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Will Congress Prolong Economic Downturn?
Posted By Rob Bluey On April 4, 2008 @ 4:44 pm In Scribe | Comments Disabled
American businesses shed 80,000 jobs in March and 232,000 jobs in the first quarter of 2008, confirming that economy ground to a halt in the first quarter of 2008 . The unemployment rate rose to 5.1% — the first time it climbed above 5% since September 2005 — although that’s still lower than the average unemployment rate for the 1970s, 1980s and 1990s. Heritage’s Rea Hederman offered his analysis on CNBC  today:
The bad news is already prompting new calls for action from Capitol Hill. “Democrats are focused on the issues that concern Americans. We are working to address the housing crisis, as well as other economic issues that this Administration has ignored for seven years,” said House Majority Leader Steny Hoyer (D-Md.). “Throughout this year, Democrats will continue to examine responsible policy options to turn this economy around.”
Congress should not react to the softening economy and the pressure to “do something” by passing expensive but ineffective stimulus measures that will do little to help the economy. Because the government does not create wealth, but only transfers it, Congress has limited power to stimulate the economy.
Now, if only Congress would listen. Propping up a bubble by increasing regulation and meddling with the housing market can only make things worse. Lawmakers should instead base their actions on economic principles that lead to strong long-term economic growth.
Article printed from The Foundry: Conservative Policy News Blog from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2008/04/04/will-congress-prolong-economic-downturn/
URLs in this post:
 ground to a halt in the first quarter of 2008: http://www.heritage.org/Research/Economy/wm1885.cfm
 offered his analysis on CNBC: http://www.youtube.com/watch?v=Lbj1HyguMuc
 we: http://www.foundry.org/2008/04/01/dont-do-something-americans-are-against/
 have: http://www.foundry.org/2008/04/01/dont-let-do-something-become-an-excuse-for-waste-and-risk/
 repeatedly: http://www.foundry.org/2008/04/02/common-sense-on-housing/
 emphasized: http://www.foundry.org/2008/04/03/morning-bell-dont-make-it-worse/
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