... the percentage of the working-age population
that is actually working
has declined since the start of the [so-called] recovery..."
John Taylor writes in the Wall Street Journal that in his view,
... the best way to understand the problems confronting the American economy is to go back to the basic principles upon which the country was founded—economic freedom and political freedom.
Never mind that the "tea party" protests arose two and a half years ago because these Americans - almost instinctively - understood both the problem and the answer. They were ALREADY in touch with "the basic principles upon which the country was founded" because they had never LOST touch with those principles. It's too bad they didn't get any support at the time. Maybe if those in power had actually paid attention to what the people were saying, maybe some of what folks are suffering now could have been avoided. But that's all water under the bridge now, and as any tea party type would tell you, there's no use cryin' about it.
With apologies to Mr. Taylor for the interruption, we'll go back to more of his opinion.
With lessons learned from the century's tougher decades, including the Great Depression of the '30s and the Great Inflation of the '70s, America entered a period of unprecedented economic stability and growth in the '80s and '90s. Not only was job growth amazingly strong—44 million jobs were created during those expansions—it was a more stable and sustained growth period than ever before in American history.
Economic policy in the '80s and '90s was decidedly noninterventionist, especially in comparison with the damaging wage and price controls of the '70s. Attention was paid to the principles of economic and political liberty: limited government, incentives, private markets, and a predictable rule of law. Monetary policy focused on price stability. Tax reform led to lower marginal tax rates. Regulatory reform encouraged competition and innovation. Welfare reform devolved decisions to the states. And with strong economic growth and spending restraint, the federal budget moved into balance.
As the 21st century began, many hoped that applying these same limited-government and market-based policy principles to Social Security, education and health care would create greater opportunities and better lives for all Americans.
But policy veered in a different direction. Public officials from both parties apparently found the limited government approach to be a disadvantage, some simply because they wanted to do more—whether to tame the business cycle, increase homeownership, or provide the elderly with better drug coverage.
And so policy swung back in a more interventionist direction, with the federal government assuming greater powers. The result was not the intended improvement, but rather an epidemic of unintended consequences—a financial crisis, a great recession, ballooning debt and today's nonexistent recovery.
The change in policy direction did not occur overnight....
Nor will we be able to "change it back" overnight, so this will be a long-term struggle. But I know millions of people who are ready and willing to work on it.
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