James Pethokoukis

Politics and policy from inside Washington

Obama’s unemployment forecasts

Feb 2, 2010 19:57 UTC

Brad DeLong looks at the Obama unemployment forecasting record:



Fortunately, Ben Bernanke appreciated how serious a risk the economy faced. I recall a year ago some people advocating a more hawkish monetary stance. Perhaps that highlights the relative weight they place on potential inflation versus potential unemployment. Though it remains to be seen how effectively the Fed will be able to execute its exit strategy to avoid an explosion in inflation, so far it would appear that Bernanke’s understanding of the tradeoff was appropriate.

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Cutting spending vs. raising taxes

Feb 2, 2010 16:45 UTC

The Washington consensus is that taxes will go up sharply because there is no will to cut spending. Yet that may not be the view outside of the 202 area code.I just got back from a wing-ding at the Hoover Institution where economist Robert Hall quite matter-of-factly assumed big future spending  cuts because, in his opinion, Washington did not have the will to broadly raise taxes. Certainly, the new Obama budget sticks to the Dem pattern of only raising investment and incomes taxes on the so-called wealthy, at least transparently.


Judging by the way they behaved during the State of The Union address, the elephants have no answers, and the donkeys are braying their usual song. So I have no confidence that the status quo will be changed anytime soon. The whole issue of spending and taxing could be rendered moot if we scrapped the whole tax code and started over. I have even written a book about it. But since I am only one person, my vote will not count, and the politicos will blithely skip off into lalaland with our tax money until the nation goes bankrupt.