Tag Archive | "economy"

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Delivering the Goods

Posted on 10 April 2011 by Editor

Originally posted 2009-09-15 21:12:40. Republished by Blog Post Promoter

Marriner S. Eccles Federal Reserve Board Building
Image by cliff1066 via Flickr

by Margaret Goodwin
Government is Not Your Daddy
September 14, 2009

The United States rose up from a handful of rebellious colonies to become the richest and most powerful nation in the world. Why? Because we led the world in production. For 200 years, America delivered the goods.

But, in the 1970’s, all that suddenly changed. For the first time in history, the U.S. started having trade deficits. That means our net consumption exceeded our net production. And, every single year since 1975, our nation has consistently consumed more than it produced. It doesn’t take a rocket scientist to know that’s not sustainable.

The depressing truth is America is no longer a world leader in production. We are trailing the pack. We are now a debtor nation, and our biggest creditor is China. — What the hell happened? And how will we ever recover? And, the more disturbing question is, what will happen to America if we don’t?

If we ever want to restore America to its proper place in the world, the first thing we need to understand is why we no longer have a productive economy. It’s pretty simple, really. — Because we no longer produce. Why not? – If we take a good hard look at the nature of production, maybe we can figure that out. The three key elements of production are capital, labor, and raw materials.

First, you need capital for research and development. To develop a new product that meets a real need in the marketplace takes a lot of research. It may take many years to develop. Research and development is extremely expensive, and there’s no guarantee of success. There has to be an enormous potential return on investment to justify that kind of risk.

That kind of return on investment is what our current administration refers to as “excessive profits.” And they have this notion that “excessive profits” should be punitively taxed. When government puts a lid on the potential for return on investment, what happens? The investors take their capital and invest it someplace else, — someplace that welcomes production, and wants to build up their economy and provide employment for their population. (Unlike the United States, it would seem.)

The second thing you need for production is raw materials. No matter what you want to produce, you need some combination of raw materials to produce it, whether wood, paper, metal, glass, fiber, or petroleum products. All raw materials come from the earth; they don’t come out of the air, or some genius’ imagination, or the printing presses at the Federal Reserve. They all come out of the ground, either through timber, mining, or agriculture.

Here, in Southern Oregon, we live in one of the richest areas in the country, in terms of natural resources. We’re rich in timber. We’re rich in minerals. But, if this part of the country is so rich, why is it so poor? Why is unemployment so high? Because we’re not allowed to use the natural resources with which we’re abundantly blessed. Overregulation, and the endless environmental litigation it has spawned, has all but curtailed the timber and mining industries, — the very industries that provide raw materials for every sort of production on which our economy relies. And the overregulation doesn’t stop there. It’s hobbling the manufacturing industries, too.

The third thing required for production is labor. We’ve actually got a surplus of that. Look at our unemployment numbers, nationwide. Private sector jobs are steadily declining because our industries are stymied by excessive regulation and punitive taxation. So how does our government address that issue? It tries to replace the jobs lost due to declining production by creating new jobs in the public sector.

The trouble is those jobs do nothing to restore our national productivity. Public sector jobs and service jobs don’t create any new wealth. They just swirl money around in the economy. And, as that money swirls around, more and more of it leaks out to other countries, as we buy foreign-made products because we can’t or don’t produce enough at home.

As the real wealth leaks out of our economy, the Fed prints up more and more new money, which only dilutes the value of the money we already have in circulation, leading to higher and higher inflation. As long as we consume more than we produce, there is no way to add real value back into our economy, and our currency will continue to lose whatever value it has. We must restore production to have a sustainable economy.

This country was founded on the sacred principles of liberty and freedom. Not just individual freedom, but economic freedom. America became a world leader because America delivered the goods. That’s what it’s all about. That’s what it’s always been about. We have to stay solvent to preserve our liberty. If our economy fails, we’ll lose our freedom. Stifling production smothers the economy. And that’s what our government is doing.

Contact your Congressmen and Senators and tell them we want our economy back. Government can’t solve the problem. Government is the problem. Give us back our economy, and get government out of the way!

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Margaret Goodwin writes for the Government is Not Your Daddy blog.

Article published with the author’s permission.

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Under The Radar: 10th Amendment Movement Picks Up Steam

Posted on 10 April 2011 by Editor

Originally posted 2009-07-20 21:25:08. Republished by Blog Post Promoter

by Nancy Morgan
RightBias.com
July 19, 2009

Millions of Americans watch with horror as the Obama administration continues to implement its own version of ‘change.’ Change that involves an unprecedented and systematic devolution of power to the federal government, in direct contravention of the Constitution.

