Over the last decade there have been two disastrous economic "bubbles." The first was the Dot-Com Bubble of 1999-2000, and the second was the Real Estate Bubble of 2007-2008. Both of those bubbles were artificially inflated in their rise, and both "popped" for the exact same reason.  They were both based on a false foundational premise in that they sought to serve phantom markets that simply didn't exist (or at least not at the time).

Unfortunately, the Obama administration's distorted ideas for creating jobs and stimulating growth of our weak economy are predicated upon the exact same phantom assumptions that led to these two major economic calamities.

Generally speaking, booming markets are a good thing. In boom times, everyone who wants a job can have one. People prosper. Spinoff industries are created in a ripple effect. Investment capital pours in as everyone wants to get in on the action. Cupboards are full. Happy days!

But what happens when vast amounts of money are spent on a product or service no one really wants or needs? Disaster -- especially when the root cause of the product's failure was because its raison d'être was "a solution looking for a problem."

In the case of the Dot-Com Bubble, the primary false assumption came from a new business model of online advertising billed as the new promised land of untold fortunes. Technology had made it such that any company, small or large, could have an internet website, and scores of new websites sprang up promising to become oases of desirable and useful content that would attract millions of eyeballs, all of which could be monetized by advertising revenue from legions of major advertisers, generating exponential revenues -- which, in turn, would drive both online and offline shopping revenue. It was going to be great! Boom time!

One small problem: at the time, neither those vast audiences of eyeballs nor the hordes of advertisers with their multimillion-dollar advertising budgets bothered to show up to the vast majority of the multitudes of new websites and generate any real revenue for them.  Consequently, very few of those first Dot-Com companies managed to survive. Bust time.

Thus, all those prosperous years during the 1990s of millions being made selling all the web hosting services, web servers, networking gear, computers, firewalls, telecommunications bandwidth, web design services, graphics work, e-commerce systems, ad serving, and an ocean of software created a vast infrastructure of "capability" -- but with no genuine critical mass of actual "market demand" to pay for it all.

A similar cycle happened with the Real Estate Bubble. Under the guise of "increasing affordable housing" and boosting homeownership rates, the federal government coerced mortgage lenders to make otherwise unwise loans to just about anyone with a pulse, regardless of creditworthiness. Suddenly, there was tremendous artificially inflated demand for new houses. Construction took off like wildfire, stimulating all the related industries, from lenders to realtors. Boom time!

One small problem: there weren't any more people able to faithfully make substantial mortgage payments than there were before the boom. All these new properties were being built for an assumed new incremental population of allegedly responsible home owners, which, in reality, turned out to be yet another phantom market. Consequently, foreclosures became epidemic. Bust time.

And just like during the Dot-Com boom, there was an initial period of peer-to-peer business activity that served to mask the underlying calamity approaching. That is, a lot of those new houses were purchased by all the people in the housing industry itself: home builders, construction workers, realtors, etc. But they were a finite group, too. So even when all the inside players had a new house, the industry kept on building more until the real problem eventually revealed itself -- i.e., there was no substantial and sustainable market for all the expanded inventory.

Speculative investors made the situation even worse, buying the easy credit houses as the property values rose rapidly amid the pseudo-demand, and then flipping them when the construction was complete to other investors eager to get in on the rapid appreciation game.  This Ponzi scheme came to an abrupt halt as soon as everyone began to realize that no one was showing up to buy all the excess homes and actually live in them. Consequently, cities across America now have thousands of either never lived in or quickly abandoned brand new homes rapidly decaying into blight areas.

These two disastrous "Boom & Bust" examples should therefore give us significant pause when observing the Obama administration attempting to "jump start" our economy. Ask yourself:

1. What good is building a $40,000 electric car that can go only 40 miles per charge, a car that no one wants and most people can't afford?
2. What good is pumping billions into windmill and solar panel companies when virtually no one is lining up to buy and implement these technologies?
3. What good is doling out billions in "state fiscal stabilization" (i.e., shoring up state government employee unions and teachers unions pension funds) in terms of creating any new jobs?
4. What's going to happen to the florescent light bulb business and other "green" businesses when it's finally acknowledged that their only justification for existence came from a hoax?

Thus, the trillion-dollar question becomes: Where's the legitimate and sustainable market for anything the Obama administration is doing to "stimulate economic growth"?

Yes, it is physically possible for the government to fashion and fund programs that put a lot of people to work for some length of time. But if a program doesn't produce some legitimately needed product or service that can be monetized and eventually become self-sustaining without tax dollars, then those jobs are really no different from a 1930s WPA job of digging ditches one day only to be filled up the next day -- another make-work illusion of the welfare state.

Small business, the biggest economic growth engine of our economy, has made it crystal clear that loans, subsidies, and tax credits aren't the "stimulus" they need to thrive and expand; they need more paying customers -- real market demand.

How is it even possible that a government can, of itself, "grow an economy," when every dollar it uses to do anything was either 1) confiscated from the economy in the first place, and then gets returned at pennies on the dollar after deducting its bloated overhead expense; 2) borrowed, and thereby saddling the economy with the debt plus interest, thus reducing available market capital; or 3) printed out of thin air, thus inflating the currency and reducing the value of existing dollars?

And therein lies the disastrous disconnect of Keynesian futility: the federal government may think it has the power to stimulate economic activity, but in reality, it is completely impotent when it comes to stimulating actual and not phantom market demand for anything other than what it itself consumes.

This is why, as Thomas Paine said, "The government is best that governs least."

Robert Gelinas is a technology executive, publisher, and author of many novels and articles. He can be reached at publisher@archebooks.com.