Now that the economy is officially contracting, it’s a good time to look back and list the various Obama policies that are causing it. We do this not in the spirit of blame but rather to point to the corrective steps he needs to take to head off a new recession. After several quarters of optimistic but rigged data showing the economy growing at a 2 percent clip, the truth is emerging: We are on the verge of a double dip recession).
• Our exports to China are artificially depressed because of Beijing’s deliberate weakening of its currency to underprice its goods in the US market and overprice ours’ in theirs’. Correction: Demand that China stops manipulating its currency and impose taxes on currency exchanges if they don’t.
• Stop insisting on tax increases which fall on small businesses. Cut spending instead. The negative multiplier effect of a tax increase is much less than that of a spending cut.
• Be far more aggressive in expanding oil and gas production. Our huge oil import bill – about $40 billion a year – is dragging our economy down.
• The current contraction is before the tax increases Obama just passed have hit. These tax hikes on upper income people will take $50 billion of demand out of the economy and his 2 percent increase in the payroll tax will take out over $100 billion more. These tax increases go directly toward cutting demand and employment. Correction: Cut spending instead.
• The rising cost of health insurance due to Obamcare and increased costs of government – particularly EPA – regulation.
The Bureau of Labor Statistics – aka the B.S. – will doubtless show unemployment steady at some ridiculously low number like 7.8%. But University of Maryland economist Peter Morici says that “labor force participation is lower today than when President Obama took office…factoring in discouraged adults and others working part-time that would prefer full time work, the unemployment rate is 14.4%.
And, around the corner is a likely reduction in the US credit rating by Moody’s.
People ask: How can the Republican Party come back? Because of the impact of Obama’s economic policies which will soon be evident even to the most optimistic and obtuse.
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