Obamonomics

I watched the State of the Union address and pondered (as an educated economist) the pros and cons of raising the minimum wage.  The more I thought about it - the more I felt compelled to write a letter to the Cincinnati Enquirer.

‘Obamonomics’ creates money instantly

02/14/13 at 4:59pm by Letters Editor Comments

“It would mean customers with more money in their pockets” President Obama State of the Union Address.

Obamonomics is a curious new field of Economics. The President believes that with a wave of the governmental wand, new customers and new money can be created instantly. The first use of this wand was with the Affordable Healthcare Act. Instantly the Healthcare Insurance industry would find new customers with more money in their pockets. With that magic now complete, President Obama suggests government use the magic wand to increase minimum wage from $7.25/hr to $9/hr a mere 24% increase. Magically someone earning $14,500 per year will now earn almost $18,000 and this will mean ” the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead”.

But this counterfeit money will buy nothing in the long term. As small businesses exit; large businesses raise their prices; more illegal immigrants find entry for jobs paying below minimum wage; as entry jobs get outsourced; when charities eliminate staff and services; as job training opportunities disappear ; and as inflation drives us all into higher tax brackets – we will see that we all magically will pay more taxes to create this money.

Or maybe we should avoid the hidden taxes and just go further into debt. It’s no magic to create money – just take it from “working folks” and their children.

Garen Wisner
Indian Hill