Wednesday, March 11, 2009

When is the economic recovery due?

According to this report from Peter Ferrara, we can expect the economic recovery to be delayed.



Even granting some leeway, we should expect recovery, defined as the return of economic growth, by mid-spring, when otherwise we will be breaking records every day for the longest recession in the modern era. If economic growth does not resume by then, we can legitimately ask whether Obama's policies are delaying the recovery rather than helping to restore it.



When the economy falls into recession, it does not keep falling until the government comes up with the brilliant policy to turn it around. Though with foolish policies the government can keep the downturn going for a long time -- see, e.g., The Great Depression.



We still have the biggest, most powerful, capitalist economy in world history. Every morning, hundreds of millions of hard working, skilled Americans wake up and go to work trying to make the economy more productive than the day before. That is what makes the economy eventually recover on its own, always within 16 months since World War II. Government can make this recovery faster and stronger with smart policies that contribute to economic growth. Or the government can delay the recovery and make it weaker with dumb policies that hold the economy back.



I expect Obama's policies to delay recovery and make it weaker than it would be otherwise. The stimulus package just added a trillion dollars to government spending and the national debt. It did nothing to enhance incentives for saving, investment, starting or expanding businesses, job creation, entrepreneurship, or work. Economic growth does not result from massive increases in welfare, $2 trillion dollar deficits, and soaring government spending and debt, which is all that Obama's stimulus foolishness does.



Then the week after the stimulus passed, Obama turned to supporting another $400 billion in increased spending, for this year alone, in the so-called omnibus spending bill. The next week, Obama proposed an additional $275 billion housing bailout. Obama's budget reserved another $250 billion for still more bank bailouts, on top of the remaining $350 billion from the TARP bailout that Obama has also committed to spending. The budget also reserved still another $638 billion "down payment" on a new national health care entitlement that will be the biggest entitlement of all, even though we can't afford all the entitlements we already have.



If this is how to make the economy grow, then we can all just quit working and watch Obama increase spending to infinity and beyond, as Buzz Lightyear likes to say, and just borrow the money for it from foreign countries on world capital markets.

2 comments:

fuzzys dad March 11, 2009 at 1:50 PM  

The sad part is there will not be a recovery.

Conservative Scalawag March 11, 2009 at 7:13 PM  

This is FDR and Carter,but half as bright or cunning.

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