While many waited for Federal Reserve chairman Ben Bernanke to take the weight of the world markets on his Ivy League shoulders by declaring QE-4EVR-LOL!, the real economists at the Federal Reserve Bank in San Francisco came up with a more detailed explanation for the poor, dragging, sluggish U.S. economy.
What they found will astonish you.
And yes, this is a true story.
“[D]espite all the attention federal spending cuts and sequestration have received,” wrote Brian Lucking and Daniel Wilson in the FRBSF Economic Letter, “our calculations suggest they are not the main contributors to this projected drag [on U.S. GDP]. The excess fiscal drag on the horizon comes almost entirely from rising taxes. Specifically, we calculate that nine-tenths of that projected 1 percentage point excess fiscal drag comes from tax revenue rising faster than normal as a share of the economy.”
Let’s roll that again: “The excess fiscal drag on the horizon comes almost entirely from rising taxes.”
So, no to be outdone- amidst signs that the global economy is sputtering, with drooping economic forecasts for Asia, Europe and U.S. environs outside the D.C Beltway- Obama and his G8 pals stepped into the breach with a solution.
As this is a family publication, or at least a publication read by people who have families, I use the word “breach” to describe what they stepped into.
Others might use a more aromatic or pungent descriptor.
On a sunny day in Berlin, Obama stepped where many presidents have gone before, squinted into the sun, and bravely declared: “Give back that ring, Mr. Putin. Ich bin ein Patriot!”
Ha, ha, ha.
Ok. He really didn’t say that.
He wasn’t THAT brave. Obama ist kein Patriot.
Instead Mr. Obama and his G8 posse of poseurs addressed the collapse of their carefully crafted, worldwide economy by saying: “Hey. Let’s tax the economy some more.”
Really. That’s what they said. Again this is a true story.
At a time when the chair of the Federal Reserve Bank is using the economic equivalent of chicken wire and duct tape to keep the economy going- that is, U.S. government-backed mortgage securities- Obama and his G8 thugs are proposing that they can make us chickens more productive by taking more of our eggs.