In the often Orwellian world of government policy pronouncements, the Obama economic team is trying for new ground, with “self-sustaining” recovery, understood at least by the dictionary to mean “maintaining itself by independent effort,” now understood, according to Timothy Geithner and Lawrence Summers, as requiring extensive government support and intervention. In an op-ed published June 23 in The Wall Street Journal, the two most senior Administration economic officials call on their G-20 colleagues to maintain government spending, establish a global framework for financial regulation, and to make efforts in agricultural …
Lawrence Summers, the Director of the White House National Economic Commission recently committed an unpardonable sin – he revealed two unpleasant truths in a single sentence. Summers said, “I don’t find there to be much evidence that suggests that raising the top marginal rates from 35 to 39 percent that will be implicit in the repeal of the Bush tax rates will do substantial damage to the incentives in the economy”. [emphasis added] The modifier “substantial” is the key to the first Summersian truth. Will raising the tax rates cause …
Even as National Economic Council Director Lawrence Summers says the stimulus is working he also warned that he expects unemployment to remain unacceptably high for years to come. Unfortunately, Summers is half right: unemployment will probably stay high, but because of – not in spite of – the stimulus bill. The Obama administration claimed that the government spending in the nearly $800 billion stimulus bill would “create or save” millions of jobs. And in one limited sense it will. The enormous increases in government spending will directly employ many workers. …