From the pending takeover of 17% of economy under the auspices of health care reform, to the government takeover and subsequent ownership of automobile companies, to the unconstitutional interference in the formerly private market under the rubric of stimulating the economy. Not to mention the proposed cap and trade legislation which would give the federal government unlimited powers of taxation and regulation under the guise of saving the planet.

Totally ignored by elected officials of both parties is the tenth amendment of the Constitution, which states very clearly, “The power not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the States respectively, or to the people.”

Many Americans don’t agree with the left’s idea of a ‘living constitution’, arguing that the intent of the founders should govern the interpretation and application of the Constitution, not the whimsical and politically motivated present day politicians. And, largely unreported by the media, they are starting to stand up to the federal government.

To date, 37 states have introduced sovereignty resolutions, asserting their state’s sovereign rights under the tenth amendment.

Earlier this month, Louisiana became the seventh state, joining Alaska, North Dakota, South Dakota, Oklahoma, Idaho and Tennessee to officially adopt a resolution affirming their sovereignty. These states are putting the federal government on notice that politicians in Washington do not have the right, under the Constitution, to continue to impose their increasingly onerous federal mandates on sovereign states.

Some states, with Arizona leading the way, are going a step further.

Under Arizona’s Health Care Freedom Act, which was passed by the Arizona state legislature this month, a voting initiative will be placed on the 2010 ballot that, if passed, will allow Arizona to opt out of any federal health care plan.

Following Arizona’s lead, five other states — Indiana, Minnesota, New Mexico, North Dakota and Wyoming — are considering similar initiatives to opt out of federal health care for their 2010 ballots This, even before Congress has created the program.

Arizona is also preparing for the misnamed ‘climate’ bill, that passed the House this month. (With eight Republican votes.) The Arizona state Senate voted 19-10 to approve a bill banning the Department of Environmental Quality from enacting or enforcing measures with language pertaining to climate change.

Other states are stepping up to the plate and asserting their state’s sovereign right under the second amendment – a right that guarantees the right of the people to keep and bear arms.

On July 6, Florida introduced the Firearms Freedom Act which seeks to provide “that specified firearms, firearm accessories, and ammunition for personal use manufactured in state are not subject to federal law or regulation” in the State of Florida.

Increasingly, the representatives ‘we the people’ have elected to preserve and protect our rights, are ignoring the clear, unequivocal language of the Constitution. Our politicians seem unaware of the fact that the Constitution does not include congressional power to override state laws.

In fact, the power our representatives are now accruing to the federal government was expressly voted down, not once, but several times.

During the Constitutional ratification process, James Madison drafted the ‘Virginia Plan’ which advocated a strong federal government. It proposed, among other things, giving Congress legislative authority, and a veto over state laws. Each of Madison’s proposals was soundly defeated. Our founders clear intent was vesting all powers in the states, with but a few, listed exceptions.

Ever since 1938, when FDR used the occasion of the great depression to drastically expand the scope of federal government (Wickard vs Filburn) using an absurd reading of the Commerce Clause, this unconstitutional taking of power by the central government has gone virtually unchallenged. Until now.

Though the media has ignored these efforts, ‘we the people’ are starting to fight back, via our state and local representatives.

Politicians need to be reminded that our Constitution is still in effect. And Americans need to be reminded that just because some believe the trendy notion that our Constitution is a ‘living, breathing’ document, doesn’t make it so.

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Nancy Morgan is a columnist and news editor for RightBias.com
She lives in South Carolina

Article has been published with permission


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The Amish: Their Past and Present May Hold Our Future

Posted on 10 April 2011 by Editor

Originally posted 2010-01-26 23:16:57. Republished by Blog Post Promoter

American Soldierby Wenchypoo
Wenchwisdom.blogspot.com

If you ever wanted to see where we’re likely headed with the economy, oil use, work life, and self-sustainability, you should look to the Amish and their culture. Their past represents our possible future, and provides some wonderful clues about how to deal with it.

