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Obama's Totally Political Economic Stimulus

December 24, 2008 RSS Feed Print

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The depressing reality of the trillion-dollar Obama economic stimulus -- I mean, economic "recovery" -- plan is slowly emerging. It seems more about about liberal politics and liberal economic agendas than reigniting the American economy. Sorry. More evidence comes in this WaPo story. Here is the lede:

In one of the first internal struggles of the incoming Obama administration, environmentalists and smart-growth advocates are trying to shift the priorities of the economic stimulus plan that will be introduced in Congress next month away from allocating tens of billions of dollars to highways, bridges and other traditional infrastructure spending to more projects that create "green-collar" jobs.

Me: There you have it. On one side you have the greenies who want to use our current economic crisis to promote their environmental agenda. And on the other side you have the "old economy," union-types who want to use our current economic crisis to attract hundreds of billions of dollars to union construction jobs. (And don't forget the local government officials with visions of bike paths and aquariums and duck ponds dancing in their heads.)

None of this stuff will boost the economy anytime soon, which is probably why Obama has quit using the word "stimulus" and has been talking down America's near-term economic prospects. Remember what incoming White House Chief of Staff Rahm Emanuel said: "You never want a serious crisis to go to waste. This crisis provides the opportunity for us to do things that you could not do before." And that is why the Obamacrats are pushing for this package to be passed in January. Time is of the political essence. You know how long it took to get Reaganomics passed and signed back in 1981, another time of economic crisis? Eight months.

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Obama's announcement this morning and his proposed amount to individuals is not enough to stimulate the economy. $500/individual and $1000/family is enough to pay a mortgage and perhaps a few groceries, it is not enough to stimulate wide-spread spending. The government has already bailed out the banking/mortgage industry, and they'll be the end-recipients of the proposed amounts from consumers.
Why not give every individual $10,000. We'd all run out and spend. (Many would buy cars which would have been a better bailout for the auto industry!) OR why not return any income taxes paid in 2008? We already work until May to pay our tax debts--refund that money! I promise to spend it!

KathyD of MO 10:56AM January 05, 2009

When has more debt ever produced income? Even gamblers at casinos know when to quit, but not our politicians, they think they have an unlimited supply of money. How can people think that government jobs for infrastructure is going to stimulate the economy? Have they forgotten where the money comes from? What, tax people to spend money on government projects when the people are out of work, how long will that last?
These policies like FDR's will extend the depression for years to come, until the idiots realize that more debt doesn't produce income, it produces slavery! When taxes are so high to pay off the debt, Americans will be enslaved by their government. Here's a good twist the enslavement of the American people by a Black President!

SimonSez of CA 12:47PM December 27, 2008

For one, I'm not here to rubber stamp all the comments made thus far. Some of you are as looney as the lefties. There is no such thing as a collective, nobody thinks in a group. They may be influenced by someone charismatic enough to encourage enough people to abdicate their own volition in favor of that opinion, or people may genuinely agree with someone, but there is no collective. Therefore there is no Collective Good, nor is there a Will of the People.
Keynes may pull out of deflation, which is arguably catastrophic in nature, but it will not save us from Hyper Inflation. I will point out as you all rail against Obama that George W. Bush and company are they what started printing money and taking over corporations, NOT Obama.
I'm certainly not a fan of Obama, nor am I looking forward to what's coming. Pushing of a leftist agenda on the heels of a crisis will throw the baby out with the bathwater.
There ware a few warning signs, in my opinion, that we're in for a shocker. Obama can actually INCREASE his political capital right up front with the conservatives and a number of his not-so-smart or not-so-caring would-be doubters of his methods. He can let the autos file for bankruptcy because they don't meet the loan terms in March. After that, nobody will say anything, while he proceeds to greenify and print money to fund other technology efforts that don't yet exist in stages that can make use of them.
We'll see the economy 'turn around,' a market rally, and soon, you'll see a marked effort by the government to sop up excess liquidity. Which is something nobody has ever known how to do, in history. It's never been done, on such a large scale, in time to prevent the collapse of a currency, and it would be a miracle if it could be done this time.
See, Keynes says how to get out of deflation, he doesn't say how to make sure that inflation doesn't kill you. If you go to such a scale as we're attempting to now, we may very well be in for the death of our currency if we have no way to turn it around. It's a math equation, you put more currency in to replace the money being destroyed, and you stop the hemorage in velocity of money... however you do not replace the value lost by the destruction of that wealth, so you automatically have inflation, even if you've managed to balance the equation mathematically. The money is worth less since the thing of value that originally was lost to prompt the reprinting is gone, it's worth less per unit than it was previously. Keeping the level of money constant while decreasing the amount of wealth, is inflation. You don't have to exceed the previous value, as is so often supposed, to cause problems.
I don't know of any way to fix this from here, because people's minds are so poisoned with misinformation. Maybe now the only way is to let it all bleed. And Bleed it shall, unless the democrats have a change of heart.

dave of PA 12:25AM December 27, 2008