Wednesday, July 21, 2010

Obama's "Recovery Act"

Michael Boskin, a leading columnist for the Wall Street Journal, discusses in this week's article whether Obama's so-called "Recovery Act" is working as well as he claims. Boskin states, "President Obama says 'every economist who's looked at it says that the Recovery Act has done its job'—i.e., the stimulus bill has turned the economy around. That's nonsense. Opinions differ widely and many leading economists believe that its impact has been small. Why? The expectation of future spending and future tax hikes to pay for the stimulus and Mr. Obama's vast expansion of government are offsetting the direct short-run expansionary effect". Boskin claims that he along with many others "warned [people] in 2008, the permanent government expansion and higher tax rate agenda is a classic example of what not to do during bad economic times."
Due to the fact that he made this prediction two years ago, gives me great relief that he clearly knows about true economic policy and his column geared towards the growing number of people that are becoming weary of the GoBama presidency is intelligent and logical.
Ever since I truly became aware of what the government was doing and why they were making the choices they made, I have truly believed in every word that this author is trying to get across. The government simply does this whole stimulus package non-sense, not because it's what the economy needs, but if they just sat their and waited like they should the public would feel like he's not doing anything and his chances of getting re-elected would greatly decrease. Obama places all these promises such as raising taxes and making more jobs in order to pull us out of the recession when the bottom line is IT'S THE BUSINESS CYCLE! If we would just let the economy be and not spend the record billions of dollars trying to pull ourselves out, we would be fine it would probably just take an extra year or so. Now however, we have to deal with a debt that has just become an imaginary number that we will never pay off and makes the world loose trust in our monetary policy.
Yes, we may be pulling out of the recession and it may seem like the "Recovery Act" had something to do with it, when in actuality it's Obama's smug plan to take credit for something he only made worse in the long run.
Until we get a President (the closest we had I feel is Clinton ironically) that allows the economy to go through the cycle on its own and focuses on paying off our debt, we will continue to make every short term success disappear with long term financial promises.

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