Debacle: Obama's War on Jobs and Growth and What We Can Do Now to Regain Our Future
During the 2008 presidential campaign, Barack Obama promised "a net spending cut" to make government smaller in order to reduce the deficit. But this huge increase in government spending and debt, and the resulting prospect of higher taxes, will make America a poorer country. Are Americans happier because the government has determined where this money should be spent? According to John Lott and Americans for Tax Reform President Grover Norquist, the answer is no, and in Debacle: Obama's War on Jobs and Growth and What We Can Do Now to Regain Our Future they explain why.
Obama's economic policies have raised unemployment, slowed economic growth, dramatically raised the national debt, squandered taxpayer money through poor investments, and damaged the housing market. The book explains why Obama's policies on spending, taxes, and regulation have all worked to harm the recovery, increase unemployment, and depress housing prices.
- The Congressional Budget Office estimates that the deficits that President Obama proposes for the years from 2011 through 2020 come to a staggering $126,000 per family of four, and John Lott and Grover Norquist make clear why the costs outweigh the benefits
- Explains why Keynesian economics is more a way of transferring wealth to political constituencies than a legitimate economic theory for understanding how the economy operates
- Posits that Obama's economic policies were more an opportunity "to do big things" than to solve the country's economic problems
Arguing that the policies of the Obama administration have created widespread economic chaos, Debacle is a bleak look at American finance from Grover Norquist.
Introduction The Players 1
Chapter 1 The Financial Crisis 7
Chapter 2 The Worst Recovery on Record 23
Chapter 3 The Stimulus Made Things Worse 35
Chapter 4 Would the Economy Have Been in Worse Shape without the Stimulus? 85
Chapter 5 Regulatory Thuggery 121
Chapter 6 We Have Seen What Happened under Obama. So Now What Do We Do? 159
Conclusion Obama’s Legacy 201
Appendix Looking at the Fifty States 211
About the Authors 217
John R. Lott, Jr is an economist who has held research and/or teaching positions at the University of Chicago, Yale, Stanford, UCLA, Wharton, and Rice, and was the chief economist at the United States Sentencing Commission from 1988 to 1989. Lott has published over 100 articles in academic journals. He has authored six books including More Guns, Less Crime; Freedomnomics; The Bias Against Guns; and Are Predatory Commitments Credible? He is a contributor and a weekly columnist for FoxNews.com. Lott's Opinion pieces have appeared in several publications, including the Wall Street Journal, the New York Times, the Los Angeles Times, the New York Post, USA Today, and the Chicago Tribune, and he has appeared on television programs including ABC and NBC National Evening News broadcasts, Fox News, The NewsHour with Jim Lehrer, and the Today Show. He received his PhD in economics from UCLA.
PUBLICATION DATE: March 5th, 2012
OBAMA’S WAR on JOBS and GROWTH and
WHAT WE CAN DO NOW to REGAIN OUR FUTURE
Grover G. Norquist & John R. Lott, Jr.
Have President Obama’s economic policies really improved the lives of Americans? Or has his stimulus package proved to be a disaster? In DEBACLE: OBAMA’S WAR on JOBS and GROWTH and WHAT WE CAN DO NOW to REGAIN OUR FUTURE (Wiley, March 2012), Grover G. Norquist, founder of Americans for Tax Reform, and economist John R. Lott, Jr. explain why the stimulus package has not only failed to improve the economy but, worse, has also harmed the lives of everyday working-class Americans. They offer a 12-step plan to rescue America from the Obama administration’s policies and return her to prosperity.
The authors assert that President Obama delivered the largest spending increases and the largest deficits in American history. Americans are no better for it. They have endured the worst economic recovery since the aftermath of the Great Depression. Incomes for the median household are falling. Poverty is rising by record amounts. Unemployment and job growth have been abysmal. Big government is punishing those who work hard and innovate and ultimately create jobs and wealth—the two key factors needed for economic recovery.
