Celebrating the Stimulus?

We are now five years into the passage of the heralded stimulus bill that was supposed to end all our economic woes. Is it time to celebrate yet?

Anniversary

This whole “have-the-government-spend-more-money-and-prosperity-will-result” approach is nothing more than resurrected Keynesian theory. John Maynard Keynes was the economist who became the darling of those who sought to prime the pump of the economy by government expenditure. Richard Nixon, who at one point decided to impose wage-and-price controls on the private sector to resuscitate the economy, remarked that even he had become a Keynesian in economics. It was all the rage at one time.

Barack Obama has done his best to make it popular once again. Yet there is one important economics lesson he has missed: government can only spend what it takes away from those in the private sector, and when it does that, there is less to go around in that sector, thereby hurting the economy in the long run. Yes, some government jobs may be created via a stimulus, but they will be temporary and will contribute next to nothing to economic vitality.

Even though the unemployment figure has seemed to come down, it masks a terrible reality: we have seen the number of people in the job market drop precipitously; people are giving up on finding work and becoming more dependent on government for sustenance than ever before. One must ask, though, if that isn’t the goal of this administration anyway—after all, the Obama philosophy is the exaltation of the welfare state.

So, welcome to the anniversary, but you might have to remind people what we are celebrating.

Recovery

And what has been the overall effect of this spending spree for the long term?

Bigger Size

And what about the promises of what Obamacare would do for us all?

Close Call

I can imagine a scenario where the CBO itself may come under scrutiny:

Visit from IRS

Don’t laugh. Under this administration, anything is possible.

Ideology & the Height of Irresponsibility

I think the Obama inaugural is worth at least one more day’s commentary. But I’ll let the cartoonists carry most of the weight today. For instance, we all know the president takes his oath of office while putting his hand on the Bible. According to one cartoonist, perhaps this should have happened at that moment:

It didn’t. God rarely makes such a dramatic gesture; He prefers we figure it out because, frankly, it shouldn’t be that hard. All one has to do is look at Obama’s actions for the last four years. If we’re so comatose not to be aware of his attitude toward the rule of law, we deserve to suffer the consequences.

The speech itself also has generated commentary for its unabashed and unapologetic liberal/progressive nature. Again, why would anyone be surprised? When some were saying Obama would tack to the center to get support for Obamacare and other initiatives, I never bought it. He is too ideological for that. He boldly ventured where few publicly dare to go:

He’s also quite adept at appearing to venerate American tradition and reverence for the Founding. But if you listen closely, you realize he’s uprooting those principles, replacing them with an opposing ideology:

One of his points, in passing, was the importance of reasoned debate and how we all should refrain from name-calling. Are we really that absent-minded with respect to his own conduct?

In the entire speech, there was not one word about the danger of the mountain of national debt he has accumulated. He’s not really all that concerned about it. One of his mentors, economist John Maynard Keynes, who was largely responsible for convincing politicians that government spending was the pathway to prosperity, once famously [or infamously] remarked about his lack of concern over debt, “In the long run, we are all dead.” In other words, don’t worry about it—we all die anyway, so spend to the hilt.

The biggest problem with that scenario is that future generations will have to deal with what we’ve done. They will be stuck cleaning up the mess.

That’s the height of irresponsibility. That’s the kind of president we have.

Wrongheaded Economists . . . and Presidents Who Follow Them

Something happened the other day that has never happened before: when the president wanted to make a speech to a joint session of Congress, he met some resistance and had to change the date on which he wanted to speak. The White House scheduled his speech the same night as a Republican presidential debate at the Reagan Library. Spokesmen claim they didn’t intend to stomp on that event, but how believable is that? Really? House Speaker Boehner suggested President Obama switch to the next night. Surprisingly, he agreed.

It’s supposed to be another economics/jobs speech. Most commentators, even some on the liberal side, aren’t expecting much new. It looks to be a rehash of spending programs and minor/temporary stimuli he has proposed before. In other words, he has learned virtually nothing from his own past failures. Expectations aren’t high because it appears he doesn’t really understand the dangers we are facing.

The president claims we are experiencing growth; nearly everyone else examines the situation and calls it what it is—a continuing recession, no matter what some economists might say. Those are the economists Obama listens to, and they want more spending to “create” prosperity. I’ve never understood that logic.

Keynesian economics, which posits that government spending is the engine to jumpstart the economy, contradicts all sound economic reasoning. Government involvement in the economy is the problem, and just making a few minor adjustments is no solution at all:

Economists are very adept at offering theories, but the real world has a way of testing those theories and showing which ones are out of touch with reality:

I’m not saying all economists are wrong or useless. I’m just saying the ones who agree with the president, the very ones on whom he relies, are wrong and useless. Their ideological blindness is killing us.