The Economic Impact of the Democrats’ Intransigence April 29, 2013Posted by geoff in News.
The Chairman/CEO of the Vanguard Group talks about the impact of economic uncertainties on the economy:
…our economists at Vanguard isolated changes in the U.S. economy that we determined were specifically due to increases in policy uncertainty, such as the debt-ceiling debacle in August 2011, the congressional supercommittee failure in November 2011, and the fiscal-cliff crisis at the end of 2012. This gave us a picture of what the economy might look like if the shocks from policy uncertainty had not occurred.
We estimate that since 2011 the rise in overall policy uncertainty has created a $261 billion cumulative drag on the economy (the equivalent of more than $800 per person in the country). Without this uncertainty tax, real U.S. GDP could have grown an average 3% per year since 2011, instead of the recorded 2% average in fiscal years 2011-12. In addition, the U.S. labor market would have added roughly 45,000 more jobs per month over the past two years. That adds up to more than one million jobs that we could have had by now, but don’t. [emphasis mine]
I wish they had thought to evaluate the ongoing uncertainties, such as the impact of Obamacare, changing tax situations, and stricter regulations on the economy – I suspect they dwarf the transient events that have preoccupied Vanguard.
But back to Vanguard’s statements: you might be concerned that they’re trying to lay the blame for the economy at the feet of the GOP, since the President has tried to pin all those uncertainty-inducing events on them. But I don’t think that’s the case, because the author, like the GOP, is firmly convinced of the importance of addressing the deficit/debt:
Developing a credible, long-term solution to the country’s staggering debt is the biggest collective challenge right now. It should be America’s biggest collective priority, too.
Make no mistake: A comprehensive, long-term, binding plan that brings the budget into balance over a reasonable time frame is essential. If Washington fails to achieve one, the consequences will be harsh.
The debt ceiling fiasco, etc., were due to battles over the debt: if you believe that debt reduction is imperative, then it would seem that the GOP was in the right on all three occasions.
So those 1 million missing jobs? That’s a result of the Dems’ refusal to look beyond the next election. They ignored the long-term issue while applying their short-term salves, buying votes with money from our children. And in the course of that stubborn refusal, they ended up damaging the economy in the short-term, as well as leaving it to its doom in the long-run.
So thanks for that.