Each chapter in DEBACLE describes the causes of our economic and political crises, exploring the ways in which Obama’s economic policies have contributed to the high unemployment rate, slowed economic growth, higher national debt, and damaged the housing market. Toward the end of the book, in the chapter titled So What Do We Do Now?, the authors lay out a 12-step plan to get our country on the right track.
The Financial Catastrophe. DEBACLE gives an insightful analysis of the mortgage fraud crisis, including a portrait of the cozy relationship between Fannie Mae, Freddie Mac and the Obama administration. The result of Obama’s regulatory policies has only served to discourage lending for home mortgages, which has contributed to the severe, drawn-out slump of the important housing market.
The Worst Recovery Ever. While this recession no doubt has been one of the worst since the Great Depression, the “recovery” that followed the recent recession has clearly been the worst. Unemployment stood at over 9 percent as late as 30 months into Obama’s recovery. Many have simply given up looking for work. Job growth and wealth creation are stagnant. If that wasn’t bad enough, Obama’s tax cuts actually created unemployment as it increased effective marginal tax rates.
Spending Gone Wild. If we don’t rein in government spending now, our federal finances risk spinning completely out of control. The problem isn’t just the massive debt we have already accumulated but the promises the government has made. In the next 15 years, as the baby boomers retire and Social Security and Medicare costs soar, there will be few new workers to pick up the additional costs. The massive debt that we have accumulated will make it even more difficult to keep these already difficult-to-pay-for promises.
The Stimulus Made Things Worse, Not Better. Moving a trillion dollars from where people and companies would have spent it to where the government wants it spent also moves jobs. But people don’t instantly move from one job to another. All this chaos along with the changes created by Obama’s massive new regulations has made the economy worse. Indeed, comparisons with other countries show how our economy got worse relative to other countries right when our “Stimulus” was enacted. Not surprisingly, stimulus money didn’t create more jobs in the states that got the most money.
Would We Have Been Better Off Without The Stimulus? To add insult to injury, as the crisis worsened, Obama’s chief economist accused the American public of being unnecessarily fearful about the economy. But it was in fact the fear-mongering of Obama and his administration that aggravated the economic catastrophe and stifled the recovery even further! Would the economy be in better shape without the stimulus? Yes.
Regulatory Thuggery. Obama’s animosity toward the private sector and property rights is blatant. Businessmen are the bad guys. Under his watch, socialist takeovers have become the norm. Regulatory bureaucracies dominate with czar-like power. No wonder Mort Zuckerman said that Obama and his advisers are “without question the most hostile administration to business and the role of business that we have had in decades…It is totally hostile to business.”
Corporate Taxes. If you want to make American workers more productive and raise wages, investment has to be increased. The U.S. has the highest corporate tax rates, so hundreds of trillions of dollars are invested in international capital markets. Massive increases in investments can be obtained by lowering U.S. tax rates so that we are competitive with other countries. High taxes aren’t the only thing that discourages investment. American companies also face a heavy regulatory burden.
The 12-Step Plan (chapter 6 of DEBACLE)
Step 1: Never Raise Taxes (Ever). Let the Republican Party be branded as the party that will never raise your taxes. Period. No, it’s not a completely sufficient condition to achieving limited government and greater economic freedom, but it is a necessary first step. Let every candidate for office take The Taxpayer Protection Pledge and make a simple written commitment that he or she will oppose and vote against any and all efforts to increase taxes. Coca-Cola knows the value of a strong and protected brand. Republican candidates for office should follow suit.
Step 2: Keep the Focus on Spending, Not the Deficit. Don’t let the government trick you into focusing on the deficit rather than total government spending. The government spends too much. It should spend much less. There are only two ways to achieve that goal: Reduce government spending and grow the economy. Raising taxes does neither and only makes matters worse.
Step 3: Reform the Federal Tax Code to Tax Consumed Income Once at One Rate. The ultimate goal is to reduce and reform the present income tax system so that all Americans pay one single, low tax rate—a big improvement over the present mess. Reducing tax rates increases liberty by leaving Americans with more of what they earn and it greatly strengthens the national economy. That means among other things, eliminating the death tax and establishing a flat tax.
