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I'll give anyone $1.50 if they can tell me what the fuck he's talking about.
Politics and the US Economy
- Thread starter RightField
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I'll give anyone $1.50 if they can tell me what the fuck he's talking about.
Frisco_Slug_Esq
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It's rerecovery summer...
RightField
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An Unemployment Catastrophe
By Rich Lowry
http://www.realclearpolitics.com/articles/2011/06/10/an_unemployment_catastrophe_110159.html
Pres. Barack Obama is given to cute vehicular metaphors about the state of the economy. We were "in a ditch," then got out and hit a "bump in the road." This is studiously folksy. It also vastly understates the nature of our situation.
President Obama is presiding over an unspooling social catastrophe in the form of unemployment, and especially long-term unemployment. For all those people who are chronically unemployed, it's as if they have been hit by the proverbial car and then backed over by it again and again.
According to the Wall Street Journal, nearly a third of the unemployed - 4 million people - have been out of work for more than a year. Almost half of the unemployed have been out of a job for more than six months, a figure higher than during the Great Depression. They may wonder when it was exactly that we got out of "the ditch."
The statistics tell a dire, but incomplete, story. We were built to work. When we want to and can't, it is an assault on our very personhood. A Rutgers University study of the unemployed a few years ago found, unsurprisingly, "that they experienced anxiety, helplessness, depression, stress and sleeping problems after losing their jobs."
The insidious thing about long-term unemployment is that it builds on itself - the longer you are without a job, the harder it is to get one. The Bureau of Labor Statistics finds that the chance of someone unemployed for less than five weeks finding a job in the next month is about 30 percent. For someone unemployed 27 weeks or more, it's just 10 percent.
For an economy so famously on the mend that it experienced "recovery summer" last year, the trend has been in the wrong direction. A Pew study notes that the number of people unemployed for a year or more increased by 25 percent from December 2009 to December 2010.
The job market is now segregated by levels of educational attainment, but long-term joblessness disregards schooling. Once they are unemployed, about 30 percent of college graduates, high-school graduates, and high-school dropouts are out of a job for more than a year. It doesn't matter what sector of the economy they come from. "More than 20 percent of unemployed workers in every non-agricultural industry," Pew writes, "have been out of work for a year or more."
So here is a wide-ranging blight that affects not just people's incomes right now, but their sense of self-respect and their futures. Yet it's often been an afterthought for the president. He has repeatedly said he was going to "pivot to jobs." How could he ever have pivoted off of them? To paraphrase Rahm Emanuel, a crisis is a terrible thing not to address.
Given the history of recessions driven by financial meltdowns, it was inevitable we'd have a lingering unemployment problem. All the more reason to gear every possible policy toward augmenting job growth. Once he passed his ramshackle social-spending bill called the "stimulus," though, Obama devoted most of his attention to re-engineering key sectors of the American economy - health care, finance, energy - regardless of the economic consequences.
His economic measures were supposed to be timely and temporary, but they either didn't work or were temporary indeed. We've been left with a fragile economy in the near term, while in the longer term a growing debt, unsustainable entitlements, and a senseless tax code - all of which Obama either hasn't addressed or has made worse - threaten the vitality of the country.
Democrats may want next year's election to be about Medicare; Republicans may have thought it would be about debt. But if current conditions hold, it will instead be about unemployment and the associated economic travails of stagnant wages, falling home values, and rising prices. There is no more natural theme in our politics than "putting America back to work." Next year, Obama could be vulnerable to it. It's the flashing red light of his reelection.
By Rich Lowry
http://www.realclearpolitics.com/articles/2011/06/10/an_unemployment_catastrophe_110159.html
Pres. Barack Obama is given to cute vehicular metaphors about the state of the economy. We were "in a ditch," then got out and hit a "bump in the road." This is studiously folksy. It also vastly understates the nature of our situation.
President Obama is presiding over an unspooling social catastrophe in the form of unemployment, and especially long-term unemployment. For all those people who are chronically unemployed, it's as if they have been hit by the proverbial car and then backed over by it again and again.
According to the Wall Street Journal, nearly a third of the unemployed - 4 million people - have been out of work for more than a year. Almost half of the unemployed have been out of a job for more than six months, a figure higher than during the Great Depression. They may wonder when it was exactly that we got out of "the ditch."
The statistics tell a dire, but incomplete, story. We were built to work. When we want to and can't, it is an assault on our very personhood. A Rutgers University study of the unemployed a few years ago found, unsurprisingly, "that they experienced anxiety, helplessness, depression, stress and sleeping problems after losing their jobs."
The insidious thing about long-term unemployment is that it builds on itself - the longer you are without a job, the harder it is to get one. The Bureau of Labor Statistics finds that the chance of someone unemployed for less than five weeks finding a job in the next month is about 30 percent. For someone unemployed 27 weeks or more, it's just 10 percent.
For an economy so famously on the mend that it experienced "recovery summer" last year, the trend has been in the wrong direction. A Pew study notes that the number of people unemployed for a year or more increased by 25 percent from December 2009 to December 2010.
The job market is now segregated by levels of educational attainment, but long-term joblessness disregards schooling. Once they are unemployed, about 30 percent of college graduates, high-school graduates, and high-school dropouts are out of a job for more than a year. It doesn't matter what sector of the economy they come from. "More than 20 percent of unemployed workers in every non-agricultural industry," Pew writes, "have been out of work for a year or more."
So here is a wide-ranging blight that affects not just people's incomes right now, but their sense of self-respect and their futures. Yet it's often been an afterthought for the president. He has repeatedly said he was going to "pivot to jobs." How could he ever have pivoted off of them? To paraphrase Rahm Emanuel, a crisis is a terrible thing not to address.
Given the history of recessions driven by financial meltdowns, it was inevitable we'd have a lingering unemployment problem. All the more reason to gear every possible policy toward augmenting job growth. Once he passed his ramshackle social-spending bill called the "stimulus," though, Obama devoted most of his attention to re-engineering key sectors of the American economy - health care, finance, energy - regardless of the economic consequences.
His economic measures were supposed to be timely and temporary, but they either didn't work or were temporary indeed. We've been left with a fragile economy in the near term, while in the longer term a growing debt, unsustainable entitlements, and a senseless tax code - all of which Obama either hasn't addressed or has made worse - threaten the vitality of the country.
Democrats may want next year's election to be about Medicare; Republicans may have thought it would be about debt. But if current conditions hold, it will instead be about unemployment and the associated economic travails of stagnant wages, falling home values, and rising prices. There is no more natural theme in our politics than "putting America back to work." Next year, Obama could be vulnerable to it. It's the flashing red light of his reelection.
