Remember and repeat: it’s Bush’s fault
From Paul Rugrat (AKA Paul Krugman) on how a bureaucratic functionary undid the otherwise spring-loaded-for-success Obama economy: it’s Bush’s fault.
…this week’s shocking refusal to implement debt relief by the acting director of the Federal Housing Finance Agency — a Bush-era holdover the president hasn’t been able to replace — illustrates perfectly what’s going on.
First, the Rugrat seems to forget President Obama’s history of making recess (and unconstitutional) appointments when the Senate is in session, so with that explanatory-fail out of the way, onto more non-explanation:
Some background: many economists believe that the overhang of excess household debt, a legacy of the bubble years, is the biggest factor holding back economic recovery. Loosely speaking, excess debt has created a situation in which everyone is trying to spend less than their income. Since this is collectively impossible — my spending is your income, and your spending is my income — the result is a persistently depressed economy.
How should policy respond? One answer is government spending to support the economy while the private sector repairs its balance sheets; now is not the time for austerity, and cuts in government purchases have been a major economic drag.
Many economists? Yes, and four out of five dentists recommend sugarless gum for their patients who chew gum.
And Paul, there is the government who’s now about 25 percent of the economy and they’re spending about 140 percent of their income. This very same government has spent over $5 trillion more than its income during the Obama era.
…the Federal Reserve’s refusal to act in the face of high unemployment and below-target inflation is a scandal.
But fiscal and monetary policy could, and should, be coupled with debt relief. Reducing the burden on Americans in financial trouble would mean more jobs and improved opportunities for everyone.
The Fed has bought much of the government’s debt (over 60% in 2011) the Obama Administration has created, so to follow the Rugrat’s logic, maybe the Fed needs debt relief.
Or perhaps the government itself needs debt relief. Or even the American people who fund the government.
After all, each taxpayer’s share of the national debt is about $194K and $64K of that has happened on Obama’s relatively short watch. And those numbers don’t include the nation’s true unfunded liability which is closer to $500K per taxpayer.
The real lesson? Who—besides the government—will loan money without an expectation of repayment (let alone reasonable return)? Not even a fully indoctrinated lefty like the Rugrat would do that.
While the President can’t control the economy, he can influence it. Obama has and his influence—all of it bad—is his legacy.
Finally, Paul (and Barry), It isn’t the taxes. It’s the spending.