Step 4: Reform the Corporate Income Tax. Economic growth requires that we also reform the corporate income tax. Sure, Obama wants to reduce the corporate tax rate from 35% to 25%, but he also wants to hike the personal income tax rate to 50%. Who wins? Big businesses cozily connected to big government. Who gets hurt? The small, up-and-coming entrepreneurs who create the most jobs and the most real wealth in America.
Step 5: No Value-Added Tax (VAT). Unless you want America to become just like a European welfare state, just say no to the VAT. It’s just another tax increase and tax increases beget more tax increases. That’s the last thing America needs.
Step 6: Add the Warren Buffett Line to 1040 Statements. Let every tax return have a simple line at the end where those who believe the government can spend their money better than they would add a few extra dollars beyond what they “owe” in taxes. It has the wonderful advantage that those politicians who want to raise taxes on everyone else will be able to show the world whether they have been taking their own advice or if they are hypocrites who thing everyone else should pay more but they choose not to.
Step 7: Never Repeat the Debacle of 1982 or 1990. Don’t let tax increases be part of any “grand bargain” budget deal. It was the wrong solution back then and it is still the wrong solution now.
Step 8: Reform Government to Reduce Spending. Adopt the Ryan Plan, an outline for the federal government of an America that works. End corporate subsidies. Ban earmarks permanently. Open up America’s energy resources. Cut the federal workforce by 10%. Reform Freddie Mae and Fannie Mac. Reform Social Security for younger Americans.
Step 9: Reduce the Regulatory Burden. Americans need to arm themselves against the onslaught of regulations as they once organized to limit taxes and spending. Excessive government regulation is costing Americans more than $1.8 trillion each year. It’s time to roll back government interference that stifles growth and prosperity.
Step 10: Remember the States, Towns, Cities, and Counties. We need to keep an eye on how state and local governments are growing. We can’t permit out-of-control spending for the payment of state and local government workers any more than we can permit it for federal government workers.
Step 11: Robust Budget Balance Amendment versus Weak. Once tax hikes are gone forever and government reform is achieved, we need constitutional protection against the government regrouping and fighting to return to its dominant and domineering position in America.
Step 12: Remember Archimedes and His Lever. No, government reform can’t be achieved overnight. Or next month. Building a coalition to return America to prosperity and freedom will require years of planning and discipline, but it can be done. The sooner the Republicans win control of the Congress and presidency, the sooner we can begin to turn the country around. The less painful, the recover; the quicker, prosperity. President Reagan did it. We can too.
DEBACLE is must-reading for everyone concerned about America’s economic future. DEBACLE offers a realistic assessment of our situation and a positive program of reform. The problems it addresses and the solutions it proposes deserve careful consideration, especially as the upcoming Presidential election draws closer with each passing day.
About the Authors
Grover Norquist is the president of Americans for Tax Reform (ATR), a taxpayer advocacy group he founded in 1985 at the request of President Ronald Reagan. ATR is a coalition of individuals and businesses opposed to higher taxes at the federal, state, and local levels. ATR organizes the Taxpayer Protection Pledge, which asks all candidates for federal and state office to oppose all tax increases.
John R. Lott, Jr. is an economist who has held research or teaching positions at the University of Chicago, UCLA, Wharton, Stanford University and Rice University. He has published more than 100 scholarly articles. He is the author of six books, including More Guns, Less Crime, Freedomnomics, The Bias Against Guns. He is a FoxNews.com contributor and weekly columnist. His op-eds have appeared in The Wall Street Journal, The New York Times, The Los Angeles Times, and elsewhere. He received his Ph.D. in economics from UCLA in 1984.
OBAMA’S WAR on JOBS and GROWTH and
WHAT WE CAN DO NOW to REGAIN OUR FUTURE
Grover G. Norquist & John R. Lott, Jr.
Wiley; March 2012
Hardcover ISBN: 978-1-1181-8617-6
Also available in E-book formats