Some surprising and interesting facts about the Amish people:

  • A fine distinction has been made between ownership and use. They can ride in or hire combustion-powered vehicles (with non-Amish drivers) to travel in, as long as they don’t own or operate them without special permission of the church. Certain work crews (construction-related) have special permission to lease work vehicles, operate heavy equipment and electrically powered tools as necessary for their job, as long as they don’t tap into the power lines from outside, or the 110-volt power from outlets.
  • Most families have scaled back or abandoned farming completely, due to skyrocketing prices of land, equipment, and supplies. Population strains within communities have placed a high demand for farmland, right along with developers from the encroaching “outside” world. Being penned-in by land availability and affordability, church, and family constraints, most have turned to business for their livelihood. Amish micro-enterprises abound in large cultural homelands such as Lancaster, PA and others.
  • Education beyond 8th grade home schooling is forbidden. Training for a specific job or job component is allowed, as long as it isn’t formal (for a degree program), and is available by other means (OJT, apprenticeship, workshops/seminars, etc.), because it’s feared that a formal education would encourage leaving the farm and community. Any occupation requiring the use of force (military, police, etc.) is forbidden. Membership in unions and engaging in litigation is also forbidden; it is seen as a horrific waste of money and resources.
  • Amish workers and employers are exempt from Social Security and Medicare tax. Their culture does not allow for paying into or drawing from the system, because extended family and the church serve as their means of social support in times of need or disability/old age. They are also exempt from military service because they believe in non-resistance.
  • Most Amish micro-enterprises are home-based, providing for a family/culture/church woven network in their daily lives. Men and women are encouraged into business equally, but family and church must take priority over economic needs (time off for weddings/funerals/Amish holidays/barn-raisings, etc.). Business is considered a “sideline” to their traditional farming work, despite many families leaving farming as their mainstay.
  • If some component of business requires the use of electronics or combustion, they can contract it out to other firms—even non-Amish ones. They are also allowed to use “non-native” materials (not found on the farm) such as plastics, fiberglass, etc. with church permission. By outsourcing such things, the boss can work right alongside the employees–ensuring immediate access to production, staff, and customers throughout the day. If an electrically-powered item is absolutely essential to their business, an electrical source is created through the in-line use of a diesel engine, hydraulic and air generators, and an inverter—this cumbersome arrangement is called “Amish electricity” because it produces the power they need, albeit inefficiently, without tapping into the forbidden power lines or outlets of the outside world.
  • With the declining availability and outright extinction of some elements of their lives, such as buggy parts, horse plow equipment, etc., these people have made an ingenious bargain with the modern world: they can take modern equipment and “modify” it for their use, with church permission.
  • Since most work takes place during the light hours, industrious use of solar energy abounds in the form of skylights. A few Amish families have been given church permission to explore the modification, refinement, and creation of solar panels to use and sell. For the most part, sweat equity, propane, kerosene, natural gas, and firewood remain their energy sources.
  • Participation in local and regional business associations (Chamber of Commerce, Rotary, etc.) is looked down on, but not forbidden, if used solely as a networking vehicle. Political participation is also looked down on, except when the goal is to become familiar with and voice concerns about regulations and ordinances. Voting at national elections is permitted and voluntary. Lobbying is forbidden. Local craft guilds are the preferred way of communing, networking, and learning.

Clever ingenuity has been the by-product of a population kept small and relatively quiet by church laws and cultural taboos…ingenuity we can all benefit from. Swaying church permissions, meant to keep people and businesses “small”, have helped rather than hindered their usher into the modern world, all in the name of encouraging enterprise.

It would seem to the average reader that the Amish have it together in the modern world, even though their lifestyle harkens back to the Elizabethan Era in Europe (1600’s). We would do a lot for ourselves by taking heed of what these fine people have to offer in the way of possible solutions to our impending problems–if only we’d look back in time for innovation inspiration. What DID people do before the advent of 110-volt power, refined oil, the various social service systems, and disposable “stuff”?

Perhaps the Amish hold many answers to some of our future pressing problems, like questionable oil supplies, environmental poisoning, Social Security and Medicare deficits, skyrocketing education costs, corporate greed, and self-sufficiency in general. Perhaps we outsiders need to look to the past for our future needs…or maybe the past is slowly, cleverly building itself to accommodate bits of the future on limited terms. So much of their “restrictions” make a lot of sense, and for logical reasons (church aside).