Frisco_Slug_Esq
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Now he doesn't want us to change horses.
A perfect metaphor for the goals of his economic policy; from car to horse, from engine to windmill, from electricity to "magic."
__________________
A massive campaign must be launched to restore a high-quality environment in North America and to de-develop the United States...,
John P. Holdren
White House Office of Science and Technology Director
A perfect metaphor for the goals of his economic policy; from car to horse, from engine to windmill, from electricity to "magic."
__________________
A massive campaign must be launched to restore a high-quality environment in North America and to de-develop the United States...,
John P. Holdren
White House Office of Science and Technology Director
JenAltArmy
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Sean fails to see that obama is creating more messes
mercury14
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RightField
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I'd help elect Mr. Ed the talking horse if he outlined an economic growth plan that made sense. Conservatives have a plan, a governing philosophy and a long history of making good choices for the country and therefore, the people we put up for election only need to know the plan and govern by it.
The left, on the other hand, has no governing philosophy other than give taxpayer/government handouts to the people who give them donations and so they need to run candidates that exude confidence and charisma....because they have nothing else. How's that hope and change thing working for ya?
Did you get your Obamawaiver yet? I'm not going to be eligible for one since I can't bring myself to send in a campaign donation to him.
RightField
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Uncertainty Is Not the Problem
It's not the policies we don't know about that are retarding the economy. It's the bad policies we have..
Wall Street Journal - Today
By CLIFFORD S. ASNESS
Many commentators blame our continuing economic woes on "uncertainty." They allege that recent and anticipated dramatic policy changes make business planning difficult, and that this is retarding growth and employment. This view is not wrong—but our main problem is not the uncertainty surrounding new policies. It is the policies.
Consider two uncertain situations. In the first, our business is waiting to find out the location decision for a customer's new industrial plant, so we know where to build our new supply facility. Until this is resolved, we will not invest in building nor will we hire staff. In the second situation, we know we are in for some pain, someone is going to make our business less productive and profitable, but we do not yet know how much. Planning is marginally more difficult, but the main reason we will not grow in the second situation is that investment is less attractive regardless of the precise resolution of uncertainty.
In the first case, uncertainty is the obstacle. Once it is resolved, we invest. In the second case, uncertainty is a small part of the problem. The large part is simply that bad things are happening. The day we are told "well, it's exactly a 30% hit to productivity and profits," all uncertainty is resolved—yet we will still not invest or hire.
The Obama administration's economic policies have defenders. For instance, New York Times columnist Paul Krugman will tell you the stimulus helped, and we didn't have enough. I disagree. I will tell you the stimulus was wasteful and politicized, and the American people, not being idiots, know they will have to pay for it eventually. People adjust their plans to account for the additional debt heaped on them, meaning lower investment and consumption.
I will also tell you Dodd-Frank, with its enshrining of too big to fail and its large regulatory costs, is an albatross. I will add that ObamaCare's gigantic new entitlement has hurt. I will throw in that massive additional regulatory costs being foisted upon business is an extra drain on the economy. I would definitely say that the disregard for law during the auto-company "bankruptcies" has long-lasting negative effects. I'd even throw in that the president's demonization of business has been harmful. Finally, I'd say the expected tax increases, even if only on the "super rich"—defined as anyone still gainfully employed—weigh upon us. So what does all this have to do with uncertainty and whether that's our problem? Consider a hypothetical.
Imagine, right now, we passed a giant additional wasteful stimulus. Imagine all the rules of Dodd-Frank were revealed and are even more stifling than we expected. Imagine we doubled the new health-care entitlement and expanded government control of health care more than previously predicted, but set all the details today. Imagine assorted government agencies passed more burdensome regulations than we anticipated, increasing both the cost of doing business and the drag of crony capitalism. But all uncertainty was resolved by passing them today.
Next imagine that the president promised, in no "uncertain" terms, to up his hectoring of business in perpetuity. Further, imagine we passed higher taxes going forward on everyone but, again, we settled it for certain right now. Finally, imagine we committed ourselves to no entitlement reform ever. Is all this good or bad? Well, uncertainty has been eliminated, but it sounds pretty darn bad.
Now let's go the opposite way and consider good policies surrounded by uncertainty. Imagine we will move from here toward free-market health-care reforms appropriate for a free people. We will reduce government spending and our debt, letting people spend their own money as they see fit. We will lower taxes across the board for individuals and businesses, and we'll reduce and simplify deductions.
Imagine even more that we'll make grown-up decisions and reform entitlements to levels we might possibly afford. Now imagine that while we know the direction of each of these policy changes, alas, we are very uncertain about how far these wonderful ideas will go. Imagine this uncertainty is even higher than it is around today's bad policies. Would these changes, uncertainty and all, make things better or worse? Well, it seems pretty clear that should these changes occur in any nontrivial fashion, you would have to duck to get out of the way of the ensuing economic boom, regardless of the uncertainty.
Focusing on "uncertainty" takes our eyes off the ball. We should not seek clarity about the many new drags on our economy. We should seek to have the administration cease and desist, then reverse them.
Mr. Asness is the managing and founding principal of AQR Capital Management.
It's not the policies we don't know about that are retarding the economy. It's the bad policies we have..
Wall Street Journal - Today
By CLIFFORD S. ASNESS
Many commentators blame our continuing economic woes on "uncertainty." They allege that recent and anticipated dramatic policy changes make business planning difficult, and that this is retarding growth and employment. This view is not wrong—but our main problem is not the uncertainty surrounding new policies. It is the policies.
Consider two uncertain situations. In the first, our business is waiting to find out the location decision for a customer's new industrial plant, so we know where to build our new supply facility. Until this is resolved, we will not invest in building nor will we hire staff. In the second situation, we know we are in for some pain, someone is going to make our business less productive and profitable, but we do not yet know how much. Planning is marginally more difficult, but the main reason we will not grow in the second situation is that investment is less attractive regardless of the precise resolution of uncertainty.
In the first case, uncertainty is the obstacle. Once it is resolved, we invest. In the second case, uncertainty is a small part of the problem. The large part is simply that bad things are happening. The day we are told "well, it's exactly a 30% hit to productivity and profits," all uncertainty is resolved—yet we will still not invest or hire.
