed broached the idea of raising interest rates. During the Trump era, the Fed has been raising interest rates (and plans to continue doing so), and the economy hasn't skipped a beat.
- Finally, if the economy under Obama had achieved even a 3 percent annual growth rate, which until his administration was considered barely acceptable, the economy would be 1.6 trillion larger in real terms (expressed in 2009 dollars), and about $2 trillion larger in current-dollar terms. In 2009 dollars, that's almost exactly $5,000 per person, or $20,000 for a family of four.
Key points contained in the detailed graphic seen here:
- It's well-known that the Obama economy never achieved 3 percent calendar-year GDP growth.
- The Obama economy only saw quarterly growth of 3.0 percent or more 8 times out of 32 quarters, not 14.
- The Obama economy only saw four-quarter growth of 3.0 percent or more 4 times out of 29 such periods, not 14.
- Somewhat supporting Congressman Collins's far less errant perception, the Obama economy turned in 11 individual quarterly performances below 1.5 percent, including two contractions after the recession officially ended,, and 8 four-quarter performances of 1.5 percent or below.
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Stephanie Ruhle was dead wrong when she contended that growth was 3 percent or more "at 14 points" during the Obama administration. MSNBC and Ruhle owe their viewers a correction I expect we'll never see.
Cross-posted at BizzyBlog.com.