Is President Obama’s economic policy preventing the economy from recovering? The Wall Street Journal thinks so. Tuesday’s editorial notes,
After five weeks in office, it’s become clear that Mr. Obama’s policies are slowing, if not stopping, what would otherwise be the normal process of economic recovery. From punishing business to squandering scarce national public resources, Team Obama is creating more uncertainty and less confidence — and thus a longer period of recession or subpar growth.”
This observation is not unique. In his March 2nd op-ed, Congressman Paul Ryan (R-WI) wrote:
After two months of drastic interventions, has hope replaced fear, and confidence pushed aside uncertainty? Hardly.”
With the market in freefall – the Dow Jones plummeting an astounding 1223 points since inauguration day – it is beginning to become apparent that the current policy isn’t working.
The question then becomes, if the Obama policy is amiss, what is the preferable alternative? Congressman Ryan thinks he has the plan. Among the highlights:
Implement a pro-growth tax policy. Instead of raising taxes, he would lower taxes to 25% for the top marginal income tax rate, and combine all the other brackets to a 10% tax rate on the first $100,000 for couples. He would also lower the top corporate tax rate, and eliminate the capital gains tax. This would increase, rather than suppress, the incentives to work, save, and invest.
Fix the entitlement crisis. Congressman Ryan has a bold Roadmap for America’s Future which would put Social Security, Medicare, and Medicaid on an affordable path without raising taxes. Even before the impact of the economic crisis is taken into account the debt-to-GDP ratio will rise from 40.8 percent today to more than 290 percent in 2050 if no action is taken. Any successful economic recovery plan must not ignore the long-term budgetary issues.
Prior to inauguration day President Obama indicated he would take the entitlement crisis seriously, and true to his word he recently hosted a Fiscal Responsibility Summit at the White House. However, the question remains, does this represent the first steps along the path toward reform, or just another politically motivated photo-op?
The Dow Jones has now fallen 30% since Election Day. Think it’s time for a change?