By John Fuller
The news that unemployment has been stuck at over 8 percent and GDP at less than 2 percent for the last four years brings up the question of what is the proper solution to our problem of over 24 million people without jobs and millions more underemployed.
The answer is simple: create economic growth. Notice I did not say create jobs. Ever since economic records have been kept of American Gross Domestic Product (GDP), if our economy did not grow by at least 3.2 percent, unemployment increased. The reason is that increasing population and more productive technology necessitates that level of growth.
Economic growth is easy to promote. Unfortunately, the policies of President Barack Obama have done the opposite. Increasing taxes, more restrictive regulatory policies, oppressive environmental regulations, a government takeover of one-sixth of the economy (Obamacare), borrowing money to give to crony constituents and handing out food stamps does not encourage economic growth.
Lowering corporate taxes, encouraging energy development, reducing government borrowing and spending, and repealing the dozens of taxes included in Obamacare will stimulate growth.
Guaranteed! Annual GDP growth of 4 percent cures all economic ills. Obama says his grade is “incomplete,” so we must do as Clint Eastwood says, “We gotta let him go.”
By Joe Carbonari
I’m sorry. I disagree. Economic growth is not easy to create, or sustain, especially when you insist on playing “Starve the Beast” to shrink the government.
Yes, we have excessive debt that must be dealt with, and that will require entitlement cuts, but that does not obviate the proximate need of the moment: stimulus.
We lack demand. We have all-but-free money thanks to the Fed, but we don’t have markets for our goods and services, here or abroad, that justify the expansions and start-ups that are needed to provide the jobs and purchasing power that we lack.
Now, today, cutting government spending, and demand, even further is exactly the wrong choice. It does not help; it makes the situation worse, with fewer jobs, less purchasing power, more pain and a slower recovery.
Where do we get the money? We tax and borrow it from those that are blessed to have a surplus.
We pay it back as the economy grows and they profit from the investments they make and the superior knowledge, energies and opportunities they have. And we strive to become “them” through the knowledge, the energies and the opportunities that “we” have.
It is an imperfect, but wonderful, system in which we in America are blessed to live. It is truly the “American” way.
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