Growth and Grim Numbers
9:39 AM, May 31, 2011 • By DANIEL HALPER
Even the New York Times editors can't help but conclude, after taking a look at first-quarter economic growth data, that "The Numbers Are Grim." In particular, this is what they find alarming: "the growth estimate remained stuck at an annual rate of 1.8 percent, compared with 3.1 percent at the end of last year....More troubling in the latest figures, consumer spending — the largest component of the economy — was especially slow. Stagnant wages and higher prices for gas and food are squeezing family budgets, while falling home equity hurts consumer confidence. That suggests more bad news to come."
In this instance, the Times is right: "Growth today is our biggest problem – but also our biggest opportunity," as Bret Swanson at Forbes observes.
Which is to say, the difference between financial solvency for entitlements (particularly Medicare) and insolvency is economic growth -- not differences in tax rates, or simply cutting out waste, fraud, and abuse. Even so, reforms are needed, particularly considering the current economic outlook. But one might think that since the Democrats don't have a Medicare plan, they'd really be trying to come up with a growth plan (beyond greater "investments" and higher tax rates) to save the entitlements, but it doesn't seem to be the case.
And while the Times is able to take a look at the numbers and accurately say that the outlook is "grim," it's their conclusions that are faulty, or misguided:
Huh? Naturally, the Times fail to explain the Republicans' economic plan, but does it really believe the better option for the economy is a combination of "job retraining" programs, "boost[ing] educational achievement," "tax increases" and "rais[ing] the debt limit"?
In reality, Republican House majority leader Eric Cantor does actually have a grasp of the issue at hand -- and has even proposed a plan. As Larry Kudlow writes:
Recent Blog Posts