May 25, 2012 Rabbi Yonason Goldson: Thinking About Faith Mark Clayton: Is Hillary's State Dept. hacking Al Qaeda? Not quite David G. Savage: Supreme Court limits protection against double jeopardy Ashley Powers: A nightmare, then conviction is tossed Erika Bolstad: Temple cancels Wasserman Schultz speech Deroy Murdock: WWII hero Karski to receive U.S. Medal of Freedom Kimberly Lankford: Health Coverage for College Grads New therapy helps tinnitus sufferers Solar Impulse takes off on first intercontinental flight without using a drop of fuel The Kosher Gourmet by Ethel G. Hofman: The former president of the International Association of Culinary Professionals, whose members included the likes of Julia Child, is back with contemporary Shavous cuisine: Ruby Fruit Soup, Sweet Noodle Kugel with Cheese, Key Lime Curd, Calsone Casserole Frittata with Wild Mushrooms, Sun-dried tomatoes and Olives, Baked Tilapia with Pepper Cheese Cream and Brown Sugar Shortbread May 24, 2012 Jeff Jacoby: The peace process battered Israel's reputation Near-nuclear nation threatens to walk out of summit unless it gets its way Clifford D. May: What Iran's Rulers Want Michael Muskal: 'Pro-choice' position hits record low, according to poll Chris Farrell: Are We in a Tech Bubble? 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Jewish World Review June 29, 2010 / 17 Tamuz 5770 The world's great evangelist for debt By Rich Lowry http://www.JewishWorldReview.com | A specter is haunting the world: the specter of Canada. To hear President Barack Obama's supporters tell it, Canadian Prime Minister Stephen Harper is a one-man economic wrecking crew. He led the charge at the G-8 summit to endorse the goal of advanced countries cutting their deficits in half by 2013. Obama only reluctantly went along, warning of the ill effects of what the intellectual architects of his stimulus package plaintively call "premature austerity." This dreaded austerity has treated our friendly neighbors to the north quite well. If deficit spending is the engine of growth, Canada should be a nation of Hoovervilles. Although it adopted a temporary stimulus during the current recession, Canada drastically cut spending as a percentage of GDP from the mid-1990s to 2008. In The Weekly Standard, Fred Barnes compares Canada's economic situation with that of the United States: "Its unemployment rate is lower, its budget deficit breathtakingly smaller (after nearly a decade of balanced budgets), its debt burden far lighter, its banks more stable." It's enough to put the most spectacularly boring phrase in journalism -- "worthwhile Canadian initiative" -- in a new light. In contrast to Harper, Obama has become the world's great evangelist for debt. What he won't do for human rights, he'll do for red ink. If President George W. Bush had as direct a clash with a European ally as Obama did with fiscally buttoned-up Germany during the G-8, he'd be condemned for his untoward unilateralism. The German finance minister was rude enough to point out that all of Obama's spending hasn't kept the U.S. unemployment rate from rising above 9 percent and that "there is no empirical proof that deficits aid growth." He could have gone further and noted that there's evidence that fiscal retrenchment stokes growth. As Harvard economists Alberto Alesina and Silvia Ardagna write in a 2009 study of fiscal policy in OECD countries, "We uncover several episodes in which spending cuts adopted to reduce deficits have been associated with economic expansions rather than recessions." In a recent review of the economic literature, American Enterprise Institute's Kevin Hassett concludes, "It is clear that fiscal consolidations can be stimulative." Obama nonetheless mustered a coalition of the profligate, including such fiscal exemplars as France and -- of course -- the Japanese. After repeated failed stimuli over the course of the past decade, Japan's debt reached almost 200 percent of GDP in 2009. It's closer to bailed-out Greece than to the powerhouse that once fueled fears of Japanese economic hegemony. Despite his jawboning at the G-8, Obama can no longer even count on his Democratic Congress for the requisite profligacy. Obama couldn't get a $110 billion "jobs" bill through the Senate ($30 billion of it financed through the deficit), even though it had been stripped down from its original price tag of $200 billion ($130 billion of it financed through the deficit). It's not clear why even the larger figure would have made an appreciable difference in a $14 trillion economy. The theory is that more aid to the states will prevent them from draconian, growth-suppressing budget cuts. But public-sector employment is not a key to economic health, as both spendthrift California (12.4 percent unemployment) and New Jersey (9.7 percent) can attest. Obama's evangelism for debt is in direct contrast to Clintonomics, the wonders of which once were extolled by liberals. Taking office after a (much milder) recession, Clinton decided to take steps to reduce a (much smaller) budget deficit to reassure markets. The economy continued to recover, and entered a rocket-booster period of growth soon after congressional Republicans instituted a serious regime of budget restraint. The strong economy eventually wiped out the budget deficit, so Obama is not wrong to talk about the importance of growth. He's just foolish to think the best way to foster it is vast deficit spending now, to be followed inexorably by massive tax increases later. Even the Canadians can see that. Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here. Comment by clicking here. Rich Lowry Archives © 2009 King Features Syndicate

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