It’s interesting how some things in their world mesh with things in our world. Problems that we have incurred in the outside world have also been incurred and “cured” inside, such as:

  • Corporate greed—when the Amish sense that they have too much (money, work, overhead), they either divide the business and sell divisions, turn divisions over to relatives, or sell off the entire business. The church lets them know when they’ve grown too big for their britches, but the church smiles upon success with humility. Unbridled growth is unsustainable, and only leads to waning demand and “Been-There-Done-That” Syndrome.
  • Clutter and excess—drawing a fine line between ownership and use, they tend to keep down the number of things they own and may not use every day, keeping farm clutter to a minimum (as well as liability). Merely getting to use something to get a job done, rather than keeping around “just in case they need it again” saves space, money, and headaches.
  • Over-education—in today’s world, more and more people spend more and more money to garner degrees for jobs that can be performed well without those pieces of paper…and then those jobs disappear, leading to yet more and different degrees. A basic education and hands-on training are sufficient for most jobs in this country, but it won’t make the kind of money we demand from the start for those jobs. A particular thorn in this area is the advent of women returning to the workplace…many women pursue expensive degrees, only to leave the workforce a few years later to raise children. At some point, we have to ask ourselves: is the return on education investment worth it in the end, or are we spending more for that degree than we wind up making in the workforce?
  • Over-work—the Amish have made this part of their lives, yet we haven’t really begun to benefit in large numbers from the flexible hours and access to family that a home-based business brings. We prefer to indenture ourselves to corporations on their terms, and merely hope for the best when it comes to leaving our kids in the daycare and public school systems. Work has become the center of our lives, rather than the home and family.
  • Insufficient government funds—we are currently facing a crisis of monumental proportion when it comes to the Boomer generation, retirement, and health care in regard to unfunded retirement and Medicare needs. Our current system is a pay-as-you-go one, meaning current workers pay taxes for current retirees and Medicare recipients to collect checks and benefits from. When the number of workers dwindles and the numbers of retirees and medically needy balloons, the payroll taxes will increase to accommodate their social service needs…and your paycheck decreases as a result. By relying less on others and more on our own resources, we can ease this burden somewhat, even though the money paid into the system already will be lost forever.
  • Declining natural resources—there is talk that the current global oil supply will last for another 30 years or so, that oil drillers are already having a hard time finding and getting oil out of the ground, and OPEC certainly cannot keep up with current and future demands. If this is the case, we need to find large-scale inexpensive viable alternatives now, and something other than the expensive substitutes we currently have available as options.

By modifying existing equipment, the Amish have made clever use of hydraulics and pneumatics to avoid using the one power source forbidden by the church. By employing the use of modified equipment, and working with the sun, we would save tons of generated energy from outside and personal energy from within.

  • Over-globalization–Rather than making contentious trade deals and questionable ad campaigns in pursuit of the almighty dollar, and succumbing to a 24-7 world in all its different time zones, perhaps we should be thinking about going back to work with nature and providing for ourselves what we really need right here at home. Over-technology, over-ownership, and unsustainability contribute to this need for global profit reach, and we need to ask ourselves what we’ll do with it all when the power goes out.

We need to get creative again, make ample use of what we already have, and satisfy demand here at home, rather than covering the globe with things nobody wants or needs (complete with culture-targeted slick marketing). Working efficiently within daylight hours and personal constraints leaves plenty of time to attend to other priorities, like family, home, and church, and working close to home insures easy access to family—the top priority.

  • Over-regulation—by recognizing that government only serves as an interfering body when it comes to daily work, spiritual and home life, the Amish seceded from the outside world into one where their church and service to God is the regulator…no vote, no committee. Since coming to America to escape religious persecution by both Catholics and Protestants, a compact has been struck with Uncle Sam: no interference, except where elements of the outside world come onto the farm or into the business (zoning, health inspections for food-related businesses, sales taxes, business sign sizing, and payroll taxes for non-Amish employees). The church takes care of the rest.

Persecuted in Europe…settled and thriving in America…the Amish have been with us since before the Declaration of Independence was signed. They will likely still be here when the rest of us burn out and move on. Who knows? They may be our only guiding force in the end for flipping the dependency switch on technology once and for all.

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Wenchypoo writes for the Wenchwisdom blog

Article has been published with permission

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The ‘Another Fine Mess’ That is California

Posted on 10 April 2011 by Editor

Originally posted 2009-06-21 23:59:11. Republished by Blog Post Promoter

As Featured On EzineArticlesIn the immortal words of Laurel and Hardy: “Here’s another fine mess you’ve got me into.”

And there’s probably no better way to describe the situation that California, this once prosperous state, which from the days of the gold rush has attracted millions to its Pacific shores has found itself in. Its golden image, once a magnet for the ambitious, talented or simply enchanted by the beauty of its land and people, is now tarnished by years of fiscal mismanagement and irresponsible government spending.

