Sunday, February 19, 2017

The Great Recession: This Time Really is Different

David has a piece up at the Daily Caller highlighting an article by economist Robert Barro, who claims that the U.S. economy should have recovered much faster from the recession than it actually did. David expands on this point, arguing that too much focus on fiscal stimulus is to blame for the anemic recovery. I don’t find either of these arguments very convincing.

Wednesday, February 8, 2017

The Myth that Tax Cuts Don't Work

My piece is up at the Daily Caller.

It begins:

Despite the preponderance of contrary evidence, myths persist that tax cuts primarily benefit “the rich” and have no discernible impact on economic growth.

Months ago, for instance, Hillary Clinton charged that “slashing taxes on the wealthy hasn’t worked. And a lot of really smart, wealthy people know that.”

She’s right that it hasn’t worked, but she failed to mention that it’s also never happened. The tired “tax cuts for the rich” canard is disproven by the 1920s, the 1960s, the 1980s and the 2000s, when tax rates were reduced for all—and especially low—income groups.

Read the full piece here.

Wednesday, February 1, 2017

This is Why Economic Recovery is So Slow

My piece is up at the Daily Caller

A snippet:

“I actually compare our economic performance to how, historically, countries that have wrenching financial crises perform. By that measure, we probably managed this better than any large economy on Earth in modern history.” – Barack Obama

So say defenders of the sluggish recovery.  But recent research belies that idea. The truth is our lackluster growth is the result of neglecting an essential economic concept.

According to Just Facts Daily, “even after the recession ended in 2009 average real GDP growth has been 35% below the average from 1960–2009, a period that includes eight recessions.” Moreover,

In early 2011, the White House Office of Management & Budget projected that real GDP would grow by an average of 3.6% per year for five years after the Great Recession (see pages 14–16). Obama’s economists noted that this figure was lower than the typical post-recession growth rate of 4.2%, but they concluded that the “lingering effects from the credit crisis may limit the pace of the recovery,” even though the recession left “enormous room for growth in 2011.” Ultimately, GDP grew by an average of 2.2%, or 39% below the White House’s conservative estimate.

Read the full piece here