Is government-centric approach hurting economy?
How can government reduce unemployment while sucking more money out of the economy for "stimulus"?
Augusta Chronicle Editorial Staff
Sunday, November 15, 2009

When liberals were on the outs in Washington, they claimed opposition to the president was their patriotic duty.

Now that liberals rule the nation's capital, opposition to the president is reflexively characterized as racism or, more generally, hatred.

This page is routinely accused of "hating" the president for opposing his policies. It's a cockamamie charge, of course, and indicative of someone who has no true argument to make.

But it's also even more outlandish by the day, as opposition to this president's economic policies, in particular, grows right along with the unemployment rate and financial uncertainty.

The truth of the matter is that this president's economic policies may be the polar opposite of what is needed to reinvigorate the economy. That is, it's becoming clear that his unwarranted faith in increased government spending may be doing more harm than good.

That is shown to be true enough by the administration's own figures: In selling his $787 billion stimulus package early in the year, the president's team said it was necessary to keep the unemployment rate below 8 percent. Without the stimulus, they said, unemployment would reach 9 percent in 2010.

Well, with the stimulus, unemployment has already topped 10 percent.

Moreover, we might look back at 10 percent with misty nostalgia soon: As Bloomberg financial news notes, David Rosenberg, chief economist at Gluskin Sheff & Associates Inc. in Toronto, predicts that 13 percent unemployment is possible in the months ahead.

It would be the highest unemployment rate ever recorded since monthly records started being kept in 1948.

"Additionally," Bloomberg writes, "the so-called under-employment rate, which includes part-time workers who'd prefer a full-time position, and people who want work and have given up looking, reached 17.5 percent last month, the highest level since records began in 1994."

"This is going to be the mother of all jobless recoveries," Rosenberg said.

It's likely that one of the reasons for that is the Obama administration's emphasis on government spending, rather than freeing up job-fueling capital in the private sector.

It's also likely that Democratic proposals to reform health care and place limits on carbon emissions will further erode job growth.

What would we propose? Earlier this year, rather than a "stimulus" package -- in which Congress would dole out our money as it sees fit -- we echoed others' proposal for a moratorium on the collection of income taxes. That would have put money into consumers' own pockets immediately. We believe lower taxes on commerce and industry, not higher, will stimulate private-sector growth.

We also wish the president would revitalize our manufacturing base through alterations in trade policies that currently hamstring American compan- ies.

The American people are beginning to agree in great numbers with economists and editorial writers that the Obama administration's government-centric approach -- which also failed during Japan's worst recessionary days -- is failing: 66 percent in a new IBD/TIPP poll say the stimulus package has fallen short.

Nor is the feeling limited to conservative skeptics: It is shared by 48 percent of Democrats, 80 percent of Republicans and 73 percent of independents. It's across the board.

All those people cannot possibly hate the president. Fact is, his personal popularity is still high.

This isn't about hatred or any other emotion. No one shall accuse Mr. Rosenberg or other independent economists of hating the president. Rather, it's about cold, hard facts. It's about Americans' ability to provide for their families.

And it's about what policies our government will pursue -- and whether those policies will improve our lot or add to it.

From the Sunday, November 15, 2009 edition of the Augusta Chronicle
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