By Peter Roff, Thomas Jefferson Street blog
Nearly 100 prominent U.S. economists including former CBO Director Douglas Holtz-Eakin, Ohio University’s Richard Vedder, and James C. Miller, III, who headed up the White House Office of Management and Budget under Ronald Reagan, are telling President Barack Obama that his economic stimulus has failed and that “immediate action is needed to rein in federal spending.”
In a letter to the president in which they refer to the latest jobs figures as “a source of disappointment and alarm,” the distinguished economists who signed it echo the concerns of others that the predominant share of the jobs created in May 2010 were temporary government jobs while the civilian labor force shrank by 322,000. “In addition,” they write, “46 percent of those out of work have been jobless for six months or longer--the first time in history that such a dire statistic has been recorded for the American economy.”
There are, they say, a series of hurdles ahead on the road to economic recovery including the new burdens being placed on small business by the federal government, the threat of tax hikes, and the newly-enacted healthcare law, which will discourage hiring, increase the deficit and, the chief actuary of the U.S. Department of Health and Human Services recently concluded, raise healthcare costs.
Obama is not alone in being singled out for criticism of his handling of the economy. The letter also references Congress's failure to propose a budget for “the first time in modern history.”
“Such a failure will mark a massive missed opportunity to help our economy grow and create private-sector jobs. Failing to restrict spending growth will further balloon the national debt, impede economic growth, and threaten our nation's long-term economic health,” they write.
What is needed, they say, is a new direction for U.S. economic policy.
“To support real economic growth and provide the spark needed to support creation of private-sector jobs,” the letter, which was made public Thursday by House Republican Leader John Boehner, says “immediate action is needed to rein in federal spending, prevent job-killing tax hikes through the expiration of current tax rates, and reverse the harmful effects of the health care law on small businesses, the engine of job creation in our economy.” [See which industries donated the most to Boehner.]