In his recent State of the Union speech, President Obama extolled the virtues of "middle class economics," as a means of spurring economic growth and creating a more inclusive economy. Just what this entails is unclear, but President Obama says this "means helping folks afford child care, college, health care, a home, retirement, and my budget will address each of these issues, lowering the taxes of working families and putting thousands of dollars back into their pockets each year." On closer examination, the policy agenda the president is laying out is a tired mix of class warfare, new taxes, and more government spending.
For the most part, the president painted a rosy economic picture, highlighting increased job growth and shrinking deficits. While these trends are signs of a strengthening economy, there is much more that could be done to spur economic growth. It is not unusual for presidents to take credit for good economic news, but their actual impact on the economy is much more difficult to discern. One could just as easily point to the spending restrictions in the Budget Control Act as driving the recovery, restoring a degree of fiscal discipline that has brought the deficit down under $500 billion. Rather than debate the sources of the recovery, it is important to identify opportunities to spur further growth in a recovery that has been tepid when compared to earlier recessions.