The Obama administration's economic policies have defenders. For instance, New York Times columnist Paul Krugman will tell you the stimulus helped, and we didn't have enough. I disagree. I will tell you the stimulus was wasteful and politicized, and the American people, not being idiots, know they will have to pay for it eventually. People adjust their plans to account for the additional debt heaped on them, meaning lower investment and consumption.
I will also tell you Dodd-Frank, with its enshrining of too big to fail and its large regulatory costs, is an albatross. I will add that ObamaCare's gigantic new entitlement has hurt. I will throw in that massive additional regulatory costs being foisted upon business is an extra drain on the economy. I would definitely say that the disregard for law during the auto-company "bankruptcies" has long-lasting negative effects. I'd even throw in that the president's demonization of business has been harmful. Finally, I'd say the expected tax increases, even if only on the "super rich"—defined as anyone still gainfully employed—weigh upon us. So what does all this have to do with uncertainty and whether that's our problem? Consider a hypothetical.
Imagine, right now, we passed a giant additional wasteful stimulus. Imagine all the rules of Dodd-Frank were revealed and are even more stifling than we expected. Imagine we doubled the new health-care entitlement and expanded government control of health care more than previously predicted, but set all the details today. Imagine assorted government agencies passed more burdensome regulations than we anticipated, increasing both the cost of doing business and the drag of crony capitalism. But all uncertainty was resolved by passing them today.
Next imagine that the president promised, in no "uncertain" terms, to up his hectoring of business in perpetuity. Further, imagine we passed higher taxes going forward on everyone but, again, we settled it for certain right now. Finally, imagine we committed ourselves to no entitlement reform ever. Is all this good or bad? Well, uncertainty has been eliminated, but it sounds pretty darn bad.
Now let's go the opposite way and consider good policies surrounded by uncertainty. Imagine we will move from here toward free-market health-care reforms appropriate for a free people. We will reduce government spending and our debt, letting people spend their own money as they see fit. We will lower taxes across the board for individuals and businesses, and we'll reduce and simplify deductions.
Imagine even more that we'll make grown-up decisions and reform entitlements to levels we might possibly afford. Now imagine that while we know the direction of each of these policy changes, alas, we are very uncertain about how far these wonderful ideas will go. Imagine this uncertainty is even higher than it is around today's bad policies. Would these changes, uncertainty and all, make things better or worse? Well, it seems pretty clear that should these changes occur in any nontrivial fashion, you would have to duck to get out of the way of the ensuing economic boom, regardless of the uncertainty.
Focusing on "uncertainty" takes our eyes off the ball. We should not seek clarity about the many new drags on our economy. We should seek to have the administration cease and desist, then reverse them.
Mr. Asness is the managing and founding principal of AQR Capital Management.
Frisco_Slug_Esq
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Good article...
RightField
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July 5, 2011
Politics Versus Reality
By Thomas Sowell
It is hard to understand politics if you are hung up on reality. Politicians leave reality to others. What matters in politics is what you can get the voters to believe, whether it bears any resemblance to reality or not.
Not only among politicians, but also among much of the media, and even among some of the public, the quest is not for truth about reality but for talking points that fit a vision or advance an agenda. Some seem to see it as a personal contest about who is best at fencing with words.
The current controversy over whether to deal with our massive national debt by cutting spending, or whether instead to raise tax rates on "the rich," is a classic example of talking points versus reality.
Most of those who favor simply raising tax rates on "the rich" -- or who say that we cannot afford to allow the Bush "tax cuts for the rich" to continue -- show not the slightest interest in the history of what has actually happened when tax rates were raised to high levels on "the rich," as compared to what has actually happened when there have been "tax cuts for the rich."
As far as such people are concerned, those questions have already been settled by their talking points. Why confuse the issue by digging into empirical evidence about what has actually happened when one policy or the other was followed?
The political battles about whether to have high tax rates on people in high income brackets or to instead have "tax cuts for the rich" have been fought out in at least four different administrations in the 20th century -- under Presidents Calvin Coolidge, John F. Kennedy, Ronald Reagan and George W. Bush.
The empirical facts are there, but they mean nothing if people don't look at them, and instead rely on talking points.
The first time this political battle was fought, during the Coolidge administration, the tax-cutters won. The data show that "the rich" supplied less tax revenue to the government when the top income tax rate was 73 percent in 1921 than they supplied after the income tax rate was reduced to 24 percent in 1925.
Because high tax rates can easily be avoided, both then and now, "the rich" were much less affected by high tax rates than was the economy and the people who were looking for jobs. After the Coolidge tax cuts, the increased economic activity led to unemployment rates that ranged from a high of 4.2 percent to a low of 1.8 percent.
But that is only a fact about reality -- and, for many, reality has no such appeal as talking points.
The same preference for talking points, and the same lack of interest in digging into the facts about realities, prevails today in discussions of whether to have a government-controlled medical system.
Since there are various countries, such as Canada and Britain, that have the kind of government-controlled medical systems that some Americans advocate, you might think that there would be great interest in the quality of medical care in these countries.
The data are readily available as to how many weeks or months people have to wait to see a primary care physician in such countries, and how many additional weeks or months they have to wait after they are referred to a surgeon or other specialist. There are data on how often their governments allow patients to receive the latest pharmaceutical drugs, as compared to how often Americans use such advanced medications.
But supporters of government medical care show virtually no interest in such realities. Their big talking point is that the life expectancy in the United States is not as long as in those other countries. End of discussion, as far as they are concerned.
They have no interest in the reality that medical care has much less effect on death rates from homicide, obesity, and narcotics addiction than it has on death rates from cancer or other conditions that doctors can do something about. Americans survive various cancers better than people anywhere else. Americans also get to see doctors much sooner for medical treatment in general.
Talking points trump reality in political discussions of many other issues, from gun control to rent control. Reality simply does not have the pizzazz of clever talking points.
Politics Versus Reality
By Thomas Sowell
It is hard to understand politics if you are hung up on reality. Politicians leave reality to others. What matters in politics is what you can get the voters to believe, whether it bears any resemblance to reality or not.
Not only among politicians, but also among much of the media, and even among some of the public, the quest is not for truth about reality but for talking points that fit a vision or advance an agenda. Some seem to see it as a personal contest about who is best at fencing with words.
The current controversy over whether to deal with our massive national debt by cutting spending, or whether instead to raise tax rates on "the rich," is a classic example of talking points versus reality.
Most of those who favor simply raising tax rates on "the rich" -- or who say that we cannot afford to allow the Bush "tax cuts for the rich" to continue -- show not the slightest interest in the history of what has actually happened when tax rates were raised to high levels on "the rich," as compared to what has actually happened when there have been "tax cuts for the rich."
