War Of Words

You probably have heard what President Obama said about the economy and Romney’s reply to it already. Who is correct?

President Obama said "The private sector is doing just fine" and Romney replied, “Is he really that out of touch?... I think he’s really defining what it means to be out of touch with reality.” So who is right?

It turns out that they are both right. If you look at the whole sentence that President Obama said and not just those six words, you will see that he said,

The truth of the matter is that, as I said, we created 4.3 million jobs over the last two, 27 months, over 800,000 just this year alone. The private sector's doing fine," Obama said. "Where we're seeing weaknesses in our economy (has) to do with state and local government, oftentimes cuts initiated by, you know, governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don't have the same flexibility as the federal government in dealing with fewer revenues coming in.

So the president was only saying one sector was doing “fine,” while Romney was talking about the economy in general and the increase in unemployment for the last couple of months.

So how is the economy doing in the private sector…

As you can see the GNP has exceeded all previous levels and has recovered from the depression years. You can see how it tanked in 2008 – 2009. (Graphs from Business Insider)

What about jobs in the private sector…

They have bounced back to the levels of pre-Obama presidency and are equal to the levels of the Bush presidency.

 So where are the job losses that are causing unemployment to rise? The job losses are in the public sector.

As you can see the public sector is shrinking. As Congress cut back on the federal budget something has to give and it is the number of government employees (I’m not saying if it is good or bad, only that when you cut back something has to give).

When are the cutbacks being felt the greatest?

Here in Connecticut school systems are looking for many ways to make up for the loss of federal funds. Some of the towns are laying off teachers, some are negotiating new contracts with the unions and some are charging higher fees for after school activities.

So they are both right since each was saying something different, they were comparing apples to oranges.