Tags: Harvard | Feldstein | Obama | GOP | Economy

Harvard’s Feldstein: Obama Won't Win by Blaming GOP for Economy

Monday, 30 April 2012 08:52 AM

The economy will determine the fate of this year's election and it doesn't look good at all for President Barak Obama, says Martin Feldstein, a Harvard economist and head of the Council of Economic Advisers under President Ronald Reagan.

Economic growth is slowing and the country continues to demand less and less jobs.

Positive economic indicators as of late stemmed from temporary factors, as 3 percent gross domestic product growth came from businesses restocking inventories and not from a surge in underlying demand.

Editor's Note: Obama’s Economic ‘Fix’ is In . . .

Households may be spending more but they're dipping into savings and aren't enjoying the fruits of an improving economy, while industrial output remains flat and housing remains in a bottoming-out phase at best.

"Looking ahead, strong headwinds imply that it will be difficult to achieve better economic performance in the rest of the year. Higher energy prices are reducing real household spending on non-energy goods and services; weakness in Europe and Asia will hurt America’s exports; state and local governments are cutting their spending; and concerns about higher taxes in 2013 will dampen both business investment and big-ticket consumer spending," Feldstein writes in a Project-Syndicate column, referring to the expiration of the Bush tax cuts at the end of this year.

A declining economy doesn't bode well for Obama's reelection bid.

"The economy is thus shaping up to be a serious liability for President Barack Obama, who is likely to place the blame on the conditions that he inherited from President George W. Bush, and on the Republican majority in the House of Representatives," Feldstein writes.

"But the public is likely to place the blame on the president, and surveys indicate that a growing number of Americans believe that Mitt Romney, the almost certain Republican candidate, would do a better job than Obama at managing the economy."

Now that Mitt Romney appears to be the likely GOP nominee, Democrats are gearing up to pitch to voters that the former Massachusetts governor will bring back the same policies as George W. Bush.

Take Romney's calls for tax relief.

"He offers his prescription as if somehow it's a new idea, folks, like something we haven't seen before, even worse, like something we haven't actually tried before," Vice President Joe Biden says of Romney's calls for tax cuts at a speech in New Hampshire, ABC News reports.

"Folks, we've seen the movie before," Biden says.

"It doesn't end well. It does not end well. Where has he been?"

Editor's Note: Obama’s Economic ‘Fix’ is In . . .

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