President Obama Challenges the GOP With a Growth Standard

The most important statement in President Barack Obama’s compendium of the State of the Union was:

“Now, most of us agree that a plan to reduce the deficit must be part of our agenda. But let’s be clear: deficit reduction alone is not an economic plan. A growing economy that creates good, middle-class jobs – that must be the North Star that guides our efforts.

In those 49 words, the President articulated a standard by which all economic policies can be measured:  economic growth. Advocating growth as the “North Star” also positions the Democrats to take the growth issue away from the Republicans, who ignore this challenge at their peril.

Continued green-eyed obsession with projected 10-year budget deficits based on the jargon of baselines and assumptions that only a few can understand, and fewer still can master, will make them the party of austerity and zero-sum policies. And, that would position the Democrats to hold the Senate and win the House in the 2014 elections on the promise of overcoming the Republican opposition to a new growth agenda.

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... It is deplorable that so few of our elected officials, with the notable exceptions of Rep. Kevin Brady, prime sponsor of the Sound Dollar Act, and Rep. Marsha Blackburn, who successfully championed a national monetary commission as part of the 2012 GOP platform, have focused on moving monetary policy to center stage.  Sustained periods of real 4% growth were common before the final link between the dollar and gold was severed in 1971.  About half of all the 10-year periods between 1792 and 1971 experienced an annual average rate of more than 4%.  But, there has not been one, not even one 10-year period of 4% growth since the Federal Reserve took over responsibility for the value of a paper dollar. Monetary reform, especially a modern gold standard, is not inherently partisan.  And in terms of the growth standard, it promises an order of magnitude higher impact, with more winners and fewer losers than any other policy option on the table.

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