Obamanomics has become a very common term for the policies that Obama and his administration are using. However, the viewpoints regarding Obamanomics are, for the most part, polar opposites. Many people believe that he is failing, others think that he is doing a good job. Based solely upon the facts, I tend to side with the belief that he isn't doing to great of a job of regulating the economy.
Yes, he is working tirelessly. And he actually might be doing the right thing in the humanitarian scope of things, but that approach to running the country doesn't seem to be working. Obamanomics (seemingly) has failed economically. There are a few different reasons of course. Firstly, Obama and his administration did not account for the "long-run" effects of their spending. For example, a part of their spending went to "temporary tax cuts". Economic theory predicts that temporary tax cuts, unless expected to last in the long run, have little effect on consumer spending. This is because consumers generally save their profits and pay down their debts with short-term tax cuts. Another reason Obamanomics has appeared to fail is the large sum of money that went to relieve state governments of their debts. Moving the debt from the state governments to the Federal government does very little to solve our problem. In-fact it might have made it worse. Even though people may have received a year of benefits, their gains are only temporary and must eventually be "balanced" out with the negative effect that the temporary shift of money has on the economy.
As I said, Obamanomics may be doing the right thing humanitarian wise - giving lower income people health insurance and passing out unemployment benefits. But Obama and his administrations main focus should be, at least right now, getting our country back to its former economic "powerhouse" stance in the world.
http://online.wsj.com/article/SB10001424052748704629804575325233508651458.html
I agree that Obama's main focus should be getting our country back inline. Like you said above, short-term tax cuts only produce short-term positive effects. When dealing with the economy one cannot just look at short-term effects because the long-term effects are equally, if not more important. Obamanomics have been a problem from the beginning and it does not look too bright in the future, atleast when looking at obamanomics.
ReplyDeleteYou should also talk about Obama's choice to increase inflation in order to stimulate the economy. Although this is good in the fact that it increases spending it is driving commodities such as wool threw the roof. This disables companies to produce there products for a reasonable price.
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