As far as such people are concerned, those questions have already been settled by their talking points. Why confuse the issue by digging into empirical evidence about what has actually happened when one policy or the other was followed?
The political battles about whether to have high tax rates on people in high income brackets or to instead have "tax cuts for the rich" have been fought out in at least four different administrations in the 20th century -- under Presidents Calvin Coolidge, John F. Kennedy, Ronald Reagan and George W. Bush.
The empirical facts are there, but they mean nothing if people don't look at them, and instead rely on talking points.
The first time this political battle was fought, during the Coolidge administration, the tax-cutters won. The data show that "the rich" supplied less tax revenue to the government when the top income tax rate was 73 percent in 1921 than they supplied after the income tax rate was reduced to 24 percent in 1925.
Because high tax rates can easily be avoided, both then and now, "the rich" were much less affected by high tax rates than was the economy and the people who were looking for jobs. After the Coolidge tax cuts, the increased economic activity led to unemployment rates that ranged from a high of 4.2 percent to a low of 1.8 percent.
But that is only a fact about reality -- and, for many, reality has no such appeal as talking points.
The same preference for talking points, and the same lack of interest in digging into the facts about realities, prevails today in discussions of whether to have a government-controlled medical system.
Since there are various countries, such as Canada and Britain, that have the kind of government-controlled medical systems that some Americans advocate, you might think that there would be great interest in the quality of medical care in these countries.
The data are readily available as to how many weeks or months people have to wait to see a primary care physician in such countries, and how many additional weeks or months they have to wait after they are referred to a surgeon or other specialist. There are data on how often their governments allow patients to receive the latest pharmaceutical drugs, as compared to how often Americans use such advanced medications.
But supporters of government medical care show virtually no interest in such realities. Their big talking point is that the life expectancy in the United States is not as long as in those other countries. End of discussion, as far as they are concerned.
They have no interest in the reality that medical care has much less effect on death rates from homicide, obesity, and narcotics addiction than it has on death rates from cancer or other conditions that doctors can do something about. Americans survive various cancers better than people anywhere else. Americans also get to see doctors much sooner for medical treatment in general.
Talking points trump reality in political discussions of many other issues, from gun control to rent control. Reality simply does not have the pizzazz of clever talking points.
Well, politics aside, I think we’re overwhelmed with statistics and data (even if folks in this forum aren’t particularly positivist). There are a number of left-leaning economists who argue the same thing from the opposite side. If only all data led to a single answer!
Torture numbers, and they'll confess to anything. ~Gregg Easterbrook
The average human has one breast and one testicle. ~Des McHale
Torture numbers, and they'll confess to anything. ~Gregg Easterbrook
The average human has one breast and one testicle. ~Des McHale
Last edited:
RightField
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JULY 27, 2011.
The Antidote for Socialism
We'll have to wait for 2012, because this administration won't administer it..
By PETE DU PONT
Last year I wrote that the enactment of ObamaCare meant "the Europeanization of America is coming to pass, for individual choice and opportunity are being replaced by statism." That law is transferring 17% of our national economy from the marketplace to full control and regulation by the federal government.
And that is just part of the problem. Over the past three years, our nation's economy has become more and more like some of the fragile and overextended statist European economies. The federal debt held by the public as a share of GDP was 40.3% in 2008, 53.5% in 2009, and 62.2% in 2010, and it is estimated at 72% this fiscal year. Everyone can agree that we must change our policies before it is too late, so that we do not end up like Greece or Italy.
But things are looking bleak. While Standard & Poor's and Moody's threaten our nation's credit ratings over our level of debt, one smaller ratings agency has already lowered it. Egan-Jones Ratings Co. downgraded the U.S sovereign debt from triple-A to double-A plus, understanding that the lack of spending control is an essential challenge to our economy in the future. S&P's and Moody's may eventually come to similar conclusions.
All of which suggests it may be too late already. Earlier this month Dan Henninger quoted Robert Lucas, a Nobel laureate in economics, who speculated that "by imitating European policies on labor markets, welfare and taxes," the U.S. has "chosen a new, lower GDP trend." These policies look much like Europe over the past few decades--or America in the 1930s.
As Mr. Lucas points out, in the first 70 years of the 20th century European and American economic growth increased together. But starting in the 1970s, Europe's growth lagged due to larger welfare-state costs and much higher taxes. The Obama administration has put America on a similar trajectory.
How do we get America away from European-style socialism? We can all agree that the debt ceiling needs to be raised, for we cannot default and there is not enough we can immediately cut to stay under the current limit
We can also agree that it would be harmful to the economy to focus on increased tax revenues to try and dig us out of the economic hole. Raising tax rates in a counterproductive attempt to raise more revenues would depress economic growth and hurt any chance of a significant increase in jobs, especially since the new taxes would fall on employers who are just beginning to feel the costs of ObamaCare, not to mention a bevy of other new and threatened regulations.
Republicans in the House hoped the debt ceiling negotiation process would have been a chance to reset the trajectory of huge increases in government spending. But it is not likely to happen, for the president will not move enough to fix our worsening financial position. That means the 2012 election is the most likely opportunity to change America's fiscal policies.
So the public policy results of the next election must be business and individual tax reform—lower rates on a flatter and broader base, repeal of ObamaCare, and reform of entitlement programs (slowly raising the Social Security retirement age, adding in block grants to the states for their own Medicaid rules, etc.). Add in the elimination of farm and "green" subsidies like ethanol,continue banning earmarks, and get federal spending down to 20 percent of GDP.
None of these policy changes will be possible with President Obama in the White House or Democrats in control of the Senate. America needs new political leadership to get our economy back on track, leadership in the hands of those willing to actually make the basic decisions needed. We need the kind of leaders who made America great in the last century so that it can remain successful in this one.
The Antidote for Socialism
We'll have to wait for 2012, because this administration won't administer it..
By PETE DU PONT
Last year I wrote that the enactment of ObamaCare meant "the Europeanization of America is coming to pass, for individual choice and opportunity are being replaced by statism." That law is transferring 17% of our national economy from the marketplace to full control and regulation by the federal government.
And that is just part of the problem. Over the past three years, our nation's economy has become more and more like some of the fragile and overextended statist European economies. The federal debt held by the public as a share of GDP was 40.3% in 2008, 53.5% in 2009, and 62.2% in 2010, and it is estimated at 72% this fiscal year. Everyone can agree that we must change our policies before it is too late, so that we do not end up like Greece or Italy.
