David Stockman, the former director of the Office of Management and Budget in the Reagan Administration, recently wrote that industrial production in the United States has been stagnant since the end of 2007.
Mr. Stockman pointed out that the Industrial Production Index (IPI), which is defined by the Federal Reserve as a measure of "the real output of all relevant establishments in the United States regardless of ownership, excluding U.S. territories" had not increased at all from December 2007’s index of 102.26 to June 2023’s index of 102.24.
What was particularly disturbing to Stockman about this lack of improvement in industrial output over more than 15 years was that this time period was accompanied by a virtual orgy of government stimulus which saw the national debt explode from $9,229,172,659,218.00 as of Dec. 31, 2007 (see: fiscaldata.treasury.gov) to the present-day heady heights of $32,675,844,707,354.00 as of 7:59 P.M. on Aug. 2, 2023.
This represents an increase of $23,446,672,048,136.00 in the national debt or a 354% increase over that same time period.
Now, it's fair to say that this same 15-year period was wracked by both the Great Recession of 2008-2009 and the COVID-19 global pandemic of 2019-2021, both of which caused industrial activity worldwide to grind to a halt and, indeed, contract for several years.
More to the point, the IPI for December 2007 was 102.26, but it took six-and-one-half years for the IPI to recover from the financial devastation of the housing market collapse, until it finally clawed its way back to 102.26 in May 2014.
Similarly, COVID-19 caused a global shutdown that saw the IPI plunge in June 2019 from 102.49 to its nadir of 84.59 in April 2020 — a drop of 17.4% in less than a year.
However, the end of the pandemic caused industrial activity to bounce back almost as quickly so that the IPI had almost fully recovered by August 2021, as shown by that month’s measure of 100.12.
The severe contraction of the national economy in 2008 caused the federal government to engage in an unprecedented $250 billion bailout of the nation’s biggest banks as part of the Troubled Asset Relief Program (TARP), a $700 billion government program that was designed to keep both banks and manufacturers: General Motors (which received $49.5 billion) and Chrysler (which received $11.96 billion) in business.
In fact, Wells Fargo, Citigroup and JP Morgan Chase each received $25 billion as a reward for having dug themselves into extraordinarily deep holes. More than 700 other banks around the country also received government assistance under TARP.
The COVID-19 pandemic was caused by a virus purportedly originating in Wuhan, China.
The virus has to date claimed 11,740,933 deaths, as reported by the World Health Organization (WHO).
The speed with which this virus spread globally in 2019-2020 was terrifying, prompting many governments to shut down their economies and essentially confine people to their homes for months on end in order to reduce the risk of infection.
It also led to the passage of the $2.2 trillion CARES Act in 2020 and the $900 billion stimulus that was part of the Consolidated Appropriations Act of 2021, both of which were designed to help United States citizenry recover from the disastrous impact of the COVID-19 pandemic by providing a variety of payouts to individuals and businesses alike.
Not satisfied with this budget busting splurge, Congress also passed the $1.9 trillion COVID-19 relief package known as the American Rescue Plan in 2021.
It provided a variety of additional payouts and benefits to eligible recipients.
In short, these three COVID-19 relief programs saddled the U.S. with nearly five-trillion in additional debt — an amount equal to more than half of the entire national debt which had existed a decade before.
No doubt the American economy endured both a punishing recession in 2008 and a worldwide pandemic 12 years later.
Both events caused enormous economic damage and tremendous human suffering.
However, the government exercised its emergency powers to extend economic lifelines to tens of millions of vulnerable Americans.
Unfortunately, these programs also incurred enormous amounts of waste due to both the government’s haste to disburse monies as well as the almost non-existent oversight that it exercised over the distribution of those funds.
Indeed, the Associated Press (AP) concluded that at least $400 billion in COVID relief funds was stolen by thieves, thus constituting what it called the "greatest grift in U.S. history."
In short, the Great Recession and COVID-19 were extraordinary events that called for extraordinary — albeit imperfectly executed — responses.
But even if we set aside the $5 trillion in COVID-19 related programs and the $700 billion TARP program, we cannot ignore the fact that lawmakers still added an additional $16 trillion to the national debt over the past 15 years that was not caused by a national emergency but instead by their unwillingness to balance the government’s books.
To Stockman’s point, this unending deficit spending did not result in any meaningful increase in the nation’s industrial output.
Instead, it further weakened the financial wherewithal of the U.S. economy and raised additional questions internationally about the willingness of American policymakers to confront their chronic deficit spending habits.
More to the point, it showed that spending huge amounts of amount of money does not automatically result in the growth of the industrial economy.
Jefferson Hane Weaver is a transactional lawyer residing in Florida. He received his undergraduate degree in Economics and Political Science from the University of North Carolina and his J.D. and Ph.D. in International Relations from Columbia University. Dr. Weaver is the author of numerous books on varied compelling subjects. Read more of his reports — Here.
© 2025 Newsmax. All rights reserved.