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"A Slow but Steady Climb to Prosperity" by Alan Blinder

  1. Ralph Deeds profile image61
    Ralph Deedsposted 5 years ago

    "...Two indisputable economic facts are highly relevant to the current campaign. First, more than four years after the frightening financial panic and deep recession triggered by the collapse of Lehman Brothers in September 2008, the U.S. economy is still not healthy. Second, however, the economy is improving. Notice that the second fact doesn't contradict the first. When you suffer through the worst recession since the 1930s, healing takes a long time....

    "Mr. Romney repeatedly says the economy is growing more slowly this year than last year, and grew more slowly last year than the year before. If he's referring to real GDP, as I suppose he is, he's right. GDP growth averaged 2.4% over the four quarters of 2010, 2% over the four quarters of 2011, and only 1.7% so far this year. That's not good...

    "On the unemployment front, progress since 2010 has been slow but palpable. The national unemployment rate peaked at 10% in October 2009, dropped to 9.4% at the end of 2010, fell to 8.5% by the end of 2011, and to 7.8% in September 2012. No one knows what Friday's report on October will bring, but we have finally struggled back to the unemployment rate of January 2009....

    "Meanwhile, government purchases of goods and services declined for eight consecutive quarters before a surprising uptick in federal spending (largely for defense) in the third quarter of this year. Falling government demand is the opposite of what we need in a weak economy...

    "But lawmakers can and should be doing more. As I've said on this page before, fiscal policy should be giving us a combination of sizable stimulus right now and thoroughgoing deficit reduction starting in a year or two. (That's an opinion.) Instead, it's doing neither. (That's a fact.)

    "For stimulus, we could do a lot worse than to enact President Obama's American Jobs Act, which he proposed about a year ago. It consisted of about $250 billion in tax cuts and about $200 billion in spending, most of it well targeted on creating jobs. But Republicans rejected the act outright....

    "For his part, Mitt Romney rejects any short-term fiscal stimulus, attacks the Fed for trying to speed up the recovery, and proposes large, new, permanent tax-rate reductions—beyond even the Bush tax cuts—which would almost certainly bust the budget again. He claims the rate cuts can be paid for by closing loopholes. But several neutral third parties have demonstrated that his numbers don't add up.

    So the Romney plan would provide neither the short-run stimulus nor the long-run deficit reduction we need, while the Obama plan would provide both. Which plan is better? I guess the answer to that is an opinion, not a fact.

    Mr. Blinder, a professor of economics and public affairs at Princeton University, is a former vice chairman of the Federal Reserve. 

    http://professional.wsj.com/article/SB1 … g=reno-wsj

    1. tammybarnette profile image59
      tammybarnetteposted 5 years agoin reply to this

      Thank you so much for sharing this article. This goes along with all of my personal research from the BLS, the CBO, the US Treasury; So it is nice to see someone with some noteriety come out with this statement. Common sense dictates that if a person, let along a country, spends 8 years , lets say running up credit cards until they are all maxed out, then it's time to pay the piper...and it takes at least twice as long to fix the problem than it took to create it. So, I dug through facts, posted forums that nobody visits, just to show facts. You can not just give tax cuts and expect things to magically turn around. Without stimulus the country falls back into reccession, without monitoring and being fiscaly responsible about policy the debt will continue to climb, without equal measures of application we will design a brand new bubble...I trust Obama's plans, I think Romney is a talking head for the GOP who just want a man they can control ie: flip flop, etcha scetch, will fill that bill perfectly.

      1. Ralph Deeds profile image61
        Ralph Deedsposted 5 years agoin reply to this

        Actually, the work on repairing the hurricane damage is likely to provide a shot in the arm for the economy. The stock market apparently thinks so. It's up 100+ points today.

        1. tammybarnette profile image59
          tammybarnetteposted 5 years agoin reply to this

          Good point Ralph, the new construction alone will create many jobs, new construction being one of the hardest hit in the recession and the slowest to bounce back.

  2. Gnarles Snarkly profile image60
    Gnarles Snarklyposted 5 years ago

    Former bank robber.

  3. e-five profile image95
    e-fiveposted 5 years ago

    Gosh, I miss the boom-and-bust cycles of the 1890s, 1920s, and 2000s, don't you?  It was like a financial amusement park with an awesome roller coaster.

    1. Mighty Mom profile image84
      Mighty Momposted 5 years agoin reply to this

      Superstorm Sandy claimed the rollercoaster, I'm afraid.
      And the rest of the boardwalk, too.