It was the dueling talking points this weekend. The president took advantage of an excellent second quarter Gross Domestic Product report to tout his economic strategy. The GDP numbers came in at -1% growth for the months of May through June. That was better than the 1.5% contraction that was the consensus. The first quarter's numbers were also revised to show a contraction of 6.4% which was a half percent higher than the previous survey. Meanwhile, Senator John Thune took nearly four minutes to attack the Democrat's health care proposal as an overhaul that would have the government take over the industry.
The president took credit for this better than expected news by touting his economic recovery plan, his foreclosure prevention plan, and the bank bailout. He then immediately went back to the talking points the White House has been preaching since they took over. The president wants a future economy that doesn't rely on constant booms and busts. That will require an economy where the populus is educated so that innovation is encouraged. It also requires an economy where families can afford health care. This has been the White House mantra since before the admin was in the White House.
The president also acknowledged that next Friday's jobs numbers would not be pretty. He appears to be learning to manage expectations better. We all famously remember the President promising that unemployment would reach 8% without the stimulus and now of course it's approaching 10%. Now, the president acknowedges the challenges that Americans have in securing a job. In this address at least, he didn't make any unreasonable predictions about job growth.
The president laid out an economic utopia in which everything is green, everyone is educated, and everyone that wants one has a job. It remains to be seen if his big government policies will achieve it. Ronald Reagan also believed that the path to economic growth was to unleash innovation. Yet, Reagan cut taxes and decreased the size of government to get there. Obama believes that the path to growth and innovation is to increase the size of government.
The president said something very ironic. He said that our economy can't be based on people using their credit cards to run up debts they can't pay back. That's ironic since that's exactly what the president is doing now with the government's credit card, the treasury bond.
Meanwhile, John Thune of South Dakota delivered the Republican responose. He talked about health care reform. Thune quoted an unnamed Democratic Senator who characterized the current Democratic proposal for health care reform as the "mother of all unfunded liabilities". Both Medicare and Medicaid are funded at both the state and national levels. The Democrats health care plan would put tens of millions more in both the Medicare and Medicaid system and that will ultimately cost some government entity a lot of money. That's what Thune meant by unfunded liability. Thune said that the current health care reform proposals would cost his state, South Dakota, about $45 million yearly. Thune rattled of Republican talking points: the Democrat's plan will increase the size and scope of government, put the government in between the patient and doctor, and increase the deficit.
Thune said that the Republicans plan for reform would include tort reform, create competition in insurance, and provide for the same tax breaks to those that get their own health insurance as those that get it through their employer. That's an allusion to health savings accounts that would credit health insurance buyers a tax credit to buy their own insurance.
The June employment numbers lead directly to weaker consumer confidence and dropping presidential poll numbers. It remains to be seen if the latest GDP numbers will have a similar positive effect on all of those things. Of course, GDP numbers come out a week before July's employment numbers. Those will likely have a bigger political impact than the GDP numbers. That's because people feel employment a lot more than the feel the overall growth of the economy.
On health care, the Republicans have the winds at their sails. The Democrat's plan is getting less popular each and every day. Now, they will have a full month of townhall meetings and detailed analysis of the current plans. In my opinion, the talking points are effective because they're almost entirely correct. Now Republicans have an full month of old school grass roots politicking to get that message out.