One year ago, President Obama was trying to scare us. He told us that if we didn't sign off on his massive $787 billion dollar stimulus package, we could be stuck in the greatest depression the nation has ever seen. The economic world would come to an end and the fire of hell would rain down on the American consumer. We listened to our new president and allowed the culture of fear to paralyze our collective psyche. While economic caution was an appropriate tool for the president to use, that caution should have been accompanied by a commitment to prudent courage. Instead, it turned into all-out fear and halts on investment, lending and consumer spending, creating even greater problems than he'd had before.
By passing the stimulus in high democratic fashion, the Obama administration was able to spend money the Obama way. He was allowed to ride the popularity of an historic election all the way to a trillion dollar after-party, leaving our country with a shocking deficit that shows no signs of declining anytime in the near future. But Obama had good training from the Republicans, who decided to start spending half a trillion dollars per year on meaningless wars. Massive military spending and unrestrained entitlements are going to lead to the end of U.S.economic dominance and prosperity.
Obama's economic policy team, which leaves much to be desired, was right about how to respond to the downturn. Spending and borrowing was the way to hit the crisis head on, with enough momentum to help our nation avoid a financial tsunami unlike anything we'd seen in 80 years. Most interesting was that the downturn was driven in large part by corporate and political irresponsibility during the 2001 - 2007 time period. During this era of deregulation and tax cuts, corporate profits rose dramatically, while worker wages remained stagnant. In fact, the United States has not created one net new job in our economy since 1999.
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