President Obama’s big-government fiscal policies promote uncertainty and crowding out of the private sector; whereas, President Reagan’s limited-government policies promoted risk-taking and innovation—keys for economic growth and job creation.
These different policy prescriptions for a weak economy and labor market had substantially different results. To summarize these results, U.S. Senator Ted Cruz said it quite well, “Reaganomics means you start a business in your garage. Obamanomics means you move into your parent’s garage.”
To compare these lackluster employment data under President Obama’s prescriptions of larger government intervention with President Reagan’s prescriptions of limited government interference, I calculate the net jobs added during the current 54-month expansion (June 2009 to December 2013) with changes in the employment-population ratio during the 1980’s 54-month expansion (November 1982 to May 1987).
With approximately 10,000 baby boomers retiring daily and high employment volatility of those between the ages of 16 to 24-years-old, let’s consider the 25 to 54-year-old group.
Historically, this age group faired quite well during past expansions. However, many of them have moved into their parent’s garage during the current expansion, whereby there were 5.8 million fewer 24 to 54-year-olds employed in December 2013 than when the recession began in December 2007.