Monday, May 17, 2010

Krauthammer on Obama's defense of stimulus spending

Obama defends his economic agenda, touting the April unemployment report as evidence of the effect his policies have had on job growth and the economy.

Krauthammer's reaction: 

"Look, I don't blame the president for not lowering unemployment. A president doesn't have the power to do that.  

But I do blame him for spending $1 trillion and giving the appearance of doing it [lowering unemployment] and pretending it's had any effect. It hasn't. All it has done is saddle us with $1 trillion worth of extra debt, which will be a drag on the economy in the future.  

Presidents could possibly make an effect on unemployment by one thing. If you want to use shock and awe and throw in $1 trillion, what he might have done is do a radical lowering of the payroll tax, because if you want to encourage something, you either subsidize it or lower the tax on it, and the payroll tax is a tax on employment and a tax on work. It might have helped.  

Nonetheless, it's always an exaggeration. If the Clinton administration says we created eight million jobs, that's rubbish. It was Steve Jobs who did that, it was Bill Gates, it was the Internet, a lot of other stuff. A president presides over the economy; he doesn't drive it."

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