The day the Congressional Budget Office forecast that the United States is headed for its fourth straight year with a $1 trillion-plus budget deficit, President Obama touted the benefits of big government spending.
Tales from the Trail
When it comes to framing economic policy, it looks increasingly as though Republicans are winning the debate. Not only have they made “stimulus” almost a dirty word but there seems to be a growing feeling that deficit-financed spending is not a great way to pull the economy out of a recession. Forget the conclusions of the bipartisan Congressional Budget Office about how the bailouts and stimulus of 2008 and 2009 saved millions of jobs. Forget the global consensus around the need for coordinated stimulus after the financial crisis. The American public is simply not convinced.
The U.S. economy continues to swim with the fishes – weekly unemployment claims are at a nine-month high and the director of the Congressional Budget Office says the unemployment rate won’t fall to around 5 percent until 2014. Not much in the way of economic sunshine today.
How do you know the economy is souring?
One indicator that doesn’t come wrapped in a government report is political finger-pointing.
Two days after arriving in Martha’s Vineyard, President Barack Obama is taking a break from his vacation to make some news: he will announce that he is nominating Ben Bernanke to a second term as chairman of the Federal Reserve.