It is wondrous indeed to note how a state with such riches in natural resources and richness in the diversity of its people can find itself in such financial ruin. The state of California (which if it were a country would be the 8th largest economy in world) has found itself unable to fund its current fiscal deficit exceeding $24 billion and service its debt of over $72 billion to its bond holders. By any standard definition of insolubility, the state of California is bankrupt. And while teetering on the brink of being in default of its obligations, interestingly the state’s constitution explicitly does not allow it to declare bankruptcy – a curious dilemma.

The reasons which have brought California to this sad financial state are well known and documented. Summarized, it could be captured in the simple premise of having made too many promises without the wherewithal to deliver on them. These include promises made to government employees, such as in cases of retirees ending up with multiple pensions, some in the six figures. They include overly generous social programs, extending across citizens and non-citizens alike; lax enforcement of state entitlements; increasingly hostile tax burden on businesses including a state sales tax approaching double digits. Also most would target the ineffective state constitution which mandates a 60% majority in the state senate to enact major financial reform. By all practical terms such majority has been virtually impossible to achieve, resulting in stalemate on any attempts to curb the state’s insatiable spending appetite.

Whereas the causes of the states virtual collapse can (and will be) studied by many social economist and political analysts, the practical matter of how to address the dilemma and provide a sustainable solution to the California crisis remains. Prior attempts by its governor Schwartzenegger to seek a federal bailout have fallen on deaf ears of President Obama, and rightfully so as the precedent set by such action would be dangerous and ridden with consequences beyond our ability to predict. Furthermore, no constitutional authority has either originally or through any amendments been granted to the federal government to provide for such a bailout.

So what options exist for California? The ones most commonly discussed include:

1. Providing government credit guarantees of California’s debt have been floated (CBS News Story) but generally discounted as too temporary and not addressing the core of the state’s fiscal crisis. Furthermore, guarantees of such an amount could negatively impact on the credit rating of the US government, which itself is struggling with mounting debt and looming inflation. As traditional with the democratic liberal wing, its chief democratic rep. Barney Frank of Massachusetts, chairman of the House Committee on Financial Services is in support of such measures.

2. Allowing the state to default on its obligations has also been floated, but appears to have the support of only the most extreme faction of constitutionalists. Opponents argue that this would undoubtedly create a dangerous ripple effect throughout the US economy, the cost of which would potentially exceed any bailout which would be offered to the state.

3. Aggressive tax increases (primarily in the form of sales taxes) to compensate for the precipitous fall in tax revenues have the support of many of the liberal democrats in the state senate. However, under the terms of the state’s Proposition 13, their enactment has become a virtual impossibility due to the 60% majority provision. Furthermore, California residents have over the last years become increasingly more vocal against that state’s excessive tax rates, further diminishing the possibility of any such actions.

What is discouraging is that no significant momentum exists behind a movement to address what is the root cause of the state’s troubles – state government inaction and excessive tax burdens. In order, first the state needs to procedurally address the ineffective provisions of its state constitution, including Proposition 13. Armed with new powers to reduce the tax burden on its citizens and enterprises, a well targeted reduction in state business taxes, and either personal income taxes or sales taxes would restore vibrancy to the California economy and begin to again attract new investments and spur an influx of productive sectors of the population back to the state.

While in 2005 the US Census was projecting California as one of the states with highest growth rates, in the recent years of financial turmoil the opposite has begun to occur, with residence relocating to less tax onerous states, among them Florida, Nevada or Texas, each with no state income tax.

Tax incentives (instead of tax penalties) have time and again shown that the empowered individual and the entrepreneurial nature which he harnesses are the most effective tools to bring about economic growth and financial health. California would do well by heeding to one of its greatest son’s prolific advice:

“I don’t believe in a government that protects us from ourselves.”
“The best minds are not in government. If any were, business would hire them away.”

 Ronald Reagan (1911 – 2004)

 

It would be wise for the California governor and state senators to read their state motto (“Eureka”) and in it recognize that the solution to their state’s woes has already been found, tried and proven. All they need to do is act on it.

* * * * *

We welcome your comments and suggestions, either directly inline, or via email to editor@nakedliberty.com. If you would like to have your article published in Naked Liberty, please contact the editor at the above email address.

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If At First You Don’t Succeed, Fail, Fail Again!

