Baseline Scenario’s take on Obama’s speech

Baseline Scenario’s reaction:

…the speech was strong on long-term issues, but did not shed much-needed light on how we can emerge from our short-term challenges. One way to position this is to say that if we really are facing a potential “lost decade,” then talking about the long term is a bit premature. Imagine ten years of zero real GDP growth as opposed to 2.5% real GDP growth with population continue to grow at 1-1.5% or something like that. That would take decades to make up if it is even possible and could outweigh any well-meaning efforts to bolster our long-term government finances.

…Obama’s speech yesterday was mainly about four things: energy, health care, education, and fiscal sustainability. That maps pretty closely to what I think our priorities should be.

Topics: Economy