First, some good news.
And our economy is growing and the private sector is creating jobs.
That’s the glass-half-full way of looking at things.
But if you’re a glass-half-empty person, the news is not so cheerful. The economy is expanding and jobs are being created, but both at a slow rate.
In this interview, I share this dour perspective as I grouse about how Obama’s policies of higher taxes and bigger government are somewhat responsible for the weak job market. And I also explain that the anemic employment situation is partially to blame for low levels of saving for many households.
On the topic of the low savings rate, I should have explained that government policies undermine savings, both because of the tax code’s pro-consumption bias and because reasons to save are diminished thanks to government-provided subsidies for things such as housing, education, retirement, and health care.
In my second soundbite, I jump to a different topic. I assert that it’s a good thing that we’re going to have gridlock for the next couple of years – particularly if the alternative is the kind of damaging legislation such as the faux stimulus and Obamacare that we got in the President’s first two years.
But I do warn that permanent gridlock is not a good idea. We need genuine entitlement reform at some point in the not-so-distant future if we want to avoid becoming another Greece.
And don’t delude yourself. If policy is left on auto-pilot, the burden of government spending is going to skyrocket. Indeed, both the Bank for International Settlements and the Organization for Economic Cooperation and Development estimate that America’s long-run fiscal problems are more severe than those is most European welfare states.