But things are looking bleak. While Standard & Poor's and Moody's threaten our nation's credit ratings over our level of debt, one smaller ratings agency has already lowered it. Egan-Jones Ratings Co. downgraded the U.S sovereign debt from triple-A to double-A plus, understanding that the lack of spending control is an essential challenge to our economy in the future. S&P's and Moody's may eventually come to similar conclusions.
All of which suggests it may be too late already. Earlier this month Dan Henninger quoted Robert Lucas, a Nobel laureate in economics, who speculated that "by imitating European policies on labor markets, welfare and taxes," the U.S. has "chosen a new, lower GDP trend." These policies look much like Europe over the past few decades--or America in the 1930s.
As Mr. Lucas points out, in the first 70 years of the 20th century European and American economic growth increased together. But starting in the 1970s, Europe's growth lagged due to larger welfare-state costs and much higher taxes. The Obama administration has put America on a similar trajectory.
How do we get America away from European-style socialism? We can all agree that the debt ceiling needs to be raised, for we cannot default and there is not enough we can immediately cut to stay under the current limit
We can also agree that it would be harmful to the economy to focus on increased tax revenues to try and dig us out of the economic hole. Raising tax rates in a counterproductive attempt to raise more revenues would depress economic growth and hurt any chance of a significant increase in jobs, especially since the new taxes would fall on employers who are just beginning to feel the costs of ObamaCare, not to mention a bevy of other new and threatened regulations.
Republicans in the House hoped the debt ceiling negotiation process would have been a chance to reset the trajectory of huge increases in government spending. But it is not likely to happen, for the president will not move enough to fix our worsening financial position. That means the 2012 election is the most likely opportunity to change America's fiscal policies.
So the public policy results of the next election must be business and individual tax reform—lower rates on a flatter and broader base, repeal of ObamaCare, and reform of entitlement programs (slowly raising the Social Security retirement age, adding in block grants to the states for their own Medicaid rules, etc.). Add in the elimination of farm and "green" subsidies like ethanol,continue banning earmarks, and get federal spending down to 20 percent of GDP.
None of these policy changes will be possible with President Obama in the White House or Democrats in control of the Senate. America needs new political leadership to get our economy back on track, leadership in the hands of those willing to actually make the basic decisions needed. We need the kind of leaders who made America great in the last century so that it can remain successful in this one.
RightField
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Yep. Good stuff too.
mercury14
Pragmatic Metaphysician
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If you like reading biased articles full of predictable spin then yeah, guess so.
Why do you you do this?
RightField
Literotica Guru
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Because someone has to let people know that there's a better way and it's certainly not you.
mercury14
Pragmatic Metaphysician
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Right wing extremist spin factories will show us the way? Even though they're outed as liars all the time?
RightField
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The democrats are the ones who lie and spin all the time. Most recently, Obama says he wants a "balanced" approach which means to him....add immediate new taxes and provide small tax reductions far off in the future long after he's gone and subject to later Presidents and congresses.
It means fixing the "assumptions" so that the CBO rates it as only costing an additional $T, but later, after the CBO chief is out of office and using "real" assumptions, giving it a new rating of $2.7T.
It means running on a plank that the Patriot act was "evil" and "counter to the Constitution" and something that should land Bush in jail.....and then after the election quietly renewing it.
It means telling the American people that we need a "stimulus" that cost more that the cost of the wars up to that point that was full of shovel-ready construction jobs when there were almost none in the bill and it was instead and effort to prop up and support government unions which given to him so generously during the campaign.
Close gitmo?
Obamawaivers?
8% unemployment maximum?
Look at yourself. Is your support for the dems because that's where you get your paycheck? Is it that you have a desire to tell everyone what's good for them and how they should feel? You delegitimize any thoughts other than your own (see above) so is your position that no one is allowed an opinion different than yours and you get to tell people how they're allowed to feel? It sounds like a typical democrat and just the type of thing we see from this administration and just the type of thing that we vote out. I'd rather have freedom and leave self-rightious clerks in positions in society where they don't have authority over my life....even if they feel they "deserve" it. Give me freedom or give me death!
Last edited:
Frisco_Slug_Esq
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The economy is a Wynn-Wynn for Obama and merc...
Did you see the Alabama miner that went "Atlas Shrugged" in Alabama?
It's at the Blaze...
Did you see the Alabama miner that went "Atlas Shrugged" in Alabama?
It's at the Blaze...
Frisco_Slug_Esq
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You know what we need?
A $2 trillion stimulus and another round of Queen Easingbeth...
__________________
I'm Hungary for some French-fried €PIIGS!
A_J, the Incredulous
A $2 trillion stimulus and another round of Queen Easingbeth...
__________________
I'm Hungary for some French-fried €PIIGS!
A_J, the Incredulous
Frisco_Slug_Esq
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Within a few months of Harry Reid pronouncing SS secure and well funded for decades to come, Obama went out and lied about getting social security checks out to seniors just to create a panic and a crises that they "could take advantage of..."
It's no wonder the stock market dropped like a rock when the Marxist was elected.
And you people who get pissed as hell at him being called a Marxist, read his book. When you are done, show us the part where he denounced Marxism and announced his conversion to something else.
Even outside of his book. You know Mein Kampf sold a lot of copies, but no one really read it and took it seriously either, until it was too fucking late...
RobDownSouth
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Derp!
Will do, AJ! Just as soon as you show us in his book where he embraced Marxism!
Will do, AJ! Just as soon as you show us in his book where he embraced Marxism!
Frisco_Slug_Esq
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You haven't even read it...
I've even posted the link to an article from one of his buddies about Obama's Marxism as a not so young man at Occidental, a known hotbed of Marxism.
That makes you willfully ignorant, but hey, a lot of Germans never read Mein Kampf either (but the Muslim Brotherhood did).
Does Arizona still begin with a consonant?
Now you can counter with a racial/incestual shot at my daughter...
http://forum.literotica.com/showthread.php?t=745068
I've even posted the link to an article from one of his buddies about Obama's Marxism as a not so young man at Occidental, a known hotbed of Marxism.
That makes you willfully ignorant, but hey, a lot of Germans never read Mein Kampf either (but the Muslim Brotherhood did).
Does Arizona still begin with a consonant?
Now you can counter with a racial/incestual shot at my daughter...
http://forum.literotica.com/showthread.php?t=745068
RightField
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10 Reasons Why Even American Liberals Should Root for the GOP
By Larry Elder
RealClearPolitics
Today.
