Did World War II spending boost economic growth? Although some statistics appear to affirm this, wiser historical analysis demonstrates that artificial increases in output during the war masked a debilitated private economy. Meaningful growth increased after the war, when free-market mechanisms returned and marginal tax rates were reduced. Gross national product (GNP), the total value of everything produced by United States domestically or abroad, did increase during the war and trended downward as the war ended in 1945, falling considerably in 1946 and 1947. It would be shallow analysis, however, …
Silicon Valley is one of the few bright spots in the U.S. economy today, but a new report warns that Washington’s outdated regulation and antitrust policy threatens to stifle growth among innovative technology companies. The report, produced by the Progressive Policy Institute, analyzes the impact of acquisitions in the technology sector. It concludes that acquisitions lead to economic growth and job creation. There’s just one problem: Washington bureaucracy. The federal government’s process of approving acquisitions — a problem well-documented by Heritage’s James Gattuso — can slow down innovation, hamper growth …
Evidence shows that “austerity” during a sharp downturn in 1920 coincided with quick economic recovery and robust growth throughout the rest of the decade. Nevertheless, there is a belief that the example of President Herbert Hoover from 1929–1933 was a failure of austerity, which pushed the economy into the Great Depression. It was not. Hoover never cut spending or slashed tax rates. In fact, Hoover doubled spending in real terms during his four years in office. When FDR arrived at the White House, according to Cato economist Steven Horowitz, FDR’s …
In the currently battered U.S. economy, with high unemployment and bleak growth prospects, politics has become a contest of dueling jobs plans: politicians of every stripe have them. Their motivation may be sincere, but their concept is wrong – and they are just perpetuating the myth that government can create jobs. It can’t. It can only maintain conditions that are conducive to economic growth. That is the real engine of job creation, and it’s where policymakers should place their focus. Job creation is a function of producers meeting the demands …
Sen. Mike Lee (R-UT) came to Washington as the a tea-party conservative with the goal of fixing the economy, addressing the debt crisis and curbing the growth of the federal government. It’s an uphill battle for the youngest member of the U.S. Senate, but one he’s prepared to fight. Lee’s recent book, “The Freedom Agenda: Why a Balanced Budget Amendment is Necessary to Restore Constitutional Government,” outlined his goals for changing Washington. (Listen to our recent podcast.) Yesterday at Heritage, he delivered the annual Helms Lecture, detailing his opposition of …
Catching you up on clips, commentary and news of the day. Sign up for the daily email update from Scribe. The Movie Obama Won’t Want You to See – James Jay Carafano, FoxNews.com Why Tea Party should resist gutting defense – John R. Bolton, The Washington Times Big Brother Goes Green – Audrey Hudson Solar, we have a problem – Nicolas Loris, Washington Times Taxes and Business, There We Go Again – Mark Green Gov’t May Be Lowballing Medicare Shortfall By $6 Trillion – David Hogberg, Investor’s Business Daily Police grants …
Reuters has this morning’s bad news on the economic front: The U.S. economy came perilously close to flat-lining in the first quarter and grew at a meager 1.3 percent annual rate in the April-June period as consumer spending barely rose. The Commerce Department data on Friday also showed the current lull in the economy began earlier than had been thought, with the growth losing steam late last year. That could raise questions on the long held view by both Federal Reserve officials and independent economists that the slowdown in growth …
President Obama and congressional leaders can’t seem to agree on any plan to avert a debt crisis. As the White House’s Aug. 2 deadline approaches, the House has adopted the Cut, Cap and Balance Act, while the Senate has floated a number of bad ideas. Earlier this year, The Heritage Foundation formulated its own plan called Saving the American Dream to fix America’s debt problem. It keeps spending low without raising taxes. Entitlement programs are the biggest driver of debt, so reforming them first will put us on a course to a …
In this week’s Heritage in Focus, labor economist Rea Hederman discusses last month’s job report. Listen to the full interview, here. Unfortunately, last month’s jobs report was the worst one in some time. We created a mere 18,000 jobs and the unemployment rate increased to 9.2 percent. Normally in a recovery, as more people rejoin the labor force in their search for work, labor force participation increases. Worryingly, however, the labor force participation rate went down. How do we reverse this? How do we create jobs? And are we looking …
This Wednesday marks the first anniversary of Obamacare. While advocates spend the week highlighting the new law’s effects on different groups of Americans, we will do the same. A review of the facts on the ground and the conclusions of Heritage research over the past year reveal the far-reaching negative consequences of the new law. Today, the argument is that Obamacare is good for American business. Though there are sure to be those who experience some benefit under the new law, its overall effect will be to cause great harm …
