Minding the Economy

July 25, 2007

America, are you concerned about the economy?

That may seem an odd question on the heels of my post about economic
inequality. Still I’m prompted to ask after reading the inaugural
politics-and-economics New York Times column by Tom Redburn.

Redburn suggests that Iraq, not the economy, is dominating the stage
for politicians and the American electorate–and that the president has
little control over the economy. He goes on to write:

All this, of course, doesn’t mean that Washington is irrelevant to the
economy. Far from it. But what matters much more is how government
policies on everything from health care and social security costs to
the environment affect the economy’s long-term health and underlying
productive capabilities. And that’s not what either the politicians or
the voters are paying much attention to right now.

Do You Know What You're Worth?

Boom-times these are not …

What happens in Iraq will play a big part in the future of the United
States and the world, so it seems fitting that it’s one of Americans’
top concerns. But Americans need to do what the Internet age has made
us so good at: multitasking. When it comes to domestic and international policies, we have to focus on more than one, and the
economy should be high on the list.

Redburn writes:

At a minimum, while the overall economy is clearly doing O.K., it’s
hard to argue that Americans are enjoying one of the greatest economic
booms in history.

I agree. How could we be in such a boom while the value of the dollar continues to slip?

American voters need to let politicians know–particularly those vying
for the White House–they’re paying attention to the economy.

Redburn closes his column by writing:

“The next president’s policies will likely have particularly large
economic implications,” said Mark Zandi, chief economist for Moody’s
Economy.com, “as he or she will have to decide whether to make
President Bush’s tax cuts permanent, address the ballooning cost of
entitlements, negotiate new immigration and trade policies, decide how
much more to spend in Iraq and grapple with how to address global
warming.”

“While economic policy will play a minor role in deciding the next
President,” Mr. Zandi added, “it is likely what the next President will
spend the most time on.”

Now’s as good a time as any to gather the facts on the presidential
candidates’ fiscal intentions. We owe it to ourselves and the
generations behind us.

… or are they?

Some see the economy a bit differently from Redburn. According to one
Denver venture capitalist, the economy is sizzling, and spending on the
war in Iraq isn’t a big deal. But he said that, inevitably, the U.S.
economy will melt down, possibly within the next 10-15 years, largely
owing to excessive government spending on entitlement programs like
Medicare.

One potential solution, he said, would be that every member of Congress take a basic Economy 101 course.

Not such a bad idea.