Friday, July 02, 2010

On the verge of a lost decade?

Graph of the day. Pretty glum on CNBC this morning. Leisman, the Obama apologist, was looking at his shoes, Santelli said don't quote any dead economists to me, I'm looking at real numbers and it's not working. With the private sector jobs numbers out today we're closer than ever to being dead in the water for 10 years.

More. Rasmussen: 29% Say Stimulus Plan Helped the Economy, 43% Say It Hurt:
Just 25% of voters nationwide believe the economic stimulus package created jobs and voters are counting on decisions made by business owners more than government officials to create the jobs needed by the nation.
And this:
By a 69% to 15% margin, voters believe tax cuts is a better way to create jobs rather than more government spending.
WSJ. The Obama Tax Trap. Obama is suddenly talking about deficits and debt as a prelude to raising taxes big time:

What CBO's latest apocalyptic report doesn't stress is what we'd call the more important deficit in its forecast: the growth deficit. CBO predicts an annual rate of GDP growth of 2.2%. Yet since 1959 the U.S. economy has grown at an average rate of 3%, and during the 1980s and 1990s it was closer to 3.5%. The compounding effect of restoring this faster pace of growth would mean far more net national wealth and would certainly make debt repayment easier.

Even Mr. Obama's current spending level of 25% of GDP would be more manageable if the slow economic recovery weren't keeping tax revenue at unusual lows. In 2007, the economy threw off revenue of 18.5% of GDP. That fell to 14.8% in 2009 and may not be too much higher this year. The point is that there is no hope of balancing the federal budget without a return to higher levels of economic growth.

Tax increases kill growth.

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