President Barack Obama outlined new multibillion-dollar stimulus and jobs proposals Tuesday, saying the nation must continue to "spend our way out of this recession" until more Americans are back at work.
After being concerned about too much spending he now wants more spending since he thinks the last round was not enough? Make up your mind!
"We avoided the depression many feared," Obama said in a speech at the Brookings Institution, a Washington think tank. But, he added, "Our work is far from done."
Actually, no one is at liberty today to say whether or not America has avoided a depression since the concept is not precisely defined; that is, it has not been given strict standards that give us the precise measurements that would determine when a depression is officially present. As of right now the concept is merely a vague approximation used to describe an economic situation that is more intense than a recession, though exactly how much more intense is what is unknown. For what we know we could be in a depression right now but not really aware of it since our present standard of living does not give away to national suffering so quickly.
A major part of his package is new incentives for small businesses, which account for two-thirds of the nation's work force. He proposed a new tax cut for small businesses that hire in 2010 and an elimination for one year of the capital gains tax on profits from small-business investments.
Tax cuts that will amount to nothing given Obama's proposed spending. For every dollar the government spends that is one fewer dollar for a private citizen to spend. Since rising taxes would be far too obviously hypocritical on Obama's part, I predict that he will resort to printing money, and, of course, printing money amounts to a hidden tax since it devalues/confiscates the value of the money of private citizens. The ridiculous episode of hyperinflation in Zimbabwe, for instance, has made it so that one-hundred-trillion Zimbabwean dollars ($100,000,000,000,000) is only valued as equivalent to ten U.S. dollars ($10).
Obama also proposed an elimination of fees on loans to small businesses, coupled with federal guarantees of those loans through the end of next year.
Which will do further damage. Elimination of fees on loans will make loans unprofitable and thus unbeneficial from the investor's perspective, and the federal guarantees will only exacerbate the problem by making it almost certain that loan companies will have to suffer loan defaults and thereby risk going out of business. Remember the Community Reinvestment Act, which caused the financial crisis in the first place?
I could go on analyzing this article, but it becomes depressing to think not only are economic mistakes continue to be made and are continuing to harm the economy, but that our politicians are making precisely the same mistakes down to the last detail. It should become quite apparent now that, despite his impressive education, Obama is an intellectual and philosophical mess.
Economic recovery is very much longed for, but it seems we must bear the difficulties for a while longer yet.
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