So much is happening in the political-economic realm that I am unable to catch my breath between assaults on our freedom and our prospects for economic recovery currently being perpetrated by our federal government. Stephen Bourque over at One Reality captures my sentiments perfectly in in post Shock and Awe: Obama's First Forty Days.
The lack of common sense, let alone proper understanding of the laws of economics is astonishing.
A few examples:
1. In a crisis, with a proximate cause of too much lending and borrowing, the solution offered is yet more debt (and LOTS of it), along with propping up those who miscalculated and mismanaged their finances-- guaranteeing their mistakes will be maintained.
2. In an environment of uncertainty, and where savings are minimal or non-existent, we are told rebuilding our reserves of cash and capital is destructive.
3. We are asked to believe that the sum of prudent individual action (paying off debts, spending less, saving more) is aggregate disaster.
4. At a time when 92.4% of the labor force are employed, and 90% of mortgages are NOT in default, we are told today's crisis is unprecedented and requires massive, immediate, emergency action by the government.
(Update: BLS Feb.'09 report shows employment rate now closer to 90%)
5. The Bailouts aren't working. Money is being poured into leaky, sinking ships (Big 3 auto companies, AIG, Freddie and Fannie are prime examples) without addressing the cause of their failures, and so they will coming back for more.
(Update 3-9-09: GM may go bankrupt anyway, taking taxpayer dollars with it.)
6. There has never in history been a fiscal stimulus that actually stimulated the economy. Strong theoretical explanations exist on why a stimulus never will work. And yet, we are going to gamble Trillions of dollars on it working this time. (If you have evidence to the contrary, I'm interested in seeing it.)
7. In the middle of a recession, with unemployment rising and the stock market falling, our president wants to hobble our businesses further with higher taxes and a cap-and-trade on CO2 emissions to address a "problem" whose existence is questionable (see resources in the side bar.).
8. In his speech last week to Congress, President Obama listed three areas which he thinks are in serious trouble and in need of government assistance: health care, education and energy. But 80% of K-12 is already run by government, over 60% of health care is paid for with state funding, and except for the banking industry, few segments of our economy are more regulated than that of energy. Could the fact that these areas already have heavy government intervention have anything to to with the fact they are ineffective, expensive and in short supply?
Wake up America. Your liberty and your prosperity are under attack.