Debacle: Obama's War on Jobs and Growth and What We Can Do Now to Regain Our Future

by Grover Glenn Norquist, John R. Lott Jr.

Overview

Are Americans better off today than they were before Barack Obama was elected to office? Americans for Tax Reform President Grover Norquist and economist John Lott don't think so, and in Debacle: Obama's War on Jobs and Growth and What We Can Do Now to Regain Our Future, they argue that huge increases in government spending, mounting debt, massive new regulations, and higher effective marginal income taxes are seriously hurting the country.

Exploring the ways in which Obama's economic policies have contributed to the high unemployment rate, slowed economic growth, produced dramatically higher national debt, and damaged the housing market, Norquist and Lott contend that Obama's views on spending, taxes, and regulation have worked to harm—rather than help—our recovery from the so-called "Great Recession."

Arguing that the Obama administration used the financial crisis more as an opportunity "to do big things" than to solve the country's economic problems, the book examines the players involved in the meltdown, Obama's failed attempts to put the country back on track, and much more. Rejecting the President's use of Keynesian economics as a way of giving money to wealthy political supporters rather than as a legitimate way of understanding how the economy operates, Norquist and Lott offer a fresh perspective.

The cost of Obama's policies have greatly outweighed the benefits, and Norquist and Lott have solutions for getting the country back on track. Offering a comprehensive 12-step plan that covers everything from reforming the federal tax code to reducing industry regulation, Debacle outlines a clear path to putting America back in pole position.

Product Details

ISBN-13:	9781118240472
Publisher:	Wiley
Publication date:	02/02/2012
Sold by:	JOHN WILEY & SONS
Format:	eBook
Pages:	240
File size:	4 MB

About the Author

GROVER G. NORQUIST Is President of Americans for Tax Reform (ATR), a taxpayer advocacy group he founded in 1985 at the request of President Reagan. ATR is a coalition of taxpayer groups, individuals, and businesses opposed to higher taxes at the federal, state, and local levels. It organizes the Taxpayer Protection Pledge, which asks all candidates for federal and state office to commit themselves in writing to oppose all tax increases.

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.

Table of Contents

Acknowledgments xi

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

Index 219

Interviews

Debacle Author Q&A with Grover Norquist and John Lott

In Debacle, you say that this has been the worst recovery on record - how so?

Unemployment stayed at least at 9 percent 30 months into Obama's economic recovery. The very recent decline in unemployment is largely an illusion created by many workers giving up looking for work. Since the beginning of the Obama administration, labor force participation shrunk by over 4 million, and that was true despite a steadily growing working-age population. This phenomenon of discouraged workers typically occurs during a recession, not during the subsequent recovery.

Looking at GDP growth, median household income, poverty and other measures there has never been such a bad recovery. The only comparable recovery is during the Great Depression, another case where large government spending was tried in an attempt to speed up the recovery.

What would you say was Obama's greatest mistake?

No doubt the biggest mistakes were the original Stimulus and the four other stimulus packages, such as the Public Sector Jobs Bill. The resources are taken out of one part of the private sector and moved someplace else. That is true regardless if it is financed by higher taxes or additional government borrowing.

When government interferes and causes money and people to move from one sector to another—say, from oil to wind energy in the preceding example—that increases unemployment. Workers cannot just instantly move from one job to another. In reality, it takes awhile to find out where the new jobs are, so even if the total number of jobs destroyed is the same as the total numbers of jobs eventually created by government, unemployment increases at least temporarily.

Wouldn't the economy have been even worse without the Stimulus?

No, it would not. Look at other countries, countries that did not institute massive spending increases. They fared much better getting out of the recession.

Also looking across the various states one would have expected the ones receiving more stimulus money to be the ones creating the most additional jobs, but that is not the case. The Stimulus failed to create more jobs in the states that got the most money.

Furthermore, it appears that Stimulus money was spread around according to political criteria, not according to where the resources would come to the best economic use. States that got hit hardest received the least Stimulus money. Instead, it was the most heavily Democratic states that got the most money.

What recommendation would you make to restore economic strength?

There are hundreds of trillions of dollars around the world available to invest, and there are obvious reasons they are not flowing into America. A tax structure that had once made the United States a relatively attractive place to invest now punishes investors. Why continue investing in the United States when investors get to keep 15 cents more of every dollar they make when they invest in a country such as Canada? The gap with other developed countries is even larger.

Our rank in terms of business regulations has slipped the least, falling from tenth in 2008 to thirteenth in 2011. But the other changes have been dramatic, particularly when one considers how short a period of time is involved. Over the same time period, rankings on investment and financial regulations have plummeted from eleventh to twenty-eighth and from eighth to eighteenth, respectively. Property rights in the United States are also much less secure relative to other countries than they used to be, with the U.S. rank falling from fifth to seventeenth. Our tax system has also become particularly dysfunctional, going from 48th in rank in 1995 to 139th in 2011.

If we want to increase worker productivity and thus raise wages, we are going to increase investments. To do that, we are going to have to make the US a more attractive place to invest in.