The Obama administration's economic stimulus program "has failed," says Allan H. Meltzer in The Wall Street Journal. President Obama, claiming he's tackling a problem he inherited, has had 18 months to turn the economy around, yet growth remains slow and "unemployment remains high." While European leaders talked about shoring up their budgets at last weekend's G-20 meeting, the U.S. remains the "odd-man out," continuing to call for more government largesse. Obama and his Democratic allies won't admit it, but their demand for more stimulus spending only proves "that they too recognize that the earlier measures failed." Here, an excerpt:
"The contrast with President Reagan's anti-recession and pro-growth measures in 1981 is striking. Reagan reduced marginal and corporate tax rates and slowed the growth of non-defense spending. Recovery began about a year later. After 18 months, the economy grew more than 9 percent and it continued to expand above trend rates.
Two overarching reasons explain the failure of Obamanomics. First, administration economists and their outside supporters neglected the longer-term costs and consequences of their actions. Second, the administration and Congress have, through their deeds and words, heightened uncertainty about the economic future. High uncertainty is the enemy of investment and growth."