Tuesday, September 6, 2011

If the Opposite of Pro is Con .....

From the WSJ:

The sharp slowdown in the euro-zone economy during the second quarter was due to a combination of government spending cuts and a drop in consumer spending, raising doubts about the wisdom of pushing ahead with austerity programs and further increases in the European Central Bank's key interest rate.
I realize I'm preaching to the choir here, but news reports continually note that a decrease in government spending -- AKA austerity -- is a big contributing factor to the economic slowdown in Europe.  I find it so completely amazing that no one in Washington is even thinking about major programs -- especially at a time of weak growth and negative real interest rates on the 10-year Treasury.

This leads to an interesting idea -- is Congress hurting the economy?  
Democrats and Republicans say job creation is a top priority as they return to work this week, but there is a growing body of evidence that Congress is actually hurting the economy.

A protracted budget stalemate in the first half of the year caused nervous federal agencies to sit on billions of dollars that should have been circulating through the economy.

A vitriolic debate over raising the debt ceiling this summer spooked consumers, caused turmoil in financial markets and led to a first-ever downgrade of the United State's credit rating by Standard & Poor's.
A spat over subsidies for rural air serices in late July idled airport construction projects across the country and threw thousands temporarily out of work for several weeks.

Businesses that had to suspend their airport construction projects are still trying to recover from the disruption.