Things are looking great for President Obama’s economic legacy. Even better than anyone could have hoped, frankly.
On Thursday July 11th, two economic records were set. The first record shattered was the U.S. government posted a ‘huge’ budget surplus for June, in fact the largest for that month on record at $117 billion.
The second record was the Dow, which rallied above its all-time closing high this morning after Bernake assured investors that the central bank would be keeping stimulus measures in place.
Reuters led with this headline today, “Surprise! Huge US Budget Surplus Shatters Record”. Reuters attributed the huge surplus to, “An improving economy and tax hikes enacted earlier in the year led government receipts to rise to $287 billion, up 10 percent from a year earlier.”
Rising tax revenues, public spending cuts and big payments to the Treasury from state-backed mortgage firms helped the government take in $117 billion more last month than it paid out, the U.S. Treasury said on Thursday.
How do you take in more than you spend? Well, for starters, you generate this thing called revenue, also known as taxes, which Republicans have refused to even consider and in fact the mere mention of taxes has caused them to walk away from numerous budget deals. You might also get state-backed companies like Fannie Mae and Freddie Mac to pay back the taxpayers’ investment in them. You could also cut spending, although if you were smart and you did not hold the goal of tanking the economy for purely petty political reasons in order to punish the very people who refused to elect your party to the White House, you’d wait until the recovery was more stable before cutting spending drastically.
These factors led to the buoyant news that: “June’s surplus was the largest for that month on record.”
What will Republicans use as a hostage now that the Obama government is shattering records with its surplus? They have to find a way to make the stock market jittery again, like the last time they refused to raise the debt ceiling until they got their demands met, because the stock market is doing way too well under this Democratic President.
Stocks rallied to their all time closing high after Fed Chairman Ben Bernanke said the fed would be keeping in place the stimulus measures for the foreseeable future. Yes, the stimulus. The evil stimulus that Republicans hate is causing the US stock market to surge with confidence.
CNBC broke it down:
The Dow Jones Industrial Average rallied above its all-time closing high of 15,409.39. Most Dow components traded in positive territory, boosted by Caterpillar and Disney.
The blue-chip index’s point gain for 2013 is already greater than any year on record.
The S&P 500 was higher for a sixth-consecutive session, flirting with its record closing level of 1,669.16. The S&P 500 is now on pace for its biggest weekly gain since January.
The Nasdaq also jumped, while the Russell 2000 index hit a new all-time high for the fourth-straight session.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, slid near 14.
Sure, conservatives will scream that this isn’t really any reflection of Obama, but the truth is they scream about everything. You can’t get to a surplus without some kind of revenue. It’s basic math.
However — and here’s the bitter irony for Republicans — everything they’ve done to hinder the economic recovery, like refusing to negotiate a budget and imposing austerity upon the nation, is actually helping President Obama’s long term legacy.
In the end, a belief in government’s ability to function well is necessary if a person is going to be in charge of it. The things Republicans balked at, like increased taxes, are helping us pay down the enormous debt Republicans left us under Bush, as well as the debt incurred from the tanked Bush economy.
They can fight it all they want, but Republicans helped Obama build this legacy and it will be his legacy, not theirs.
This is a rather a fitting way of repaying them for all of the harm they’ve inflicted on the nation with their austerity for the people and corporate welfare for their masters. Although I’m quite sure the President would rather have the money going to the people who need it, even if it meant a less amazing surplus.
Ms. Jones is the co-founder/ editor-in-chief of PoliticusUSA and a member of the White House press pool.
Sarah hosts Politicus News and co-hosts Politicus Radio. Her analysis has been featured on several national radio, television news programs and talk shows, and print outlets including Stateside with David Shuster, as well as The Washington Post, The Atlantic Wire, CNN, MSNBC, The Week, The Hollywood Reporter, and more.
Sarah is a member of the Society of Professional Journalists.