With "recoveries" like this, who needs [more] "stimulus?"
Stimulating Misery
Guest Post by Robert Romano
The White House is prepared to unleash another so-called “stimulus” upon the U.S. economy, according to Yahoo! News. Only, they do not want to admit it’s a “stimulus”. According to White House spokeswoman, Jennifer Psaki, "The fact is that this is a word game.”
It could add up to over $100 billion in tax funds when all is said and done. Which may help explain why the White House dare not use the “s” word.
First off, this would be the third such so-called “stimulus.” The first occurred in 2008 under President George Bush totaling some $152 billion. The second occurred earlier this year, costing the taxpayers $787 billion. And that’s without even calculating interest that will be owed by future generations for what amounts to record-level deficit-spending, borrowing and printing cash designed to prevent the economy from sliding—but actually further pushing it—into the Abyss.
Put together with $300 billion for foreclosure “prevention” in 2008, the $700 billion Troubled Asset Relief Program, $200 billion to nationalize Fannie Mae and Freddie Mac, over $300 billion in FDIC liquidity guarantees, the Federal Reserve’s $300 billion committed to purchase treasuries, and other initiatives, the federal government has kicked out more than $4 trillion to “rescue” the economy. And it has pledged as much as $12.8 trillion as “necessary.”
That’s over 3.58 times what the federal government collected in individual income taxes in 2007, some $1.115 trillion. Put another way, the government could grant a three-year moratorium on income taxes, and it would still not equal the amount of money that the government has put on the table in its failed attempt since 2007 to “stimulate” the economy.
In addition, the Federal Reserve has had the money spigots on high, more than doubling the money supply since last year. And it has left the federal funds rate near zero.
But to no avail. The stark fact is, the real reason the White House would rather not call its new plans “stimulus” is because, to date, the previous efforts have not achieved their stated aims. And the American people full well know it. The economy is still in recession. In fact, the Gross Domestic Product has shrunk for the past four economic quarters at about 2.7 percent.
All the while, the Administration has insisted the American economy is in “recovery.”
Unemployment has also continued to grow, with U-6 measured at 17 percent in September. Out of 300 million Americans, that means 51 million Americans are jobless according to the Bureau of Labor Statistics’ own data. Try telling them, the first two “stimuli” have worked wonders!
Foreclosures have also continued to rise some 5 percent since the summer, according to RealtyTrac, placing even more strain on the nation’s troubled banks—and destitute homeowners.
To make matters worse, the only things that appear to be stimulated are the national debt, now poised to surpass $12 trillion, and inflation. On the latter count, gold is holding steady over the $1,000 an ounce mark, both oil and gasoline prices have begun spiking again, and the U.S. dollar has been getting hammered since this spring with nations around the world fleeing dollar assets for safer climes.
Overall, the biggest impediment on an economic recovery has been the government itself. Loose dollar and easy money policies have contributed greatly to the boom-to-bust cycle of the economy. First there was the tech bubble. Then housing. Then commodities. And next, treasuries and other dollar-denominated assets. All because government will not get itself under control
Yet, the American people are told, the only way out of this mess is for the government to spend, borrow, and print ever more money. To nationalize the auto, housing, banking, energy, and health industries. To grow the national debt to over $20 trillion by 2020. And the American people know they are being fed not only a bill of goods—but also a doomsday scenario.
The national debt will surpass 100 percent of GDP some time in 2011. That is the point of no return. The point at which the country will always owe more than it can possibly produce in a single year.
Sooner or later, U.S. debt will lose its AAA rating, which will mean ever higher interest rates paid on that debt, robbing future generations of wealth they have not even earned yet. And in the future, it will simply not be possible for the U.S. to ever pay the debt back. In short, we will be bankrupt.
With recoveries like this, who needs yet another “stimulus” by whatever grandiloquent variation the Obama White House chooses to call it?
The truth is that this is no game. This is putting at stake the future prosperity of the American people, their children, and their children’s children. And if all this White House has to offer as a prescription is to spend more, its occupants may want to simply try doing nothing—as the one true change that could actually offer hope.
Robert Romano is the Senior News Editor for Americans for Limited Government (ALG).
