The three elements that Mr. Rauch suggests are:
1. Long term fiscal retrenchment - He suggests something along the lines of Simpson-Bowles; the national commission that Mr. Obama established to look at long term fiscal reform. Given that he created the commission and established its objectives, it would be a pity to waste all that effort.
2. Short term economic stimulus - Given the patronage and graft evident in the 2009 stimulus as well as the wholesale transfer of American funds to European banks, I have my doubts about Mr. Obama's ability to pull off a proper stimulus. But if it were coupled with the other elements with an emphasis on the "fiscal retrenchment" now instead of in the ubiquitous "out years", then I am sure that we could survive another round of modest stimulus.
3. A two-year extension on the debt ceiling - As with the stimulus, I think this is something that could be worked out if enough emphasis were placed on spending reductions.
But the problem is that Mr. Rauch has properly qualified his suggested course of action.
The president’s failure, so far, to show that he understands the scope of the economy’s problems and knows how to fix them does not stem from having nothing to say: investment in education, energy, innovation and infrastructure are reasonable things. But they are also slow-acting, small-bore stuff. Such talk does not include additional economic stimulus, an element that many economists, especially Democratic-leaning ones, consider crucial to prevent a double-dip recession. Nor does it deal realistically with long-term growth in spending.Emphasis added.
The problem is that he does not understand how the economy works. Instead he prefers to trade upon stoking class envy and the lust for unearned wealth.
Unless that changes, Mr. Obama is doomed to be a one term President.
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