August 9, 2010
Exposing Tyranny: GOVERNMENT INTERVENTIONS
We are reminded once again of the lay-man’s definition of insanity: Doing the same thing over and over again and expecting a different result!
Unfortunately this is what we have come to expect from Washington, always succumbing to the irresistable urge to “do something.”
Two recent articles highlight this fatal tendency: Thomas Sowell’s “A Non-Prediction,” and the WSJ’s recent article “The Obama Economy.” Both articles emphasize the folly of stimulus spending, in the wake of (are you surprised?) yet another announcement . . . of yet another plan . . . to spend yet another $50 billion . . . on yet another government make-work program . . . which will be borrowed against our children’s future!
The following is a timeline of this path towards serfdom:
Late 2007: Larry Summers (now Obama’s chief economic adviser) calls for federal stimulus to boots domestic demand — a stimulus that should be “timely, targeted and temporary.”
Peter Orszag, then at the CBO and now at the Obama White House, joins Summers in calling for stimulus.
Feb 2008: President Bush and Speaker Pelosi agree on a $168 billion stimulus of federal spending and temporary tax rebates.
The result:
GDP shows a slight blip of 0.6% in the 2Q of 2008 and then falls by 4% in the 3Q. Stimulus I fails.
Stimulus II is the $814 billion plan Congress passed at the behest of the same Larry Summers and White House economists Christina Romer and Jared Bernstein, who predicted the spending would keep unemployment below 8%!
The stimulus was composed of one-time tax rebates and spending, mostly on social programs like Medicaid as opposed to “shovel-ready projects.” (EPA environmental impact statements impose multi-year lead times in virtually all infrastructure projects.)
The Federal Reserve did its part pumping more than $2 trillion in liquidity by purchasing toxic securities from banks and holding interest rates near 0%.
In addition, Congress passed additional, smaller scoped stimulus spending bills: Cash-for-clunkers ($3 billion), $8,000 home-buyer’s tax credit, mortgage payment relief, jobless benefits extended from 26 to 99 weeks.
The result:
Another temporary blip for car and home sales which then fell off the cliff as soon as the programs ended.
After an initial inventory re-build period, we have hit stagnation with tepid growth too low to create enough jobs to match new job seekers entering the market.
Never before have we borrowed and spent so much money to so little effect. The only thing we have to show for the $3 trillion spent in the past 2 years is 14.9 million unemployed and a more powerful federal bureaucracy.
Conclusion:
It is time we learn from the lessons of history, and get the government out of our way. The American people are always ready to roll up their sleeves and get to work, but no one wants to risk their savings when Obama, Bernanke and our Congress (Jared Polis voted for virtually every dollar of this spending) are standing by, ready to snatch that money and crush new ventures before they can make any money. It is vital that we free ourselves from the yoke of people like Jared Polis, Obama, and their ilk, whose goal is to spend more money on government ‘services’, enhance their personal power, and assert control over virtually every aspect of our economic lives.