1) Incredibly weak recovery: President Barack Obama's tax/spend/regulation policy -- "stimulus"; continuation of TARP; bank, insurance company and auto industry bailouts; "quantitative easing" (aka the printing of money); cash for clunkers; minimum wage hikes; new regulatory rules on businesses; tripling of the deficit; addition of $4 trillion to the debt -- failed miserably to produce jobs and grow the economy at the historical rate expected after a deep recession.
2) ObamaCare: President Barack Obama promised it would "bend the cost curve" and that "if you like your doctor, you will be able to keep your doctor. If you like your health care plan, you will be able to keep your health care plan." The chief Medicare actuary said neither of those claims is true. Two-thirds of doctors believe that ObamaCare will lower the quality of health care.
3) Bogus Financial Crisis Inquiry Commission: Comprised of six Democrats and four Republicans, the commission issued a majority report (with the Republicans dissenting) that blamed Wall Street greed. "Reckless Endangerment," a new book on the financial crisis co-authored by a New York Times columnist/business and financial editor, blames the central role played by Fannie Mae and Freddie Mac, as well as government policy that pressured banks into relaxing lending standards so that the "underrepresented" could buy homes they could not afford.
One of the FCIC's commissioners and its chief investigator both work for a major law firm that is suing a number of Wall Street players. The two stand to benefit financially from the commission's Wall-Street-is-the-bad-guy conclusion. Sen. Harry Reid, D-Nev., who recommended a commissioner in question, now claims he was unaware of his tie to the law firm. The commission chairman, Democrat Phil Angelides -- who received $225,000 in campaign donations from the same law firm -- works for an offshore hedge fund that shorted mortgage-backed securities just before the crisis.
4) Texas justice vs. "Viva Mexico": The Obama administration unsuccessfully filed a court action to stop Texas' planned execution of a Mexican illegal alien found guilty of brutally raping, torturing and murdering a 16-year-old girl. The U.S. Justice Department argued that as an illegal alien the accused should have been advised that he had a right to go to the Mexican consultant to obtain an attorney. Since the accused didn't reveal he was an illegal alien when arrested, the Obama administration sued Texas for not asking the accused about his status. Texas executed the rapist/murderer, who right before the lethal injection, reportedly shouted, "Viva Mexico." Meanwhile, the administration obtained an injunction against Arizona to prevent law enforcement, during a lawful stop, from inquiring about legal status.
5) Libya: Against the advice of the top lawyer in the Pentagon and the State Department, Obama ignored the War Powers Resolution and authorized a military mission in Libya without congressional approval.
6) Left-wing judicial appointments: An Obama re-election could mean one or more additional liberal Supreme Court justices, ensuring that the "living, breathing document" view of the Constitution will apply to critical issues like gay marriage, the Second Amendment and the legality of ObamaCare.
7) Boeing vs. the National Labor Relations Board: In a recent press conference, Obama falsely called this a matter of Boeing "relocating" and "shutting down a plant or laying off workers because labor and management can't come to a sensible agreement." No, Boeing constructed a new facility in South Carolina with no related job losses at Boeing's home state of Washington. In fact, Boeing has been adding jobs in Washington. Here's the question: Can Boeing, subject to four costly strikes since 1989 in the non-right-to-work state of Washington, build a facility where it wishes?
8) The Obama-Loving Media Protective League: Consider two issues that would have generated huge and continuing headlines were a Republican in the White House. Obama promised to diminish the influence of lobbyists, so members of his administration hold meetings off White House premises where they do not show up on White House logs. After promising "the most transparent administration in history," the secrets-obsessed Obama administration has issued more subpoenas of reporters' phone records and other information than did the Bush administration in eight years.
9) Democrats' race cards: DNC Chair Debbie Wasserman Schultz calls the GOP anti-woman and anti-gay, and says it wants to "drag us all the way back to Jim Crow laws." Democrats -- from former presidents Bill Clinton and Jimmy Carter to Sen. Reid -- routinely attack Republicans by whipping out the race card.
10) Anti-voucher for urban schools: The D.C. Opportunity Scholarship Program gave vouchers so that parents could choose the school for their children. The Department of Education hired an outside evaluator, who called it a success -- it improved reading scores and, most importantly, increased graduation rates from 70 percent to 82 percent. Despite the popularity of vouchers among Hispanic and black urban parents, Obama and the Democrats oppose them, and the D.C. program was canned.
Any questions?
By Larry Elder
RealClearPolitics
Today.
1) Incredibly weak recovery: President Barack Obama's tax/spend/regulation policy -- "stimulus"; continuation of TARP; bank, insurance company and auto industry bailouts; "quantitative easing" (aka the printing of money); cash for clunkers; minimum wage hikes; new regulatory rules on businesses; tripling of the deficit; addition of $4 trillion to the debt -- failed miserably to produce jobs and grow the economy at the historical rate expected after a deep recession.
2) ObamaCare: President Barack Obama promised it would "bend the cost curve" and that "if you like your doctor, you will be able to keep your doctor. If you like your health care plan, you will be able to keep your health care plan." The chief Medicare actuary said neither of those claims is true. Two-thirds of doctors believe that ObamaCare will lower the quality of health care.
3) Bogus Financial Crisis Inquiry Commission: Comprised of six Democrats and four Republicans, the commission issued a majority report (with the Republicans dissenting) that blamed Wall Street greed. "Reckless Endangerment," a new book on the financial crisis co-authored by a New York Times columnist/business and financial editor, blames the central role played by Fannie Mae and Freddie Mac, as well as government policy that pressured banks into relaxing lending standards so that the "underrepresented" could buy homes they could not afford.
One of the FCIC's commissioners and its chief investigator both work for a major law firm that is suing a number of Wall Street players. The two stand to benefit financially from the commission's Wall-Street-is-the-bad-guy conclusion. Sen. Harry Reid, D-Nev., who recommended a commissioner in question, now claims he was unaware of his tie to the law firm. The commission chairman, Democrat Phil Angelides -- who received $225,000 in campaign donations from the same law firm -- works for an offshore hedge fund that shorted mortgage-backed securities just before the crisis.
4) Texas justice vs. "Viva Mexico": The Obama administration unsuccessfully filed a court action to stop Texas' planned execution of a Mexican illegal alien found guilty of brutally raping, torturing and murdering a 16-year-old girl. The U.S. Justice Department argued that as an illegal alien the accused should have been advised that he had a right to go to the Mexican consultant to obtain an attorney. Since the accused didn't reveal he was an illegal alien when arrested, the Obama administration sued Texas for not asking the accused about his status. Texas executed the rapist/murderer, who right before the lethal injection, reportedly shouted, "Viva Mexico." Meanwhile, the administration obtained an injunction against Arizona to prevent law enforcement, during a lawful stop, from inquiring about legal status.
