PrintMay 27, 2010
Folly Central: Obama Considers Another Stimulus
Another stimulus. That's right. You read correctly. The U.K.'s Telegraph reports that dour President Obama and his cadre of thick-headed left-wing ideologues are weighing additional borrowing. This time to the tune of $200 billion. Paltry when stacked against the trillions in debt the nation is already massing? Can you say the "tyranny of compounding interest?"
According to the Telegraph, the U.S.'s money supply is shrinking alarmingly. The report quotes Professor Tim Congdon from International Monetary Research, who says:
"It's frightening. The plunge in M3 [money supply] has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly."
But a sober-minded approach to money supply and quality isn't the Obama Way. Seems that Mr. Obama believes that just a wee-bit more stimuli will finally turn things around. The Telegraph reports further:
The US authorities have an entirely different explanation for the failure of stimulus measures to gain full traction. They are opting instead for yet further doses of Keynesian spending, despite warnings from the IMF that the gross public debt of the US will reach 97pc of GDP next year and 110pc by 2015. [Emphasis added]
We all know that Mr. Obama suffers Euro-envy, but Greece-envy? The debt percentages to GDP cited above are simply astounding. And chilling.
More from the lucid and sober Professor Congdon:
[T]he Obama policy risks repeating the strategic errors of Japan, which pushed debt to dangerously high levels with one fiscal boost after another during its Lost Decade, instead of resorting to full-blown "Friedmanite" monetary stimulus.
Yet another pearl from the professor:
"The US has just tried the biggest fiscal experiment in history and it has failed. What matters is the quantity of money and in extremis that can be increased easily by quantitative easing. If the Fed doesn't act, a double-dip recession is a virtual certainty." [Emphasis added]
And to think that establishment economists and the mainstream media dismissed us loony conservatives' warnings that Keynesian economics are a sham and another recession would result if Mr. Obama persisted in Keynes' long discredited policies. Well, the left always knows better, doesn't it?
President Obama and his buffo economic team are leading the U.S. down a path without the joy of even one primrose. As we can see, it's a path strewn with thorns and thistles. And somewhere, not far distant, is a deep, deep hole.
