Wrong-way Obama (2-12-09)

There's two ways of fixing things......
"ECONOMIC STIMULUS - PART 1 (Introduction)"


It appears democrats, after blasting former President Bush for doubling the national debt in eight years, are set to do more of the same. Suddenly, they too argue that deficit spending and debt accumulation does not matter. With the prior claims from democrats that "debt = higher interest rates" not coming to pass, they now want to test it's limits through the largest expansion of government since FDR's failed experiments. They are now hip to the idea of implementing the largest spending package,(not stimulus package), in American history. 2010 spending from this bill would more than double the New Deal spending of 1936, in today's dollars. FDR, despite doubling federal spending and becoming the largest employer in the country, saw unemployment after the New Deal was enacted remained above 20% until the WWII war machine was revved up. Now despite the absolute failure of FDR's socialist plan, democrats today have decided to "double down" and "HOPE for CHANGE" in the results. Keynesian brainwashed, hack economists still defend spending as stimulus claiming the New Deal was not large enough. Assuming their correct and spending at some level does stimulate the economy, it's still horribly inefficient compared to tax cut measures.
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Socialist democrat lawmakers claim today's spending will be timely, "but it's well thought out", targeted, "yet massive", and temporary, "even thou it's politically difficult to end programs that may show some signs of benefit." They miss the mark on all three. There is no good time for this amount of debt all at once. It's targeted mainly in spending that has, in the past, proved to do no more than increase government size. And the only thing temporary about it is the temporary jobs it may, or may not, create.
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This plan does have tax cuts. A proved method of stimulus. But it's only 1/3 of the package and a good amount of it, if your intellectually honest with yourself, is no more than socialist welfare. The method of tax cuts as stimulus has been shouted down by the Obama administration as a tired, old ideological policy of the past that have put us in this situation. Yet they're going to use this method to deliver their socialist redistribution program to the poor. They were able to sell this socialist tenant due to the inclusion of lower and middle class citizens that actually pay taxes. Truth is tax cuts are the best economic stimulus there is. But not temporary tax cuts. Making them temporary kills the effect. If you can't count on their longevity, you don't change your budget or spending habits. You may spend the money. You may use it to pay off creditors or just bank it for emergencies. When you know it's a one time deal, or in this case, two year deal, your spending psychology remains largely unchanged. It's artificial respiration at best. And ask your doctor what happens to most people after being taken of a respirator. That's right, most die. It's just a delay tactic. Sure, help now will be appreciated, but it does little to change your perception of, or confidence in, the future. Obama's statement that tax cuts are tired, old and failed is correct if he's talking about them in the form of tax rebate checks or tax credits paid out $10 per week for two years. They are ineffective and costly. Unlike permanent tax rate cuts, they never create actual stimulus of the economy and therefore do not boost government revenue to, at least partially, pay for themselves. Guess what type of tax cut Obama decided to go with. That's right, the only one that would allow him to redistribute wealth. The ineffective, costly, tired, old, failed, temporary kind.
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The massive spending will not work as stimulus! Spend some time looking at Roosevelt's "New Deal" programs. Talk about failed policies of the past. He was a total socialist fuck up. Through massive spending, Roosevelt never reduced the 25% unemployment rate more than five percentage points until WWII. Even then, while the economy and unemployment picture improved, people lived under miserable conditions due to the forced rationing he imposed for the war effort. The massive interstate highways act implemented in the 50's was followed by a 2% increase in unemployment two years later. Look at the trillions Japan has spent as they responded to a 1990's recession. They spent 130% the size of their economy, in ten different "stimulus" bills over eight years. The ten years they term the "lost decade". Their economy has remained relatively stagnant. Were spending 5% the size of our economy, only 75% of that over the next two years, and inspect better results. Simply turning on a money machine and pouring money into roads and bridges will only create a few replacement jobs for the ones already lost. And those jobs will only last until the spending package is spent off. This massive debt is likely to create a long-term government debt bubble that will succeed in increasing interest rates, thus deterring private investment and further extending the recession. This is why, when asked, they say this bill will "save or create" 3.5 million jobs. You can't measure saved jobs so you can't measure this plans failure. In my opinion the only thing this spending bill will create is government growth, government expense, and government debt.
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Its been proved time after time throughout the course of history, that during times of recession or economic downturn, tax cuts are a much more effective means of stimulating the economy than increased government spending. Research for yourself. Compare the actions taken by Kennedy, Regan and Bush to that of FDR, Johnson and Carter. The socialist presidents listed last, not only had little effective stimulus created by their policies, they have instituted budgetary headaches still felt by presidents and lawmakers today.
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Republicans offered up a plan that, scored through Obamas own economic advisers' metric, spent 1/2 the money and created twice the jobs. Through tax stimulus, you actually boost the private sector economy, instead of creating a, government run, socialist economy to parallel and hopefully lend some boost to the real economy. Temporary stimulus! Who wants to incur this much debt for a couple years of modest bump. Talk about a surge that wont work. This spending package is lacking in many different ways. It does nothing to spur investment, does nothing to increase consumer confidence, and it does nothing to add to long term employment of anyone in the private sector.
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It has been estimated that each job this spending package creates will cost us $300,000. And this bill will eventually have to be paid for, costing each American man, woman and child alive today $3000. Hell, if were the ones going to have to pay this much, why not just give us out this much in tax rebate checks. A family of four would get $12,000!! The actual cost of this bill is impossible to estimate. There is the cost of the programs, the interest on the money borrowed, There's the devaluing of the dollar, the possibility of hyperinflation only seen in the most irresponsible third world countries from printing far too much currency. The lost confidence of foreign investors as the plan fails and our debt amount starts to indicate to the world that we will continue to be mismanaged for the foreseeable future. And last, but certainly not least, is the lost standing we will have in geopolitical issues involving counties that hold a good amount of our debt. The leverage this gives China and Saudi Arabia quickly turns a domestic fiscal policy blunder into a massive foreign policy and national security disaster.