Barack Obama has been trying to stimulate the economy with record-high government spending funded by higher tax rates and Fed Chairman Ben Bernanke’s low interest rates.
But as Stanford economist Michael Boskin points out in the Wall Street Journal, “Japan tried that, to little effect, in the 1990s.” Slow growth has become the new normal there.
There are alternative policies. One is to cut government spending, or cut it more than you raise taxes. As Boskin points out, the Netherlands in the mid-1990s and Sweden in the mid-2000s “stabilized their budgets without recession [with] $5-$6 of actual spending cuts per dollar of tax hikes.”
And he notes that Canada reduced government spending in the mid-1990s and early 2000s by an amount equal to 8 percent of gross domestic product.
Those cuts weren’t painless, but they put Canada on a trajectory different from ours. Canadian voters value budget surpluses, and Canada managed to avoid almost all the bad effects of the 2007-09 recession.
I think that Keynes himself would be appalled to see the things being done in his name.
Example 1,876,342 of why there’s not a dime’s worth of difference between Republicans and Democrats:
So, as usual, what has Republican leaders grumbling is not the principle that free people ought to be at liberty to conduct routine business without federal mandates. What irks them is that Obama bureaucrats are marginally more domineering than, say, Bush-era light bulb bureaucrats. (By the way, Daniel Horowitz of RedState reminds us that Rep. Upton’s light bulb ban “made its way into the 2007 energy bill [signed by President Bush], which turned out to be the Obamacare of the energy industry.”) Upton and Rodgers object to what they call FDA’s inflexible “‘my way or the highway’ approach” to the imposition of government standards. That the imposition itself, quite apart from its obnoxious manner, is offensive never dawns on them. And speaking of offensive, how’d you like this Upton-Rodgers line: “In fact, Congress has previously partnered with the restaurant industry to improve consumers’ access to information.” Michael Bloomberg and Debbie Wasserman-Shultz wouldn’t have written it any differently.
As he notes, this is why Obama managed to win again with four million fewer votes than the last time.
I love this country. I love the American idea. I have profound disappointments in my country. I feel we ought to be in space … because it meant so much to us … technologically. It moved us along.”
We are “in space.” We have a space station, we have at least two, maybe three manned spacecraft in development, to fly in two or three years (not even counting NASA’s wasteful efforts that won’t fly with humans until the end of the decade at best), we just got an announcement of a serious plan to send two people to Mars within five years. What more does he want?