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Obama has warned Congress that the sequester that is scheduled to kick in will be very harmful to the U.S. economy. This comes after a State of the Union address where the President in triumphant fashion proposed numerous government initiatives to improve inequality, education, climate, and numerous other factors of American life. The interesting comment in this article is Bohener's comment that increased tax revenue will not reduce the deficit, but go into more government programs. This would lead one to assume that when tax revenue is increased, President Obama will have free reign to do what he wants with the money. However, the fact of the matter is, unlike the triumphant tone of President Obama in his recommendation, the President has no control over what legislation will be passed as long as the Republicans own a majority in the House.
I personally believe the State of the Union Address, the comments by political pundits, and John Boehner all distract from what the people need to know. I personally believe that although the interest rates are low, the increasing deficits as percentage of GDP will eventually catch up with the U.S. if not taken care of. I remember reading a paper issued by the European Union that found correlation between negative macroeconomic impacts and debt as percentage of GDP. The real concern of President Obama should not be to introduce revolutionary programs with his name on them and the real concern of the Speaker should not be to oppose increase in tax revenue at all costs. As the President, I hope President Obama (while completely understandable) stops antagonizing the Republicans for the sake of compromise and show the Democrat willingness to make significant cuts on the condition that Republicans agree to raise tax revenue.
1 comment:
I agree with Andrew. Our debt is the real issue and I believe it is clear that the looming sequestration is main obstacle holding our economy back. i believe this is true due to a number of factors. First the stock market has been performing tremendously well over the last. Also, consumer confidence is clearly rising as can be witnessed by a number of statistics. The University of Michigan's consumer sentiment index has been steadily rising since the beginning of 2012 and only suffered a dip in December, due to the fiscal cliff. I think it is disgraceful that our own government is holding our economy back and I hope a resolution can be reached.
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