The Wall Street Journal seems to mistake President Obama’s fumbling around with revenue fixes for the irrelevant deficit problem for what he should be doing, which is energetically rekindling a stimulus, with real spending on jobs programs to nourish the nation’s weakening demand-side.
We think this was the President’s spend-and-tax plan from the very first. Run up spending and debt in the name of stimulus and health-care reform, then count on Wall Street bond holders and the political establishment to browbeat Republicans into paying for it all. He apparently didn’t figure on the rise of the tea party, or 1.9% GDP growth and 9.2% unemployment two years after the recession ended.
Last November Republicans won the House and landslide gains in many states in large part because of the deep unpopularity of the stimulus and ObamaCare. Mr. Boehner has a mandate for spending cuts and repealing the Affordable Care Act. If Republicans instead agree to raise taxes in return for future spending cuts that may or may not happen, they will simply be the tax collectors for Mr. Obama’s much expanded entitlement society.
The US political class has been pursuing almost exactly what the entitled readers of the Journal have demanded since 1981, giving the nation’s spoiled superrich every conceivable break in taxes and deregulation in the delusional belief that the supperrich will kindly spread the wealth to the remaining 90% of us. It’s painfully clear that if spreading the wealth was a goal, it hasn’t worked. The income gap has only grown, and we are now at a point at which the nation’s producers are content to sit on their inventories and supply-side fattened bank accounts and wait for better days from the demand-side, no matter how long it takes. Let the government’s bond rating fall into the toilet, our coddled supply-side class has the patience and the resources to wait it all out.
As the Journal‘s editorial itself says, the economic ironies are, well, rich.