Saturday, June 6, 2009

Obama's "stimulus" is failing according to his own projections

As this article points out, the economy is doing worse than it would have done without any "stimulus" spending, according to the Obama administration's own projections. Of course, the whole premise of "stimulus" spending has been discredited by 70 years of failure by governments around the world.

The last major trial of "stimulus" in the United States during the 1970's led to stagflation, that wonderful combination of high unemployment, low economic growth, and high inflation. Remember the "misery index"?

The fact is that there is no logical basis for the theory of stimulus through deficit spending. More importantly, it has never worked in practice. However, since one of the key criteria for major media personalities is a complete lack of economic knowledge, the term "stimulus" is repeated as if it actually means something.

Not only does "stimulus" not stimulate, it actually makes things much worse, and we are now starting to see the economic trend lines diverge in a negative direction from Obama's own projections of what would have happened had he not spent any of the trillion plus taxpayer dollars on so called "stimulus".

The old saying is that those who do not learn from history are doomed to repeat it. There are lots of historical illiterates out there, and it appears they have doomed the rest of us to repeat some very painful economic lessons.

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