What Do You Want?

From David Rosenburg at Gluskin Sheff:
"...President Obama is now running fiscal deficits that would have made FDR blush.
If the consensus is correct that the recession is behind us, then what we have on our hands is the mother of all jobless recoveries

...But while Uncle Sam can try to stimulate spending on autos and housing and even mortgage credit via the myriad of policy measures that have been undertaken, the return to job creation is as elusive as ever. It is hard to fathom that, according to the White House estimates earlier this year, the stimulus was supposed to help cap the unemployment rate at 8.5%. Here we are today with both an unemployment rate and a fiscal deficit-to-GDP ratio both north of 10%. While real GDP did manage to rebound at a 3.5% annual rate in Q3 — stagnant if not for the government incursion..."

TW: This statement frames the messed up nature of our current economic discussions. One, Rosenberg conflates "Obama" with the current deficits. The vast bulk of the current deficit (and future deficits) are structural and would have been very high regardless of the POTUS. When economies contract tax revenues contract as well and things like unemployment spending, food stamps etc. go up. The graph below portrays the relative impact of various factors.

Two, Rosenberg seemingly laments interventions in things like clunkers etc. but then mentions that BUT FOR "gov't intervention" growth in Q# would have been stagnant. This is a common utterance from Wall Street- they bitch about government intervention but then what would they prefer? Financial Armageddon? Contractionary fiscal policies in the face of a massive demand contraction? We know they do not want financial regulation, what do they want?

I realize folks just want everything magically fixed- lower taxes, higher employment, lower deficits, a smidge of inflation but not too much. Let me know if you know where the magic button is. I am highly confident it is not anywhere near the tea-bagging fools.