When it comes to the economy, what can a president do?
With the country still struggling to see economic growth, the U.S. economy remains the number one issue affecting the upcoming presidential elections. While the latest polls show over 50 percent of voters are not happy with the way President Barack Obama has handled the current economic crisis, the question is: How much influence can a sitting president have on the economy? If you ask the experts, you get a wide variety of answers.
“It doesn’t matter whether you are a Democrat or a Republican. As the president of the United States, the first criterion that would definitely make a difference in the economy is leadership,” says Dulcelina Stahl, a University of Phoenix instructor. Stahl, who teaches at the University’s Chicago Campus in its School of Business, and has 15 years experience working as a corporate vice president and chief operating officer in business management and the health care industry, also feels that a president’s expression of strength and assurance can make a big difference. “The leader of the country needs to instill confidence in the public and the private sector, so that the people who have money will want to spend it.”
But Stahl admits that it’s not entirely up to the commander in chief to generate new policies. “All portions of the government have to work together in order to affect the economy,” she says, “including Congress.”
With the current Congress opposing Obama politically, most analysts agree that it’s challenging for the president to get anything substantial implemented. “We have an executive and legislative and judicial branch. The executive branch can propose policies, but he can’t just force them to happen; first he proposes them to the legislative branch (Congress) and they have to pass them,” explains Martha Olney, an economics professor at Sienna College in New York State.
So, what legislation makes a difference when it comes to the U.S. economy? Republicans believe the answer lies in cutting government spending and taxes, and Democrats believe the government needs to spend money to stimulate more jobs. Obama’s American Recovery and Reinvestment Act (ARA), which Congress passed in 2009, was the Obama administration’s attempt to spend money to help the economy recover. The ARA aimed to create new jobs, and spur economic activity by providing tax cuts to individuals and increasing federal funds for a large group of government loans and programs.
But that alone wasn’t sufficient, says Olney. “The president can try and effect fiscal policy as he did with the ARA,” she says. “But because the current recession was caused by a complex housing market crisis, which has affected the consumers ability to borrow money,” it simply wasn’t enough to pull the economy out of its slump. As an economist, Olney feels, “No matter what had been passed by either side of the political tracks, we wouldn’t be back at the same level of employment we were at before the recession hit, because the recession was brought on by a complex fiscal crisis.” Either way, whoever ends up in office is going to have a long road restoring balance to the fiscal system.