The economy is less in need of stimulus and more in need of a Congress that understands its strengths. Two sectors in particular are proving their resilience: Export-oriented businesses are thriving, because the dollar’s relative weakness is making U.S. products a good buy overseas, and small businesses are still creating jobs even amidst the broader economic slowdown. But rather than opening new markets for our exporters, this Congress has demonstrated its hostility to trade by passing a bloated farm bill that has enraged our World Trade Organization partners, with whom we are trying to negotiate a new market-opening deal. This is to say nothing of the U.S.-Colombia Free Trade Agreement, which continues to languish in congressional limbo. U.S. exporters to Colombia have paid over $1 billion in tariffs since the administration inked the deal over 18 months ago. As for small businesses, Obama’s plan to raise the top two tax rates would affect hundreds of thousands whose proprietors file as individual rate-payers. If the Democrats were serious about passing legislation that would stimulate the economy, then they would be pledging to keep taxes low, cut the corporate rate, remove barriers to energy exploration, and pursue market-opening trade agreements.
Net exports are the strength of this economy that has witnessed its employment-population ratio decline to 62.4%? Look – I’m all in favor of expenditure-switching policies such as allowing the currency to devalue. Oh wait – NRO’s Lawrence Kudlow and John McCain wants dollar appreciation. Never mind! But this notion that more free trade agreements will lead to aggregate demand expansion is absurd. While reducing foreign tariffs may help boost exports, reducing our tariffs on foreign goods tends to increase imports. So I guess the National Review is left with endorsing more fiscal irresponsibility!