Today’s WSJ op-ed by Jeb Bush and Kevin Warsh is hardly startling in its policy recommendations, as wise as those recommendations happen to be. What I really like about the piece is that its authors gave us the “why” as well as the “how.” And the “why” is not just about making CBO numbers add up:
Barack Obama’s presidency was birthed by economic collapse and financial crisis. Opportunity for a second term is now in growing danger of termination by the very same forces. After its Monday plunge, the U.S. stock market has fallen 18 percent since late April. (During his January State of the Union address, the president pointed to a “roaring” market as one sign his Keynesian policies were working.)
President Obama’s economic all-star team from 2009 is all but gone. But it’s the gift that keeps on giving. In yesterday’s NY Times, former White House economist Christina Romer offered a rather strange op-ed in favor of tax increases. The crux of her argument is this:
It’s up to House Speaker John Boehner now. Democrats, the media and Wall Street will be pounding him to agree to raise taxes as part of a debt ceiling deal. But now is no time for Republicans to go wobbly. Here’s why the GOP should stick to its guns until Aug. 2 – and beyond if necessary:
The main reason we have a big budget deficit right now is that the U.S. economy has been growing too slowly for a decade, including the Great Recession and Terrible Recovery. That means less tax revenue and more government services like unemployment insurance and Medicaid. So perhaps the real way Obamanomics has worsened our debt situation is by contributing to this extended period of weak growth.