Nonsequitur: All Good Except …
October 21, 2013
Irwin Stelzer argues that “The Economic Outlook Looks Good, Politics Aside.” It’s a compelling and optimistic article, pointing out that the Private Sector is doing well by such measures as profit margins, cash flows and credit availability. The national energy resource base is large and production is growing. And the stock market is active.
The only problem with Stelzer’s argument is you can’t put politics aside. The “Affordable Care Act” will immediately cost Americans money out of pocket as their mandated insurance premiums rise. Costs for employers will rise next year after their mandate delay expires. The debt ceiling was raised (unsurprisingly) which means the public sector will borrow more, spend more and owe more. That means taxpayers are on the hook for more. It also means government will be pressured to artificially keep interest rates low, so that savings and investment continue their low returns. It will be pressured to continue printing more money, further decreasing the value of the dollar in taxpayer’s pockets.
The fact is the economy is improving IN SPITE of politics. But we cannot escape the negative effects of increasing regulation, taxes and poor debt management by the public sector, with the guilty party primarily the Federal Government. These negative effects are specifically chronically high unemployment and underemployment, and decreasing real income for most people. While bankers and investors may be doing better, the number of Americans living in poverty is up to 46.5 million. As others have pointed out before, the Obama and Bush administrations bailed out banks and corporations, but they haven’t bailed out the people who voted for them.