Tag Archives: growth

Why Has the US Economy Picked Up? Congressional Republicans

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(Jan. 22, 2015) What a difference two months make. As recently as November, when Republicans scored strong gains in the US congressional elections, the universally accepted explanation was economic performance that was perceived as disappointingly weak. (As always, “it is the economy, stupid.”) A substantial share of the American public thought that economic conditions were actually deteriorating last year; many held President Barack Obama responsible and voted against the incumbent party.

Now suddenly everybody has discovered that the US economy is doing well after all. So much so that Republican leader Mitch McConnell, newly elevated to Senate Majority Leader, has switched from a position that the economy is bad and Obama is to blame, to a position that the economy is good and the Republicans should get the credit. read more

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The Middle Class Crunch: Bipartisan Program for New Members of Congress

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       On December 3-5, 2014, the Institute of Politics at Harvard University held its biannual Bipartisan Program for Newly Elected Members of Congress.  Most of the congress-people come.   This year I was on a panel on the domestic US economy, titled the “Middle Class Crunch.”    In Part I, presented here, I briefly reviewed recent economic statistics.   Part II, laying out 8 recommended policies, will follow.

       The standard economic statistics indicate that the US economy has been doing well lately, not just relative to the severe 2007-09 recession, but relative also to what most Americans think and relative to how other advanced countries are doing.  This applies to (1) GDP, (2) jobs, (3) the stock market, and (4) the budget. read more

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Is the US Economy Really About to Go Boom?

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Politico asked 8 of us for a prognosis on US growth in the new year. This was my response —

Something important will get better in 2014: Fiscal policy will stop hurting the economy. The results should show up as expansion in such service sectors as health, education and construction.

The biggest impediment to economic expansion over the last three years has been destructive budget policy coming out of the Congress: misguided fiscal drag in the short term (crude cuts in spending, especially under the sequester; the expiration a year ago of Obama’s payroll tax holiday); repeated unnecessary disruptive and uncertainty-maximizing political crises (debt ceiling showdowns and government shutdown); and little progress on the genuine longer-term fiscal problem, which is the 40-year prognosis for U.S. debt (a result of projected rapid growth in entitlement spending). These fiscal failures have together probably subtracted well over a percentage point from U.S. growth in each of the last three years. read more

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