President Obama will deliver his third State of the Union address on Tuesday night. According to a preview video released this weekend, the speech will outline Obama’s vision for improving the economy and creating jobs. With an unemployment rate of 8.5 percent, there’s much work to be done. But after three years of Obama’s failed policies, it’s unclear if anything Obama says Tuesday night will differ from the Keynesian ideas he’s already proposed. This week’s chart comes from Heritage’s analysis of the December unemployment report. The economy added 200,000 jobs …
President Obama’s economic stimulus was supposed to revive America’s economy and put people back to work. But nearly three years after Democrats rammed the bill through Congress, it’s a clear-cut failure. The nation’s 8.6 percent unemployment rate stands out as one of consequences. Then there is the high-profile Solyndra scandal and countless other government schemes gone awry. In a new video from Reason.tv, Jim Epstein takes a closer look at other examples — in a setting just a few miles from Capitol Hill. In Silver Spring, MD, government contractors pocketed …
Which comes first: supply or demand? This question has serious policy implications, especially as President Barack Obama proposes $447 billion in additional stimulus spending in order to try to spur job growth in America. “Demand-siders,” also known as Keynesians (after influential economist John Maynard Keynes), insist that short-run economic fluctuations are caused by shocks to the economy that leave aggregate demand—the total amount of money spent on goods and services in the economy—below full capacity. In their view, since less money is spent on goods and services, businesses must lay …
Tax-hike advocates have erected yet another straw man to protect their high-tax policy, now arguing that little economic harm would be done if Congress and the president were to raise taxes on higher earners because these high-tax sufferers would have saved the money anyway. Yet the issue is not saving vs. consumption; the issue is incentives, as Robert Barro points out in today’s Wall Street Journal. Of course, the tax hikers prefer to talk in terms of whether tax cuts for the wealthy would help the economy. But we’re not …
A year ago, President Obama warned the American people that the financial crisis was dire and required a whole new approach to government spending. Obama argued that the government must help America spend its way out of the recession, and his economists, using Keynesian multipliers, argued the “stimulus” would keep unemployment below 8.2 percent (PDF). Conservatives were skeptical, and pointed out that many of the government jobs would take a year or more to materialize, but Obama replied that we must be patient and keep spending. Conservatives pointed out that …
When President Barack Obama was trying to sell his $787 billion economic stimulus plan to the American people, there was no louder cheerleader for the plan than Mark Zandi of Moody’s Economy.com. Zandi confidently produced scientific tables purporting to prove that for every $1 the Obama administration gave to states, GDP would grow by exactly $1.36. Zandi later produced an analysis claiming that Obama’s stimulus would create 2.2 million jobs. But as millions of Americans now know all too well, Zandi was very, very wrong. President Obama’s stimulus has completely …
The Cato Institute sought to make clear where they and the world’s smartest economists stand on the Pelosi-Reid-Obama Debt plan by running a full page ad in the New York Times, Washington Post and other major newspapers this week that includes 200 signatures from major economists who oppose the stimulus: Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we do not believe that more government spending is a way to improve economic performance. More government spending by …
Heritage’s Bill Beach testified at yesterday’s Economic Recovery Working Group hearing on Capitol Hill about an alternative to the misguided Keynesian stimulus package liberals in Congress are advocating. The hearing came a week after President-elect Barack Obama invited alternative suggestions for promoting economic growth. Obama’s openness to alternatives prompted Republican Whip Eric Cantor (R-VA) to do something a bit unusual: open the hearing to American citizens, four of whom submitted questions via YouTube for the witnesses. Two of those witnesses were former Massachusetts Gov. Mitt Romney and former eBay chief …
Government spending does not create economic growth. Regrettably, many in Congress, Republicans and Democrats alike, have ignored this fact. Just today, Senator Judd Gregg (R-NH), declared in his Wall Street Journal op-ed How to Make Sure the Stimulus Works that, “it is fairly obvious that serious deficit spending is needed immediately.” While his four rules for an effective stimulus bill are generally correct, government spending does not lead to economic growth. This notion is grounded in the outdated and often disproved Keynesian economic theory that more government spending invariably increases …
Dan Mitchell of the Cato Institute does an excellent job explaining why Keynesian fiscal strategies do not work in this new video from the Center for Freedom and Prosperity Foundation. It’s more important than ever to combat the myths of Keynesianism with President-elect Barack Obama proposing a massive government spending plan, and even some conservatives promoting a tax version to boost economic growth. [youtube]http://www.youtube.com/watch?v=VoxDyC7y7PM[/youtube]
