Now, Obama’s budget champions even tougher regulation—for example, shoring up the Labor Department bureaucracy—and more entitlements boost the flagging spirits of the working poor—but no relief from IRS political targeting.
In this century, we have seen a substantial benefits expansion through the EITC, abuse of the Social Security disabilities program, Medicare drug benefits, Medicaid, ObamaCare, and student loans that bribe young adults out of the job market.
Thanks to the combination Bush-Obama regulatory reign of terror and welfare state, the economy has created a paltry 30,000 jobs per month since 2001. Four times as many would be needed to keep up with population growth.
Reagan and Clinton accomplished more robust growth and jobs creation with lighter regulations, lower taxes, less emphasis on entitlements and fewer efforts to suppress criticism of their administrations’ policies.
To bolster economic growth, those kinds of policies should be supplemented by greater attention to developing off-shore oil and gas, which could provide absolute independence from foreign oil, and confronting protectionism and currency manipulation to fix the trade deficit with Asia.
Together those could easily boost growth to 4 to 5 percent to catch up for lost progress and create more than 400,000 jobs a month.
Peter Morici is an economist and professor at the Smith School of Business, University of Maryland, and a widely published columnist. He tweets @pmorici1