The Obama Inheritance
What sort of country will he leave behind?
1:06 PM, Jan 28, 2010 • By MATTHEW CONTINETTI
President Obama repeatedly invokes the problems he inherited when he assumed office. He has a point--the Bush administration departed while Americans were fighting overseas, the country was under threat from jihadists, the economy was in recession, unemployment was more than 7 percent, and a financial crisis continued to roil global markets. These are all pressing challenges.
But what will be Obama's estate?
What will the country be like when his term ends in 2013? This question is rarely asked. And of course it is impossible to know the answer. Still, Edward P. Lazear hazards a guess in today's Wall Street Journal:
The hope for Obama is that the second half of his term sees the beginning of a stunning economic boom--one that brings the unemployment level down considerably and restores American trust in the marketplace. Then the tax dollars pouring into government coffers would be able to pay for at least a portion of Obama's social spending. A boom would make the public more receptive to the tax increases that Obama wants for ideological and budgeting reasons, as well. It would be morning in America, liberal edition.
The problem is that Obama's economic strategy is premised on an idea--government spending alone--that does not have the best track record of fostering prosperity. Certainly the stimulus, while preserving many government jobs, has not spurred private sector employment. And yet last night Obama called for ... another, much smaller, stimulus.
Does the Obama economic team really think that an additional $150 billion of spending will make a dent in unemployment? Or is Obama more concerned about the political favor he will gain by dispensing money to favored constituencies, and by funding projects that make for good photo opportunities? By persisting with this strategy, the president risks discrediting the idea of massive deficit spending to combat recession and bring about economic recovery. That may be another legacy Obama bequeaths to his successor.