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Friday, June 10, 2011

Republicans are Creating Considerable Uncertainty

Using Google to search for "uncertainty economy," choosing one of the many, many entries from Republicans on this topic pretty much at random, and then changing a few passages in a WSJ editorial gives:

The economy's biggest problems is that Republicans have erected the biggest overhang of economic policy uncertainty that anyone can remember.
One big difference between Washington and private markets is that politicians think everything they do is free-standing. Markets, however, combine all the potential costs of Washington's policies and then decide whether to invest, or not. Consider what private decision-makers see in their future:
They see Republican attempts to shut-down the government if they don't get their way on the debt ceiling. This creates a high level of uncertainty and hurts business investment. There are also demands to cut the deficit even though it will hurt the economy and job creation, and this adds to the uncertainty. Republicans say they are committed to rolling back financial regulation leaving financial markets very uncertain about their regulatory futures. That's not the path to a robust recovery.
Republicans have created even more uncertainty through their promise to overturn health care legislation. And if that's not enough, Republicans want the Fed to raise interest rates to fight inflation immediately, a move that could hurt the economy. Uncertainty about how much influence the hard money types have within the Fed is creating even more uncertainty about the direction of policy. Republicans have also created considerable uncertainty over the future of Medicare, programs to help the unemployed, and other social programs. And opposition to tax increases makes budget issues even harder to forecast.
The bottom line is that since taking over the House, the Republicans have done nothing but create more and more of the uncertainty about the future they have complained about so loudly.
Nurturing a fragile economic recovery into a durable expansion requires policies that restore public confidence and reassure investors, risk-takers and employers. The Republican agenda is doing precisely the opposite, which is how you get subpar growth and fewer new jobs.

    Posted by on Friday, June 10, 2011 at 09:54 AM in Economics | Permalink  Comments (23)


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