5) Libya: Against the advice of the top lawyer in the Pentagon and the State Department, Obama ignored the War Powers Resolution and authorized a military mission in Libya without congressional approval.
6) Left-wing judicial appointments: An Obama re-election could mean one or more additional liberal Supreme Court justices, ensuring that the "living, breathing document" view of the Constitution will apply to critical issues like gay marriage, the Second Amendment and the legality of ObamaCare.
7) Boeing vs. the National Labor Relations Board: In a recent press conference, Obama falsely called this a matter of Boeing "relocating" and "shutting down a plant or laying off workers because labor and management can't come to a sensible agreement." No, Boeing constructed a new facility in South Carolina with no related job losses at Boeing's home state of Washington. In fact, Boeing has been adding jobs in Washington. Here's the question: Can Boeing, subject to four costly strikes since 1989 in the non-right-to-work state of Washington, build a facility where it wishes?
8) The Obama-Loving Media Protective League: Consider two issues that would have generated huge and continuing headlines were a Republican in the White House. Obama promised to diminish the influence of lobbyists, so members of his administration hold meetings off White House premises where they do not show up on White House logs. After promising "the most transparent administration in history," the secrets-obsessed Obama administration has issued more subpoenas of reporters' phone records and other information than did the Bush administration in eight years.
9) Democrats' race cards: DNC Chair Debbie Wasserman Schultz calls the GOP anti-woman and anti-gay, and says it wants to "drag us all the way back to Jim Crow laws." Democrats -- from former presidents Bill Clinton and Jimmy Carter to Sen. Reid -- routinely attack Republicans by whipping out the race card.
10) Anti-voucher for urban schools: The D.C. Opportunity Scholarship Program gave vouchers so that parents could choose the school for their children. The Department of Education hired an outside evaluator, who called it a success -- it improved reading scores and, most importantly, increased graduation rates from 70 percent to 82 percent. Despite the popularity of vouchers among Hispanic and black urban parents, Obama and the Democrats oppose them, and the D.C. program was canned.
Any questions?
RightField
Literotica Guru
- Joined
- Jun 30, 2003
- Posts
- 9,361
Fatal Flaws of Keynesian Economics
By Ron Ross on 7.22.11
It's now clear that the federal government's massive stimulus spending has not achieved its objectives. Why hasn't it? It's important that we have answers to that question.
The stimulus was premised on the economic model known as Keynesianism: the intellectual legacy of the late English economist John Maynard Keynes. Keynesianism doesn't work, never has worked, and never will work. Without a clear understanding of why Keynesianism cannot work we will be forever doomed to pursuing the impossible.
There's no real mystery about why Keynesianism fails. There are numerous reasons why and they've been known for decades. Keynesians have an unrealistic and unsupportable view of how the economy works and how people make decisions.
Short-Run Focus
Keynesian policy advocates focus primarily on the short run -- with no regard for the future implications of current events -- and they assume that all economic decision-makers do the same. Consider the following quote by John Maynard Keynes: "But the long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean will be flat again."
After passage of the stimulus package, Lawrence Summers, Obama's chief economic advisor at the time, often said that the spending should be "timely, targeted, and temporary." Although those sound like desirable objectives, they illustrate the Keynesian focus on the short term. Sure it would be convenient if you could just spend a bunch of money and make the economy get well, but it's not that simple.
The implication of a Keynesian perspective is that you can hit the economy a few times with a cattle prod and get society back to full employment. Remember that so-called "cash-for-clunkers" program? Maybe it accelerated some new car sales by a month or two, but it had no lasting impact.
The "Chicago School" is the primary source of serious research and analysis related to the Keynesian model. Two Chicago School conclusions, in particular, make it clear where Keynesian policies run aground. The two theories are the "permanent income hypothesis" and the theory of "rational expectations."
The "permanent income hypothesis" was how Milton Friedman termed the findings of his research on the spending behavior of consumers. The MIT Dictionary of Economics defines the permanent income hypothesis as "The hypothesis that the consumption of the individual (or household) depends on his (or its) permanent income. Permanent income may be thought of as the income an individual expects to derive from his work and holdings of wealth during his lifetime."
Whether consumers and investors focus mostly on the short run or the long run is basically an "empirical question." A convincing theoretical case can be made either way. To find out which focus actually conforms closer to reality, you have to gather evidence.
Not Evidence-Based
Much of the difference between the two schools of thought can be explained by differences in their methodologies. Keynes was not known for his research or empirical efforts. Keynesianism is definitely not an evidence-based model of how the economy works. So far as I know, Keynes did no empirical studies. Friedman was a far more diligent researcher and data collector than was Keynes. Friedman fit the theory to the data, rather than vice versa.
The Keynesian disregard for evidence is reflected in their advocacy for more stimulus spending even in the face of the obvious failure of the what's already been spent. At a minimum, we are due an explanation of why it hasn't worked. (Don't expect that to be forthcoming, however).
Failure to Consider Incentives
Another of the Chicago School's broadsides against Keynesianism is the theory of "rational expectations." It's a theory for which the 1995 Nobel Prize for Economics was awarded to Robert Lucas of the University of Chicago. As economic theories go, it is relatively straightforward. It essentially states that "individuals use all the available and relevant information when taking a view about the future." (MIT Dictionary of Modern Economics) The rational expectations hypothesis is the simple assertion that individuals take into account their best guesses about the future when they make decisions. That seemingly simple concept has profound implications.
The Chicago School's research led them to conclude that individuals are relatively deliberate and sophisticated in how they make economic choices. Keynesians and their liberal followers apparently think individuals are short-sighted and simple-minded.
An elemental but too often overlooked reality about our economy is that it is based on voluntary exchange. Voluntary exchange is an even more fundamental feature of our economy than is the market. A market is any arrangement that brings buyers and sellers together. In other words, the primary purpose of a market is to make voluntary exchange possible.
Voluntary exchange leaves large amounts of control in the hands of private individuals and businesses. The market relies on carrots rather than sticks, rewards rather than punishment. The actors, therefore, need to be induced to move in certain desired directions rather than simply commanded to do so. This is the basic reason why incentives are such an important part of economics. If not for voluntary exchange, incentives wouldn't much matter.
