Tags: Taylor | economic | policy | GDP

John Taylor: 'Poor Economic Policies' Have Caused Sluggish Expansion

By    |   Wednesday, 11 September 2013 08:25 AM

The flawed economic policy of the past few years is responsible for the languid pace of economic recovery, says Stanford University economist John Taylor.

GDP growth has slumped to 1.6 percent in year ended June 30, down from 2.8 percent in the prior 12 months, he writes in a Wall Street Journal opinion piece.

"The poor economic policies of the past few years is a reasonable explanation for today's weak economy," Taylor says.

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Taylor, an economic policy official under President George W. Bush, cites an array of government policies to explain the slowdown. "Fiscal policy has at best provided temporary stimulus before fading away with no sustainable impact on growth," he explains.

"More costly and confusing regulations — including the many mandates in the Affordable Care Act and the Dodd-Frank Act — have reduced the willingness of firms to invest and hire."

Then there's the Federal Reserve. "[It] has employed a variety of unconventional and unpredictable monetary policies with not very successful results," Taylor writes.

And the future as envisioned by President Obama and his supporters doesn't offer much hope. "The policies . . . [they favor] — higher tax rates, more intrusive regulations, more targeted fiscal policies — will not revive the economy," he argues.

"More likely they will perpetuate the weak economy we have and cause real incomes — including for those in the middle — to continue to stagnate."

Not everyone is so pessimistic about the economy, especially after it grew 2.5 percent in the second quarter.

"We are likely now moving past the peak of fiscal drag, and, as we do, improving underlying private demand should support a pickup in GDP growth," Ted Wieseman, an economist at Morgan Stanley, tells Reuters.

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Economy
The flawed economic policy of the past few years is responsible for the languid pace of economic recovery, says Stanford University economist John Taylor.
Taylor,economic,policy,GDP
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2013-25-11
Wednesday, 11 September 2013 08:25 AM
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