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Reply #46: Maintain An Even Course in Economic Policy, For One [View All]

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ProfessorGAC Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-18-04 03:21 PM
Response to Reply #33
46. Maintain An Even Course in Economic Policy, For One
Look, one of the biggest misconceptions of macroeconomics is that jobs are some tangential outgrowth of economic vibrancy. This couldn't be more wrong.

Employment is a direct outcome of a strong economy, in just as profound a way as GDP growth. Macroeconomics is NOT a matter of GDP growth fueling everything else. There are more than just that one outcome of economic policy.

The first thing a president should do is avoid doing anything to upset the balance in the system. Macroeconomies work in equilibrium with capital (not equity) markets. A folly of cutting taxes to stimulate consumption (incorrectly referred to as supply-side, which is actually a microeconomic concept, so they cannot even name their hypotheses correctly) unnecessarily upset the monetary balance. This resulted in the current economic condition and OUTCOME of which is high unemployment. High unemployment leads to a dimunition of expendible capital, which has a negative effect on consumption.

So, once again, Li'l Georgie started spending gobs of money he didn't have to prop up the GDP. But, that's not sustainable. So, basically he created the mess by upsetting the equilibrium without any mathematical justification, and then made things worse by adding more weight to the negative side of the scale. He continues to do so.

The actual fact is that a president can do more harm than good to the economy. Reagan and Junior are mathematically irrefutable examples of that.

So, Boortz is wrong, as usual. The government has a duty to cover its expenses. It can't do that if tax revenues are double dipped by cutting marginal rates and then reducing incomes to those paying the taxes. What Bush should have done is NOTHING! But, naturally, "staying the course", as he is now so found of saying, would have been inconsistent with their provably incorrect economic theories. So, he plays the amiable dunce and screws up the economy, and now to heck with everyone who doesn't already have theirs. Nice.
The Professor
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