Posted on 10 April 2011 by Editor

Originally posted 2009-07-26 19:18:49. Republished by Blog Post Promoter

Scott-Spiegelby Scott Spiegel
ScottSpiegel.com

Five months after the stimulus bill was passed, we can now say that we’ve witnessed the following under-stimulating results.

Payrolls are falling more than forecast, with employers having cut 467,000 jobs in June, following a 322,000-job decline in May. Factory jobs fell by 136,000 after dropping 156,000 in May.

Unemployment is at 9.5%, the highest level in 15 years, and is projected to exceed 10% by the end of 2009.  Some economists expect it to remain at historically high levels for years.

The average workweek is at 33 hours, the lowest in 45 years.

Average weekly earnings are down to $611.

The national debt is $11.5 trillion.  The Congressional Budget Office projects the deficit for 2009 to be almost $2 trillion and for 2010 to be more than $1.4 trillion.

The Treasury is increasing its sale of debt to pay for spending.  Treasury offered $1 trillion in notes and bonds in the first half of 2009 and plans to offer another $1 trillion by the end of 2009.

Colin Powell, of all people, is alarmed that Obama’s spending orgy may be swelling government and the national debt: “I’m concerned at the number of programs that are being presented, the bills associated with these programs and the additional government that will be needed to execute them…  [We have] a huge, huge national debt that, if we don’t pay for [it] in our lifetime, our kids and grandkids and great-grandchildren will have to pay for…”  Now he tells us!

Jared Bernstein, chief economic advisor to Joe Biden, whose office is managing the stimulus, says, “It’s working, it’s demonstrably working.”  According to Bernstein, $200 billion in stimulus money has already been obligated or spent.  Case closed!

Note to Bernstein: In order to demonstrate causality, you have to show that: (1) there was a cause, (2) there was an effect, and (3) the cause influenced the effect.  Defenders of the stimulus bill are still stuck on #1: as of June, only 10% of all stimulus funds had been distributed.  Bernstein’s $200 billion “obligated or spent” figure—eerily reminiscent of the administration’s “jobs saved or created” trope—is untrustworthy, because the administration has already been caught lying about money committed to spending projects.

Given the miserable failure of the stimulus bill, naturally Congressional Democrats want… another stimulus bill!  According to House Majority Leader Steny Hoyer, “We need to be open to… further action.”  Democratic Senator Sheldon Whitehouse said that another stimulus would “probably take place towards the end of the year.”  Second-ranking Senate Democrat Dick Durbin said he would leave any decisions on passing another stimulus bill to “the president’s evaluation”—and we all know how cautious Barack “Fiscal Restraint” Obama will be.  Stan Collender, former Congressional budget analyst, said that another stimulus bill may be possible if the economy gets worse: “Right now it doesn’t seem to be justified…  Come September, it might be.”

The first stimulus package was “a bit too small,” according to Laura Tyson, member of Obama’s Economic Recovery Advisory Board.  Paul Krugman writes in the New York Times, “O.K., Thursday’s jobs report settles it.  We’re going to need a bigger stimulus.”  Biden advisor Bernstein says, “There is no conceivable stimulus package on the face of this earth that would fully offset the deepest recession since the Great Depression.”

Let’s see: the stimulus bill committed a record $787 billion in spending.  Tyson says it should have been “a bit” bigger.  Congressional Democrats and Krugman wanted it much bigger.  Bernstein admits it would have to be infinitely big to work.  Can we give Bernstein the award for inadvertent honesty on this one?

The clincher that the stimulus bill was an abject failure—and that another stimulus bill would be a repeat failure—is the fact that Wall Street has just hit a 10-week low after talk of a second stimulus package recently began.  Amateur analysts suggest that chatter about another stimulus bill is making investors nervous, because—get this—it shows that the economy might not be recovering.  According to Hugh Johnson of Johnson Illington Advisors, “When there’s talk about another stimulus plan, that adds fuel to that fire, it intensifies the concerns about the timing and strength of the recovery.”

Is it possible, just possible, that investors are nervous, not because Congress’ hinting at a second stimulus package implies the economy is not recovering—which I think they can figure out on their own—but because Congress is hinting at a second stimulus package?

If Democrats aren’t persuaded by Republicans’ argument, backed up by ample historical data, that spending vast quantities of wealth not yet created does not stimulate the economy in the long term, could they at least admit their little experiment failed and try the Republican option for a change?

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Scott Spiegel is the editor of ScottSpiegel.com

Article has been published with permission


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