Thursday, December 10, 2009

Stimulus #3 As Bad An Idea As Stimuli #1 and #2

I guess those elected to serve in government roles feel that the only way they can be effective is to create new programs. Programs that by the casual observer mean well on the surface but do nothing but help the few at the exclusion of the many without an actual cost:benefit analysis.

The Obama administration is contemplating a third stimulus program. Apparently Nancy Pelosi-Bush's Keynesian program #1 ($165 billion stimulus in February 2008) and Pelosi-Obama's Keynesian program #2 ($787 billion stimulus in February 2009) were not enough. Obama is contemplating program #3, looking much like the previous two, mostly ladden with infrastructure promises, but with some potential. He is proposing a hiring tax credit, zero capital gains on new investments in smaller companies, and enhanced expensing for small business.

It is being forecasted that TARP will cost less than expected -- that we will recover more than anticipated (losing only $42 billion). The problem is that the deficit is the highest it has every been and these programs do nothing to address that. They just compound the problem.

As was predicted with both stimuli programs, legislators see it as a permanent funding measure. A strong economy is a good way to address the deficit but not if government continues to spend more than it takes in.

Keynesian spending might make theoretical sense but it fails on practicality.

There is little hope that things will get better anytime soon. There are too many negatives, most created by the federal government. Extraordinary debt, a huge pending health care entitlement program, a pending energy policy that will add enormous costs to everything, two foreign wars with no end in sight, a government that is not a friend of business and capitalism.

Most people work for other people. These "other" people will take business risks only if they have a favorable chance of a reasonable return. If they are unwilling to make the investments, then there are no new jobs for the average Jane and Joe.

The federal government caused the recession and continues to prolong it with its stifling policies. Cut taxes on every one, incentivize new investment, growth and expansion. Put the stops on the next generation New Deal/Great Society social programs. Hope will be less government and less threats that government will intrude on the forces of capitalism.

I feel they current leadership will not do what's right because they want to do what liberals have always wanted to do: build and expand socialism.

I just wish we had politicians that built their platforms on truly reducing the size and scope of government. It just won't happen in mass.

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