from John Taylor in The Wall Street Journal, A Recovery Waiting to Be Liberated [1]
Were it not for the unusual drop in the labor force, the unemployment rate would be three percentage points higher, according to work by economists Chris Erceg of the Federal Reserve Board and Andrew Levin of the International Monetary Fund. They found in an October study that the slow recovery accounts for the “bulk of the recent decline in the labor-force participation rate.” Faster growth, they argue, would reverse the decline.
The U.S. economy is not a turtle, but a caged eagle ready to soar if released from the captivity of bad government policy. By putting the right policies in place—particularly personal and business tax reform with marginal rate cuts—the U.S. can turn the economy around quickly.