The U.S. economy created only 142,000 jobs in August, down from 212,000 in July, indicating the economy significantly slowed this summer.

Job creation is well below the pace needed to reemploy all the workers displaced during the financial crisis—the economy is in crisis!

Although official GDP estimates indicate the economy expanded in the second quarter at a torrid pace—4.2. percent—much of that was inventory build, as consumer spending continued to drag along at a nonplus pace and capital investment, especially in manufacturing, remains subpar.

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Third quarter growth is likely in the range of 2 percent, and the Obama administration spin doctors will have a tough time selling these jobs data as anything but bad news.

Simply put, the administration’s big spending stimulus policies and the Fed’s obsession with pumping money into the moribund New York financial industry have failed.

Also, now Americans are seeing the real cost of ObamaCare health care subsidies. Employer mandates are not much good to working families if no one in the family is working.

The official jobless rate is down to 6.1 percent but real unemployment is closer to 18 percent, because so many prime aged adults are sitting out the party. For example, one in six adult males between the ages of 25 and 54 has no job, and may have simply quit looking thanks to “compassionate” government policies that reward able bodied men and women to sit at home and watch  ESPN NFL reruns or "The View."

Since 2000, Congress has beefed up the earned income tax credit, and expanded programs providing direct benefits to low and middle income workers, including ObamaCare and Medicaid, food stamps, and rent and mortgage assistance.

Those buy votes but do little to encourage work.

Benefits phase down as family incomes rise, and often tax additional income as much as 50 percent. Consequently, government benefits penalize work and encourage one partner in two adult households to be idle.

Also, those programs offer incentives for single people to work only part-time and contribute to skills shortage.

With millions of young college graduates unable to land a professional job and start a career, the president has implemented irresponsible federal student loan policies. And unscrupulous university presidents exploit young people by peddling graduate programs that promise rewarding careers but only deliver a lifetime of debt.

Student loans take disgruntled college graduates off the streets, lower the official unemployment rate and deliver electoral majorities for Democrats but undermine future growth. Simply, too many folks in their late 20s are stuck in dead end jobs, burdened with crippling debt and unable to buy a home or comfortably start families.

The root cause of the jobs crisis is chronically anemic growth, whose sources candidate Obama promised to address in 2008 but has forgotten.

These include the purposefully undervalued Chinese and Japanese currencies, which cheapen imports, siphon off demand for American-made products and destroy factory jobs; federal restrictions on offshore oil and gas development, which unnecessarily perpetuate U.S. oil imports and finance terrorism; business regulations more burdensome than necessary to accomplish worthy objectives, which create prestigious jobs for political supporters and create monopolies for campaign contributors; and a tax structure ranked one of the worst in the world for encouraging sound business decisions and supporting international competitiveness.

A second term president should be a statesman looking to the long-term security and prosperity of the American people.

Instead, Obama continues to campaign, blames his predecessor and congress for his disappointments, and will leave Americans poorer and less safe in the bargain.

Peter Morici served as Chief Economist at the U.S. International Trade Commission from 1993 to 1995. He is an economist and professor at the Smith School of Business, University of Maryland, and a widely published columnist. He is the five time winner of the MarketWatch best forecaster award. Follow him on Twitter @PMorici1.