Wednesday, January 07, 2009

$1 Trillion Economic Stimulus Plan

President-elect Barack Obama has confirmed plans to spend between $800 billion to $1.3 trillion as part of an economic stimulus program.

Debt and spending money we don't have is what got us in this mess. The whole mortgage debacle was nothing but an empty suit:

-- "buy now, nothing down; the value of the property can only go up."
-- "refinance at unheard of rate; spend that money on new furniture, a new car, a boat, snowmobiles, a vacation for the family."
-- "spend, spend, spend; consume, consume, consume; for tomorrow we die."

There is absolutely no proof that government economic stimulus programs ever work. they have never worked in America -- Roosevelt's efforts failed. They have never worked in other countries. Japan is the one of the best case studies out there for failed monetary and economic policies.

Obama is saying things like we will spend a trillion new dollars "wisely, with oversight and transparency." The spending is nothing more than pork. Nancy Pelosi said the same thing when she took the reigns of the House. Obama is talking about 3 million new jobs with 600,000 coming from the federal government. Yea, that's what we need...more people working for the government (20 percent is not enough).

Clinton, Bush, Hassert, Gingrich, Pelosi, Dole, Lott, Daschle and Reid and every Representative and Senator over the past ten to twenty years have presided over the greatest expansion of government ever; I surmise in the history of the world. Obama will attempt to trump this. There's not reason to think he will not. That's who he is.

Printing more money and implementing traditional monetarism is what's occuring now. Couple that with Keynesian stimulus programs and you have a sure-firm recipe for disaster. They don't work; never have; never will.

Obama has aspirations of Roosevelt-like taxation on high earners. Like Roosevelt, I think he'd like to put a 90-100 percent tax rate on all high earners. Although he may not seek a quick repeal of President Bush's tax cuts for people making over $250,000, he plans on letting them expire in 2010.

Everything the federal government is doing now with it economic policy is wrong, be it economic stimulus, increasing the money supply, or bailing out various industries. They never mention cutting expenses. The modus operandi is try to do more with more people and more programs.

The bottom line is that the bubble will bust...even more than it already has. The result will be enormous tax increases. Who will pay? Those with money -- the few. Who will want them to pay? Those without the money -- the many.

The government's monetary policy will encourage a decrease in wealthy and middle class, and an increase in poor. The poor vote for those that promise them relief. It is a self-fulfilling model made popular by Roosevelt, Chavez and Putin.

Do politicians ever consider economic history?

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