The proposal to cut payroll taxes might actually be a good idea if it did not accelerate the collapse of Social Security and thereby hasten the day when our multitrillion-dollar unfunded liabilities will come due.
How does Obama intend to pay for this grab bag of macroeconomic malfeasance? The short form: require Medicare and Medicaid to lower their reimbursement rates (already below-market); raise taxes on the big, nasty corporations (already the highest in the world); and punt the rest of the decision to Congress, which Obama can then blame when the necessary cuts either don’t materialize or are not to Obama’s liking.
If Mr. Obama truly wishes to see unemployment figures decline, and thus his chances at re-election improve, he would be well advised to simply get out of the way: flatten the tax code, rein in the federal bureaucracy, end subsidies to politically connected organizations ranging from farmers to Goldman Sachs, remove artificial legal barriers to employing low-skilled workers and convicts, and reform, repeal, or delegate to states the myriad entitlement programs the federal government now manages. But above all, he, and the Congress, should withdraw from their delusion that they can plan the economy better than the hundreds of millions of Americans who live in it.
Andrew Glidden is a writer living in Berkeley, California.