Obama Makes an Unnecessary Gamble
February 6, 2009 · Posted in General Economics
The $800 billion spending bill that is currently being discussed will not fix the US economy. Just as too much government intervention caused (not fixed) the Great Depression in 1929 and the following years, just as the Bush administration’s spending spree which turned surpluses into deficits, just as the rise of government expenses over the past 100 years, more government spending will not solve a darn thing. Quite the opposite. It will dig us a deeper hole. There is no way around this truth. There is no point ignoring or denying The Trouble with Bureaucracy.
There is no “Change” in having the government spend more money. If government spending was good for the economy, the United States should by now have the best economy in the universe. Spending more money is in fact precisely the opposite of change. It is more of the same.
Comments on some of President Obama’s flawed statements from today:
“We’re not going to get relief by turning back to the very same policies that, for the last eight years, doubled the national debt and threw our economy into a tailspin,” he said. “We can’t embrace the losing formula that says only tax cuts will work for every problem we face…”
The idea to drastically cut government expenses and use the cost savings to cut taxes is not more of the same. Why would it be? Who ever suggested that the Bush administration cut spending and subsequently cut taxes significantly? It simply didn’t happen. If, of course, you cut taxes by a little bit and borrow and spend ever more nothing will change. This is what happened. The tax cuts were completely insignificant, the spending kept on growing. In fact, the only period in the post war history of the US where taxes where higher than now was from 1997 through 2002. That aside, taxes are at an all time high right now. So please , everyone, stop spreading the nonsense that what has happened in the past 8 years is a proof that a policy of limited government, little government spending and low taxes has failed.
The idea to return to a sound monetary system is not more of the same. It is the opposite. What has led to this crisis is credit expansion and the inevitably ensuing business cycle, caused by excessive money printing by the Federal Reserve Bank, an institution detached from reality and from any checks and balances. There is no change in more deficits and government debt, monetized by an unchecked Federal Reserve. It is more of the same.
The idea to cut taxes on small incomes, payroll taxes, capital gains, dividends, and interest has nothing to do with “trickle down” economics. Who pays the payroll tax? It’s the little guy, the worker, who receives a monthly paycheck which has a large chunk deducted for income and payroll taxes immediately. It’s him who saves part of what is left in stocks and bonds to receive interest and dividend income for his retirement. How is this “trickle down” economics? In fact, I can’t see a better example for “trickle up” economics than this one.
To critics who argue that the government shouldn’t be spending billions with a large and growing deficit, Obama said, “I found this national debt doubled, wrapped in a big bow waiting for me as I stepped into the Oval Office.”
The American people called for change in November, he said, “and that’s what we’re going to deliver.”
The Americal people voted for your program which promises fiscal soundness. They didn’t vote for another $1 trillion additional spending. In case anyone cares what they think on this specific issue, please consider Public Realizes – Stimulus Won’t Work.
Obama rejected calls for more tax cuts and significant slashing of the bill’s more than $800 billion price tag, and said complaints the package was a spending bill rather than a stimulus bill were off base.
“What do you think a stimulus bill is?” he said. “That’s the point.”
Well, Mr. Obama, you keep talking about the “failed policies that doubled our national debt”. What do you think it is that doubled the debt?? What do you think it is that the government has been doing for the past 8 years and beyond that? What do you think has led us to where we are right now? That’s the point.
“They did not vote for the false theories of the past, and they didn’t vote for phony arguments and petty politics, and they did not vote for the status quo.”
President Obama promised change. Cutting taxes and spending would be change. Keeping taxes as insanely high as they are, even considering to raise them, and spending more money is not change. It is the exact opposite of change. It is more of the same. More of the same failed policies that have led to the demise of the US economy.
Considering the facts that
a. the public opposes this bill and
b. it will not work and make things worse,
Obama is gambling with the future of his administration. If he doesn’t deliver true change, things will get worse and worse. If he shoves this bill down the throats of the American people, it will be him and Democrats in Congress who will have to share the blame. This bill was never his bill. It was the Congressional Democrats’ bill, led by Harry Reid and Nancy Pelosi. Now Obama has made it his bill. All the scandals, wasteful projects and corruption that will be uncovered under the projects funded by it will be associated with him. His partisan speech today might very well have marked an early end to bipartisanship for the rest of his tenure.
His fundamental misunderstanding on this matter is that he believes these disagreements are nothing but political games. They are not. They reflect sincere and deep-rooted concerns of the direction where this country has headed. They represent the voices of millions of frustrated workers, businessmen, housewives, students, and retirees calling their representatives, jammed fax machines, letters, town hall meetings, and the like. The movement for liberty is not one of political expediency. Its members are not in it for personal, monetary, or political gain. They are in it for true conviction and with all their heart. But on top of that, it is a movement of substance, reason, logic, and sound understanding of historical and economic facts. There is nothing in the world that could change some one’s mind, once one has understood the true blessings of Freedom, Liberty, Peace, Prosperity, and Happiness. It is a patient movement. It is not in a rush. It isn’t going away. It will grow stronger year by year. To ignore it would be the biggest mistake Obama could make now.
If he continues doing it, the political retaliation will ensue sooner or later in the next Congressional elections and maybe in the next presidential elections. This is an unnecessary, harmful, and avoidable political gamble.