In designing economic policy in the context of a market economy it becomes important to take into account what actually motivates people and how they make choices. If you want to change behavior in a voluntary exchange economy, you have to change incentives. Keynesian policies do not take that essential step.
The federal government's share of GDP has gone from 19 percent to 24 percent during Obama's time in the White House. A larger government share of GDP ultimately necessitates higher taxes or more debt. In and of themselves, higher taxes retard economic growth because of their impact on incentives. The disincentive effect of higher taxes illustrates why big government is far costlier than it first appears.
It's no accident that Keynesianism is so popular with liberals. It blends well with their unquenchable thirst for expansive government. It doesn't work for the economy but it works for them. The obvious failure of Keynesianism is further evidence of the bankruptcy of liberalism.
Keynesianism is essentially all the Democrats have. It's a one-trick pony. That one trick hasn't worked and now Dems are floundering with nothing more to offer.
All but one member of the president's original economic team has exited. According to liberal columnist Ezra Klein, "Lawrence Summers and Christina Romer were two of the most influential Keynesians in the country. Obama didn't just have a team of Keynesians. He had a Keynesian all-star team."
Now the president has a Keynesian all-gone team. It will be a brighter day for the country when Keynesianism itself is gone for good.
By Ron Ross on 7.22.11
It's now clear that the federal government's massive stimulus spending has not achieved its objectives. Why hasn't it? It's important that we have answers to that question.
The stimulus was premised on the economic model known as Keynesianism: the intellectual legacy of the late English economist John Maynard Keynes. Keynesianism doesn't work, never has worked, and never will work. Without a clear understanding of why Keynesianism cannot work we will be forever doomed to pursuing the impossible.
There's no real mystery about why Keynesianism fails. There are numerous reasons why and they've been known for decades. Keynesians have an unrealistic and unsupportable view of how the economy works and how people make decisions.
Short-Run Focus
Keynesian policy advocates focus primarily on the short run -- with no regard for the future implications of current events -- and they assume that all economic decision-makers do the same. Consider the following quote by John Maynard Keynes: "But the long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean will be flat again."
After passage of the stimulus package, Lawrence Summers, Obama's chief economic advisor at the time, often said that the spending should be "timely, targeted, and temporary." Although those sound like desirable objectives, they illustrate the Keynesian focus on the short term. Sure it would be convenient if you could just spend a bunch of money and make the economy get well, but it's not that simple.
The implication of a Keynesian perspective is that you can hit the economy a few times with a cattle prod and get society back to full employment. Remember that so-called "cash-for-clunkers" program? Maybe it accelerated some new car sales by a month or two, but it had no lasting impact.
The "Chicago School" is the primary source of serious research and analysis related to the Keynesian model. Two Chicago School conclusions, in particular, make it clear where Keynesian policies run aground. The two theories are the "permanent income hypothesis" and the theory of "rational expectations."
The "permanent income hypothesis" was how Milton Friedman termed the findings of his research on the spending behavior of consumers. The MIT Dictionary of Economics defines the permanent income hypothesis as "The hypothesis that the consumption of the individual (or household) depends on his (or its) permanent income. Permanent income may be thought of as the income an individual expects to derive from his work and holdings of wealth during his lifetime."
Whether consumers and investors focus mostly on the short run or the long run is basically an "empirical question." A convincing theoretical case can be made either way. To find out which focus actually conforms closer to reality, you have to gather evidence.
Not Evidence-Based
Much of the difference between the two schools of thought can be explained by differences in their methodologies. Keynes was not known for his research or empirical efforts. Keynesianism is definitely not an evidence-based model of how the economy works. So far as I know, Keynes did no empirical studies. Friedman was a far more diligent researcher and data collector than was Keynes. Friedman fit the theory to the data, rather than vice versa.
The Keynesian disregard for evidence is reflected in their advocacy for more stimulus spending even in the face of the obvious failure of the what's already been spent. At a minimum, we are due an explanation of why it hasn't worked. (Don't expect that to be forthcoming, however).
Failure to Consider Incentives
Another of the Chicago School's broadsides against Keynesianism is the theory of "rational expectations." It's a theory for which the 1995 Nobel Prize for Economics was awarded to Robert Lucas of the University of Chicago. As economic theories go, it is relatively straightforward. It essentially states that "individuals use all the available and relevant information when taking a view about the future." (MIT Dictionary of Modern Economics) The rational expectations hypothesis is the simple assertion that individuals take into account their best guesses about the future when they make decisions. That seemingly simple concept has profound implications.
The Chicago School's research led them to conclude that individuals are relatively deliberate and sophisticated in how they make economic choices. Keynesians and their liberal followers apparently think individuals are short-sighted and simple-minded.
An elemental but too often overlooked reality about our economy is that it is based on voluntary exchange. Voluntary exchange is an even more fundamental feature of our economy than is the market. A market is any arrangement that brings buyers and sellers together. In other words, the primary purpose of a market is to make voluntary exchange possible.
Voluntary exchange leaves large amounts of control in the hands of private individuals and businesses. The market relies on carrots rather than sticks, rewards rather than punishment. The actors, therefore, need to be induced to move in certain desired directions rather than simply commanded to do so. This is the basic reason why incentives are such an important part of economics. If not for voluntary exchange, incentives wouldn't much matter.
In designing economic policy in the context of a market economy it becomes important to take into account what actually motivates people and how they make choices. If you want to change behavior in a voluntary exchange economy, you have to change incentives. Keynesian policies do not take that essential step.
The federal government's share of GDP has gone from 19 percent to 24 percent during Obama's time in the White House. A larger government share of GDP ultimately necessitates higher taxes or more debt. In and of themselves, higher taxes retard economic growth because of their impact on incentives. The disincentive effect of higher taxes illustrates why big government is far costlier than it first appears.
It's no accident that Keynesianism is so popular with liberals. It blends well with their unquenchable thirst for expansive government. It doesn't work for the economy but it works for them. The obvious failure of Keynesianism is further evidence of the bankruptcy of liberalism.
Keynesianism is essentially all the Democrats have. It's a one-trick pony. That one trick hasn't worked and now Dems are floundering with nothing more to offer.
All but one member of the president's original economic team has exited. According to liberal columnist Ezra Klein, "Lawrence Summers and Christina Romer were two of the most influential Keynesians in the country. Obama didn't just have a team of Keynesians. He had a Keynesian all-star team."
Now the president has a Keynesian all-gone team. It will be a brighter day for the country when Keynesianism itself is gone for good.
