I have been studying up on a couple of different things so I did not have much time to write (plus it is bowl season). I was thinking of writing about Obama’s broken promise of transparency with the health care debate, but does that really surprise anyone. Even C-SPANs very public request to air the ongoing debates has fallen on deaf ears. Its so bad that even CBS had to run a story on the administrations lack of transparency. For those of you that do need some health care broken promises to pass on, here are a few. Maybe I will tackle that tomorrow. Today I will instead be lazy and just leave you with 5 examples of failed government attempts to spend their way out of a recession. And I only list these because Obama is pushing yet another stimulus. (and the house has already passed one…did you know that). It seems despite repeated failures, liberals still believe in economics cooked up decades ago by John Maynard Keynes.
The examples:
- During the 1930s, New Deal lawmakers doubled federal spending–yet unemployment remained above 20 percent until World War II.
- Japan responded to a 1990 recession by passing 10 stimulus spending bills over 8 years (building the largest national debt in the industrialized world)–yet its economy remained stagnant.
- In 2001, President Bush responded to a recession by injecting tax rebates into the economy. The economy did not respond until two years later, when tax rate reductions were implemented.
- In 2008, President Bush tried to head off the current recession with another round of tax rebates. The recession continued to worsen.
- Now, the most recent $787 billion stimulus bill was intended to keep the unemployment rate from exceeding 8 percent. In November, it topped 10 percent.
As Glenn Beck would say, the way to win an argument with a liberal is to use facts. So don’t be afraid to use your nerdy side when someone tries to defend Obama’s (and Congress’) spending policies. Tomorrow I will have something a little better.
{ 2 comments… read them below or add one }
“In 2001, President Bush responded to a recession by injecting tax rebates into the economy. The economy did not respond until two years later, when tax rate reductions were implemented.”
Exactly. At the time economists warned that one-time rebates rarely worked because consumers tended to use the money to pay off debt or put it in the bank. Reducing the tax rate works because it goes out into the future, and consumers can confidently predict more money in their pocket not just today, but tomorrow as well.
I think you may give people too much credit as far as saving the money, but you will have some of that. I think administrations do count on the fiscal irresponsibility of its citizens when they give tax rebates and hope for very short term gains, but the long term solution is reducing tax rates like you said. It adds long term confidence and it also takes out our wasteful middle man (government) by never letting them take the money from you in the first place.
The same holds true for the stimulus or any other government solution such as cash for clunkers. It was funny today we got briefed at work on how our company is doing and one of the slides showed how industries we count on for our busines are doing…one of them being the car industry. It showed an extreme spike upwards when the cash for clunkers program was started. But then he laughed as he showed us the just as extreme spike downwards a month later. Even better the briefer was European. Classic.