Speaking about the failing economy, President-elect Obama coolly diagnosed, "We understand that we've got to provide a blood infusion to the patient right now to make sure that the patient is stabilized, and that means that we can't worry short-term about the deficit. We've got to make sure that the economic stimulus plan is large enough to get the economy moving." Since the “patient’s” infusion would come from the patient itself (through either taxes or debt), “Doctor” Obama’s treatment may be more like an old-fashioned bloodletting than a true cure.
Obama, like many in Washington (in both parties), is a devotee of Keynesian economics, the ideas of British economist John Maynard Keynes. His theories were first published in 1936 and were quickly adopted by America’s big government progressives, like President Franklin Delano Roosevelt. One of the key theories of Keynesian economics is that during economic downturns the government can “prime the pump” by increasing its spending. Since Keynes’ theories increase the size and power of government, it’s no wonder his ideas have always found so many acolytes in D.C.
Keynesian economics has many critics however. Notable detractors include economists Milton Friedman, Robert Lucas, Murray Rothbard, and Henry Hazlitt. Austrian economist Friedrich Hayek criticized the collectivist approach of Keynesian economics, which requires centralized planning, which Hayek argued leads to totalitarian abuses.
Besides its push for bigger, more authoritarian government, Keynesian economics just doesn’t seem to work. As the Cato Institute, a libertarian think tank, points out: “[T]he notion that bigger government leads to more growth is theoretically suspect: any money that the government ‘injects’ into the economy with new spending (or tax rebates) must first be borrowed and diverted from private use. The economic pie gets sliced differently, but it is not any bigger.”
Many argue that the Great Depression wouldn’t have been as long or severe if it wasn’t for the Keynesian “cures” employed by the Roosevelt Administration. Later examples of Keynesian policy in practice haven’t fared much better. “Huge increases in government spending under both Hoover and Roosevelt did not help the economy during the 1930s, and more recent Keynesian initiatives—Gerald Ford's rebates in the mid-1970s, Japan's stimulus efforts in the 1990s, and President Bush's rebates in 2001 and 2008—do not seem to have generated positive results,” states the Cato Institute.
Since our public debt currently stands at about $10.6 trillion, and the government is already racking up record deficits this year and no doubt next year, can we really afford to increase spending on anything, particularly for economic “cures” that don’t generally work? (To put that $10.6 trillion figure in some kind of perspective, remember that it took America the time period from George Washington to Ronald Reagan to accumulate ONE trillion in debt. We’re now on pace to add that amount of debt this year alone. With the looming crisis in Social Security and Medicare, that number is sure to go up.)
Dr. Obama, your “patient” is hemorrhaging. Before you apply your Big Government leeches, you might want to pay heed to the medical dictum, “First, do no harm.”
Sunday, December 14, 2008
Subscribe to:
Post Comments (Atom)
Post Topics
10 Questions with...
abortion
ACLU
alcohol
Alzheimer's
Ames Straw Poll
armed self defense
assault weapons ban
Audit the Fed
Austin Petersen
Barack Obama
Ben Lange
Beth Cody
Between Two Rivers
Bill Weld
Bob Barr
Bob Cashner
books
Bruce Braley
Bruce Hunter
Candidates
Carl Olsen
Cedar Rapids Gazette
charity
Chet Culver
Christopher Peters
Clel Baudler
communism
Confederate Flag
Constitution
Constitutional Convention
Corey D. Roberts
Crime
Cristina Kinsella
Dan Muhlbauer
debt
Declaration of Independence
Democrat Party
disasters
Donald Trump
drones
drugs
economy
education
elections
Eric Cooper
events
Facebook
Fast and Furious
First Amendment
food freedom
foreign policy
free markets
freedom
Gary Johnson
gay marriage
Glenn Beck
gold
gun control
Gun Owners of America
guns
health care
Hillary Clinton
history
Honey Creek Resort
Iowa
Iowa Caucus
Iowa City
Iowa Firearms Coalition
Iowa First District
Iowa Freedom Report
Iowa Gun Owners
Iowa Right To Life
Jake Porter
Joe Bolkom
John Boehner
John McAfee
John McCain
Judge Napolitano
Keith Laube
Lake Delhi
law
Lee Heib
Lee Hein
liberals
Libertarian Party
libertarianism
marijuana
Me
media
medical marijuana
memes
Memory Walk
Michele Bachmann
military
Mom
Nate Newsome
Nick Taiber
NRA
NSA
Obamacare
police
policy
politics
President Obama
primaries
privacy
property rights
Rand Paul
religion
Republican Party
resistance
Rick Santorum
right to carry
Rob Petsche
Rod Blum
Roger Fritz
Ron Paul
Rush Limbaugh
Ryan Flood
Sandy Hook Massacre
Sarah Palin
Second Amendment
smoking
Social Security
spending
Star Wars
State Defense Forces
Steve King
Steven Lukan
taxes
Tea Party Movement
Tenth Amendment
terrorism
Terry Branstad
Tom Harkin
traffic cams
TSA
TV/Movies
war
Wayne Jerman
weapons
Will Johnson
Yuri N. Maltsev
Zach Wahls
No comments:
Post a Comment