According to the White House Office of Management and Budget, 2012 is going to be a bleak year for the economy, with unemployment above 9 percent through next year's election season and real GDP growth of 2.6 percent. And because the state of the economy is consistently one of the most consequential factors in a presidential election, the forecast weighs heavily on Obama supporters (two polls from today don't help much either). If there's a silver lining, it's that the OMB is "not forecasting a double-dip recession," Katharine Abraham, a member of Obama's Council of Economic Advisers, told the press today. But here's why this economic forecast spells trouble for the president:
Even a jobs bill won't matter at this point, writes Erik Waason at The Hill:
“The economic projections made clear that in the short-term in particular there is a real need to kick-start economic growth,” White House Budget Director Jack Lew said Thursday.
But even if some of Obama's proposals make it through Congress over the expected GOP opposition, it is likely too late to revive the economy in time for the 2012 election, according to the budget review.
Typically these reports are optimistic, writes Doug Mataconis at Outside the Beltway:
Usually, the White House is where the rosy optimistic forecasts come from, but these numbers are pretty much consistent with forecasts we’ve seen from other sources... The White House forecast says that they don’t foresee a double-dip recession, but we’re skirting so close to the edge of one right now that it wouldn’t take much to push us over the edge, and the act that does it is more likely to come from the ongoing crisis in Europe than anything happening in the United States.
All of this leaves us with the question of how, exactly, Barack Obama is going to manage to find a way to win re-election in November 2012 if the unemployment rate is, say, 9.0% and job growth remains anemic.
Wall Street has even lower expectations, writes Zeke Miller at Business Insider:
The projections far outpace those of Wall Street. Goldman Sachs is expecting just 2.1% GDP growth and 9.25% unemployment in 2012, while JP Morgan sees just 1.3% GDP growth and 9.5% unemployment.