This continuing onslaught of more government spending, borrowing and regulation will not bring the type of recovery that we should expect, but rather perpetuate an inhospitable economic climate. When we return to time-tested policies that encourage private investment, risk-taking and hiring – less confiscation of wealth, greater protection of property rights and fewer oxygen-depleting regulations – is when sustainable, long-term growth will return.

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It appears that the worst of our recent economic downturn may be behind us. 

Unfortunately, the latest economic data continue to suggest that our recovery is weaker than it otherwise should be, due to malignant federal policies. 

We and other conservative commentators have noted that all American recessions eventually come to an end, and that previous recoveries from similar downturns were much more vigorous.  Most recently, the 1981-1982 recession’s severity matched that of the 2008-2009 downturn.  Unemployment reached 10.8% in late 1982, compared to a high of 10.2% in October 2009.  But 1983 GDP growth reached 7.7%, a number far higher than consensus expectations for our anticipated 2010 rebound. 

Welcome news arrived last fall when initial third-quarter 2009 gross domestic product (GDP) numbers suggested 3.5% growth, bringing an end to the recession.  The Obama Administration naturally sought to claim credit for that upturn in order to turn the tide during our brutal winter of discontent.  The White House’s glory grab, however, ignored the already-expected 2009 upturn.  It also ignored the fact that Obama’s “stimulus” bill was not the guiding causal factor in the recoil, and merely removed dollars from present or future private use (recall the inefficient and circular cash-for-clunkers program, which destroyed assets of value and merely accelerated or postponed consumer auto purchases). 

Moreover, that initial 3.5% estimate was subsequently revised substantially downward to 2.8%, and then again last month to 2.2% - a 37% reduction. 

Emerging indicators now suggest that the Obama-Reid-Pelosi economic agenda explains our uninspiring recovery, and is retarding, not accelerating, growth. 

The worrisome signs extend far beyond sluggish GDP results, however.  According to the National Federation of Independent Businesses (NFIB), a tiny 7% of small businesses (which account for approximately 2/3 of new jobs) expect near-term expansion and the type of risk-taking necessary for sustained prosperity.  Further, only 8% of NFIB respondents expect near-term employment opportunities.  The same NFIB report also states that capital investment and expenditures have dropped to a 35-year low. 

This is not a harbinger of economic health. 

Additionally, official government reports of new job openings have dropped to an all-time low, and the rate at which Americans return from unemployed status has also hit its lowest recorded level.  Although unemployment rates improved slightly from 10.2% to 10.0% in November, this appears to result from the fact that employers have essentially pared to the bone.  As stated by The Wall Street Journal’s Mark Gongloff, “employers have nearly exhausted their supply of workers to fire.” 

That is simply not the type of rebound that one should expect at this point. 

So what explains this worrisome climate? 

According to the NFIB survey, businesses report that the current political climate stands high among the reasons for tepid recovery, even ahead of the ability to secure loans.  The survey goes on to cite “the level of uncertainty being created by government, the usual source of uncertainty for the economy.  The ‘turbulence’ created when Congress is in session is often debilitating, this year being one of the worst.” 

A consideration of what 2010 promises from the White House and Congress justifies this trepidation and inability to expand and hire. 

Proposed health care legislation that hangs on by a mere thread will discourage hiring and expansion by increasing costs of employment.  Punishing and scientifically-suspect global warming taxes (even as many parts of America experience record snowfall and cold) will stifle growth by increasing the costs of production.  Legislation demanded by labor unions will eliminate the secret ballot in workplace elections, allow government bureaucrats to dictate employment costs and working conditions upon businesses and drive jobs to friendlier overseas locales. 

And now, President Obama has proposed a third “stimulus” plan, which will merely remove dollars from the private economy (whether through borrowing or taxation) and redirect them toward favored political interests. 

This continuing onslaught of more government spending, borrowing and regulation will not bring the type of recovery that we should expect, but rather perpetuate an inhospitable economic climate.  When we return to time-tested policies that encourage private investment, risk-taking and hiring – less confiscation of wealth, greater protection of property rights and fewer oxygen-depleting regulations – is when sustainable, long-term growth will return.