This year’s Economic Report of the President cheers 2014 as a “breakthrough year” for the country’s recovery and advocates policies that the administration says will encourage further growth and strengthen the middle class.
“The unemployment rate plunged to its lowest point in over six years, far faster than economist predicted,” the report says. “Ten million Americans gained the security of health coverage. And we continued to cut our dependence on foreign oil and invest in renewable energy. . . “
In its section of the report, the Council of Economic Advisers said real GDP had grown at an annual pace of 2.8 percent over the past two years, up from only 2.0 percent for 2010 through 2012.
President Obama also calls for various steps to help the middle class such as greater childcare assistance, two free years of community college, better job training and lower taxes on working families.
It’s important to remember, however, than a strengthening economy also presents an opportunity for Washington to pursue comprehensive, long-term fiscal reforms.
The President points out that federal deficits have been cut by two-thirds in recent years. However, the Congressional Budget Office recently projected that deficits would soon begin rising again, adding trillions to the national debt over the coming decade.
As encouraging as the recent growth and near-term improvements have been, the economy will not be able to thrive over the long run if the federal budget’s structural mismatch between spending and revenues remains largely ignored.