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What is Obamanomics?

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  • Written By: Jessica Ellis
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Obamanomics is a term used to described the economic policy of United States President Barack Obama. Similar terms have been employed to describe the fiscal policies of previous presidents, such as Reaganomics and Bushonomics. Though the term can be simple shorthand used to refer to an overall policy concept, Obamanomics is often used as a pejorative term by political opponents of President Obama.

What Obamanomics is or isn't is quite difficult to define. While the term can be used to describe the financial policies and changes to the American economy made by President Obama during his term in office, it rarely refers to specific policies and is often used as a general term that relates the Presidency of Obama to financial effects on the nation and the global community.

Many of President Obama's decisions in his first term of office involve financial concerns, and thus can be considered under the blanket of Obamanomics. Some of these decisions include changing income tax rates for certain tax brackets, altering student loan programs, creating health care legislation, and changing the process of how fines are assessed and made when dealing with pollution. These policies can be viewed as minor or major changes that may benefit or hurt the country, depending on an individual's personal and political point of view.

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Though it is difficult to evaluate the point, plan, or effect of President Obama's fiscal policy out of context, the general guiding idea is often referred to as bottom-up economics. This means that cutting taxes, providing aid, and improving social services for the poor will help to raise the standard of living for many people. By providing services like student loans and job training, Obamanomics increases the education level, job opportunities and thus the buying power of the average citizen. This effect will in turn, according to theory, stimulate the economy by putting more money into the hands of a greater number of people.

Obamanomics differs extensively from many previous plans. In Reaganomics, for instance, the guiding principle was called the trickle-down effect, where by cutting taxes on wealthier people that own businesses and corporations, higher salaries, more jobs, and new companies could be created. This departure from previous plans has drawn serious criticism from many quarters, including from both Republicans and some Democrats. Many economists characterize Obamanomics as a moderate plan, which can quickly draw ire from the flanks of both parties.

It is important to consider the economic context in which a theory like Obamanomics is formed. When elected into office, President Obama took over a country enmeshed in two wars and deep in the fallout of a recession, real estate bust, and the collapse of several major banks. According to some experts, circumstance more than the policies or preferences of the President may be a greater influence on the developing system of fiscal policy.

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