The President’s Economic Illiteracy

by Kevin A. Hassett

If you wonder why unemployment is so high in the U.S., check out the brain-dead economics in the SOTU address.

People with high incomes pay lower taxes because an optimal tax policy taxes consumption not income. While our code is not optimal, it tilts in that direction. I doubt that Warren Buffett understands that the “Buffett Rule” is economically illiterate, and marks him for all of history, after posterity forgets his billions, as an ignorant rube who pushed the U.S. toward inefficient tax policy. I doubt that President Obama understands that the academic community that previously embraced him will have a hard time maintaining the fiction that he is a significant intellectual when he decides to jettison decades of academic literature in favor of a populist Hail Mary pass that is indefensible.