Reality Check

Well, I have been gone for practically an eternity. Now it is apparent that my previous posts were an unrestrained exercise in futility, Barack Obama is our president. I wish our president the best of luck and sincerely hope that this is a prosperous time for the United States. I haven't given my thoughts on credit failings, financial troubles, economic contraction, or the already enacted stimuli, but now I have been pushed to act.

Currenly, the Senate is debating a 900 billion dollar "stimulus package", backed by the Obama administration. First of all, this 900 billion dollars is NOT a stimulus. The majority of the bill focuses over 600 billion dollars on new spending, and the balance is doled out in poorly structured tax cuts.

The 600 billion dollars in spending includes tremendous amounts of pork, but the stimulus itself comes in the form of infrastructure projects. Hmmm, this sounds eerily familiar. In the 1930's the New Deal was aimed at doing the exact same thing. Ready for this..... It didn't work, not in the least bit. Unemployment stayed at almost exactly the same levels from the passage of the New Deal to start of World War II. Decades of economic trial and error have proven that Keynesian fiscal stimuli are ineffective. Furthermore, the projects proposed in the Obama stimulus, that he touts as so urgent, will not come to fruition or even start for another few years. Friedman, the economist not the populist writer, concluded that government fiscal stimulus," hampered recovery from the contraction, prolonged and added to unemployment and set the stage for ever more intrusive and costly government."

So, looking beyond the pork and the waste of the bill, its premise is entirely flawed. Government spending will not create jobs and will not increase consumer spending. Consumers base their spending patterns on long-term income projections. Neither government spending nor the tax rebate checks included within the bill will positively change long-term income projections.

Now, for what truly angers me. I was pleased that House Republicans unanimously opposed this bogus piece of legislation and that ten Democrats also voted against it, but the bil still passed the House and is moving on to the Senate. Today, our President, who did not consult the opposition once in the construction of the bill, encouraged the bill's opponents to put their modest differences aside. Wait, modest differences? The implementation or timing of a small tax cut would be a modest difference, but unified opposition to a bill that doesn't accomplish any real stimulus and costs the American tax payer 900 billion dollars, I would not call that a modest difference.

Cal it arrogance, simple naivete, or even stupidity, but President Obama needs a reality check.