The Show-Me Institute, a Libertarian think-tank in St. Louis, sponsored Harvard professor Jeffrey Miron’s lecture on “Obamanomics,” last Tuesday at the Plaza Library.
“Obamanomics” is a critique of President Barack Obama’s economic policy specifically centered on spending.
Libertarians agree tax cuts are more effective for economic stimulus.
Miron prefaced his presentation by acknowledging the Obama administration took control during an unstable economic period.
He doesn’t believe the economy was as bad as politicians let on or that the administration’s response will provide a long-term solution.
According to economist John Maynard Keynes, when an economy is in a recession, the government has two options.
One choice is to increase the purchasing of items through spending and the other is to cut taxes and allow people to spend their money.
“Both options assume that if people have extra income, they will spend some of it,” Miron said. “In the strict Keynesian logic, it actually doesn’t matter which way you go.”
Miron said if spending is the answer, it must be done efficiently and effectively.
Politicians are unable to execute this because they are too concerned with getting re-elected.
“We should always be looking at the cost-benefit analysis,” Miron said. “We should recognize that even if some [spending] is good, it doesn’t mean that more is always better. Before we undertook all this extra spending, we should have demanded convincing evidence that all the money spent was going to pass a cost-benefit analysis.”
He said the Obama administration never provided any evidence that proved all the initial spending would be good, simply because more government spending on these things is always good.
Another problem, he said, is it takes time to analyze the results of this spending.
“We have to choose good projects in a crisis,” Miron said. “Because in a crisis you have to move fast and that’s incredibly antithetical to doing it well.”
He referenced the administration’s handling of the housing crisis, the auto and banking bailouts and other issues as irrationally-quick decision making.
“We have missed the chance to engage in growing the pie as opposed to dividing it,” he said. “We are on a path to spend way more than we are receiving in tax revenues.”
He believes the United States has to either cut everything except Medicare and Medicaid or raise taxes, which would have an asphyxiating effect on the economy.
“President Obama had a chance to really fix it,” Miron said. “If anyone could have gotten re-elected after telling people that they wouldn’t receive their benefits until closer to age 75 as opposed to 65, President Obama could have.”
He said the politically gridlocked environment in Washington is good for Libertarians who he encouraged to vote for non-incumbents.
He thinks the Obama administration forced to compromise may prove to be similar to the last six years of the Clinton administration that, although not perfect, were certainly profitable.
“In a great world, you would have some libertarian benevolent dictator who would just repeal everything since the ’90s,” Miron said. “The 1790s.”
He doesn’t believe the economy was as bad as politicians let on or that the administration’s response will provide a long-term solution.
According to economist John Maynard Keynes, when an economy is in a recession, the government has two options.
One choice is to increase the purchasing of items through spending and the other is to cut taxes and allow people to spend their money.
“Both options assume that if people have extra income, they will spend some of it,” Miron said. “In the strict Keynesian logic, it actually doesn’t matter which way you go.”
Miron said if spending is the answer, it must be done efficiently and effectively.
Politicians are unable to execute this because they are too concerned with getting re-elected.
“We should always be looking at the cost-benefit analysis,” Miron said. “We should recognize that even if some [spending] is good, it doesn’t mean that more is always better. Before we undertook all this extra spending, we should have demanded convincing evidence that all the money spent was going to pass a cost-benefit analysis.”
He said the Obama administration never provided any evidence that proved all the initial spending would be good, simply because more government spending on these things is always good.
Another problem, he said, is it takes time to analyze the results of this spending.
“We have to choose good projects in a crisis,” Miron said. “Because in a crisis you have to move fast and that’s incredibly antithetical to doing it well.”
He referenced the administration’s handling of the housing crisis, the auto and banking bailouts and other issues as irrationally-quick decision making.
“We have missed the chance to engage in growing the pie as opposed to dividing it,” he said. “We are on a path to spend way more than we are receiving in tax revenues.”
He believes the United States has to either cut everything except Medicare and Medicaid or raise taxes, which would have an asphyxiating effect on the economy.
“President Obama had a chance to really fix it,” Miron said. “If anyone could have gotten re-elected after telling people that they wouldn’t receive their benefits until closer to age 75 as opposed to 65, President Obama could have.”
He said the politically gridlocked environment in Washington is good for Libertarians who he encouraged to vote for non-incumbents.
He thinks the Obama administration forced to compromise may prove to be similar to the last six years of the Clinton administration that, although not perfect, were certainly profitable.
“In a great world, you would have some libertarian benevolent dictator who would just repeal everything since the ’90s,” Miron said. “The 1790s.”
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