When will the media acknowledge what they ought to be able to deduce from the ossified economies of Western Europe, never mind the pulverized economies of Eastern Europe? Yes, government can save government jobs -- as Obama's "stimulus" was broadly spent in preserving positions for schoolteachers, public librarians and employees at community health clinics -- but it can't create and maintain private-sector jobs, or force the private sector to create and maintain jobs.
Romer, who became the chair of Obama's Council of Economic Advisers, estimated that increased government spending would add $1.57 to GDP for every $1 spent, while $1 of tax cuts would add only 99 cents. But a vigilant media would have noticed what economist Greg Mankiw did: that Romer wrote a paper with her husband, David, in 2007 that found that each dollar of tax cuts has historically raised GDP by about $3 -- three times Romer's new estimate.
Harvard economists Alberto Alesina and Silvia Ardagna recently conducted a comprehensive analysis for the National Bureau of Economic Research. They looked at large changes in fiscal policy in 21 nations in the Organisation for Economic Cooperation and Development. They identified 91 episodes since 1970 in which policy moved to stimulate the economy. They then compared the interventions that succeeded with robust growth, and those that failed to deliver. The results were crystal clear. Successful stimulus depended almost entirely on cuts in business and income taxes. Failed stimulus occurs mostly with a strategy of increases in government spending.
Is it really rocket science to suggest businesses will not go on a hiring binge when the liberal agenda in Washington -- on health care, "cap and trade" and other tax-spend-and-regulate plans -- creates so much heartburn about whether businesses can make a profit? The word "profit" is almost an obscenity in the hallways of Team Obama. It's suggested that the times are too hard for business to seek profits now -- which guarantees more months of stagnant employment ahead.
Through it all, the media seem willing to extend to the administration the benefit of every doubt and the blanket assumption that every socialist premise is almost drowning in compassion -- even as the hard times continue.
Ronald Reagan's economic recovery program generated the greatest peacetime expansion in history. That is fact. To this day, the "news" media report it as a failure. Obama's economic program thus far has been a disaster. That is fact. To this day, the "news" media "report" it as a "recovery." George Orwell would be proud.
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