Obama to Public: If At First You Don’t Succeed, Spend More Money
July 10, 2009
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Posted by Michael S. Langston
Before the last stimulus bill, the Obama administration trotted out how dire and desperate things are and would be without the all powerful government. According to their reports, unemployment rates without the money would hit 10%, while with spending would not go above 8% (here).
By the government’s own standards and the new unemployment numbers of 9.5%, they have failed. But like true politicians, facts are just numbers that haven’t yet been spun.
With trillions of dollars in “stimulus” already spent on pet projects, buying up failed companies, green jobs, and anything else the government can think of, the only thing they are now positive of is that it wasn’t enough.
Through Mr. Obama’s remarks after the G8 summit (here):
“While our markets are improving, too many people are still struggling,” Obama said at a press conference in L’Aquila, Italy after a summit of the Group of Eight nations. “Full recovery is still a ways off.”
and senior administration officials putting our feelers (here):
Senior administration officials think further stimulus might eventually be needed but they do not want to have this fight now. Both the economics and the politics call for postponing a decision to late this year or early in 2010.
& of course, the sage Warren Buffet’s self-serving advice (here):
As folks in Washington and the rest of the country grumble about the depressed job market and underwhelming consumer spending reports, the calls for a second stimulus continue.
“I think that a second one may well be called for,” Warren Buffett , the widely respected investor, said Thursday morning on ABC’s “Good Morning America.”
It appears we’re on a path to spend more money we don’t have. Effectively, the government is acting just like the poor investors and home buyers did – buying a lot of stuff for too much money, which is completely borrowed.
As Cato notes:
Investors understand that increased government spending diverts valuable resources away from the private sector and ends up imposing even more demoralizing taxes on labor and capital.
A major study of 18 large economies by Alberto Alesina of Harvard and three colleagues appeared in the 2002 American Economic Review. This paper, “Fiscal Policy, Profits and Investment” found that the surest way to make economies boom can be through deep cuts in government spending–the exact opposite of the “fiscal stimulus” snake oil.
Like the problems of social security, medicare, and medicaid though, we’re simply going to borrow all of this money and kick the major problems down the road for whatever generation will suffer from our mistakes. They will pay the higher taxes for lower benefits all because we can’t control our spending.
So for those playing the home game – the solution to alcoholism is to drink, just as the solution to a spending binge is more spending.
Categories: Economics
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Tags: Deficit Spending, Economics, Fiscal Irresponsibility, G8, government spending, Obama Administration, Politics, Stimulus, Unemployment, Wasteful Spending
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