Fiscal Fraud
Can we put to rest the notion being circulated by President Obama and his acolytes that passage of his expansive budget (or something close) is a fundamental and necessary step on our road to economic recovery?
A few facts may be illuminating. Average recession duration since World War II is 10.4 months—with a range of 6 to 16 months. Our current downturn is right about at the 16 month mark. Over the past several weeks we have begun to see tangible signs of improvement in a myriad of economic indicators. Some, such as durable goods (admittedly historically volatile) and the various housing-related gages, have turned positive, while others have exhibited a considerable slowing in their rate of decline.
The reason for this is much more simple than most politicians and pundits would have us believe. Our economy is incredibly resilient. Markets eventually clear. Prices and supply adjust accordingly, and demand ultimately is reinvigorated. There are rational steps government can take to accelerate this process, many of which have been addressed in previous blog entries. In this instance, however, the recovery is largely proceeding in spite of government action, not being hastened by it—with the very real exception of the Federal Reserve's efforts to reduce interest rates.
Virtually none of the dollars from the gargantuan non-stimulative "stimulus" package have made their way into the economy. Independent assessments indicate that over 78% of the total will be spent long after the economy has turned positive, and will have little impact on long-term sustainable growth.
Despite all of this, the President is promulgating the canard that a further massive expansion of government, in the form of his $3.6 trillion budget and $9.3 trillion increase in the federal deficit over 10 years, is necessary to get us back on our feet. Any clear thinking person can see that there is no such linkage.
If the President and others want to dramatically expand the role and size of government, fine, let them sell their package on its merits, not on the back of a disingenuous premise that it's a prerequisite for relieving our immediate economic pain. The President loses credibility when such an obvious untruth is used to promote a controversial agenda.
The President, in my estimation, actually has identified the right budget focal areas. Healthcare, energy, and education reform are all critical for our longer-term economic vitality. Unfortunately, he negates the proper recognition of priorities and jeopardizes our prospects by proposing government-centric solutions that spectacularly expand bureaucracies that have no history of effective and efficient stewardship of such programs.
Will he indefinitely turn a blind eye to market-based incentives that have proven time and time again to be most successful?
A few facts may be illuminating. Average recession duration since World War II is 10.4 months—with a range of 6 to 16 months. Our current downturn is right about at the 16 month mark. Over the past several weeks we have begun to see tangible signs of improvement in a myriad of economic indicators. Some, such as durable goods (admittedly historically volatile) and the various housing-related gages, have turned positive, while others have exhibited a considerable slowing in their rate of decline.
The reason for this is much more simple than most politicians and pundits would have us believe. Our economy is incredibly resilient. Markets eventually clear. Prices and supply adjust accordingly, and demand ultimately is reinvigorated. There are rational steps government can take to accelerate this process, many of which have been addressed in previous blog entries. In this instance, however, the recovery is largely proceeding in spite of government action, not being hastened by it—with the very real exception of the Federal Reserve's efforts to reduce interest rates.
Virtually none of the dollars from the gargantuan non-stimulative "stimulus" package have made their way into the economy. Independent assessments indicate that over 78% of the total will be spent long after the economy has turned positive, and will have little impact on long-term sustainable growth.
Despite all of this, the President is promulgating the canard that a further massive expansion of government, in the form of his $3.6 trillion budget and $9.3 trillion increase in the federal deficit over 10 years, is necessary to get us back on our feet. Any clear thinking person can see that there is no such linkage.
If the President and others want to dramatically expand the role and size of government, fine, let them sell their package on its merits, not on the back of a disingenuous premise that it's a prerequisite for relieving our immediate economic pain. The President loses credibility when such an obvious untruth is used to promote a controversial agenda.
The President, in my estimation, actually has identified the right budget focal areas. Healthcare, energy, and education reform are all critical for our longer-term economic vitality. Unfortunately, he negates the proper recognition of priorities and jeopardizes our prospects by proposing government-centric solutions that spectacularly expand bureaucracies that have no history of effective and efficient stewardship of such programs.
Will he indefinitely turn a blind eye to market-based incentives that have proven time and time again to be most successful?
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