Obama’s Terrible Stimulus
During the recent presidential election, I found myself unfortunately defending Barack Obama from charges that were absurdely false (ex. Obama’s a foreigner, Obama’s a Muslim, Obama’s a terrorist) than demonstrating how absolutely terrible an Obama presidency would be for country and for individual liberty. Fortunately, Obama is demonstrating through his policy proposals how dangerous he is. The first example of his dangerous presidency is his so-called “stimulus” plan.
Obama calls his economic “recovery” plan the “American Recovery and Reinvestment Plan”. His plan calls for a series of new spending programs on everything from roads (to nowhere) to “green collar jobs” to another series of tax rebate checks.
Why is Obama’s plan terrible?
Obama’s plan is terrible for many reasons. The first obvious reason is that the country really cannot afford any new spending after blowing at least $8.4 trillion (in an overall economy of $13.8 trillion and shrinking) in bailouts for Bush and Paulson’s friends in the financial sector. The second reason is that very little of this new spending is actually permitted in the U.S. Constitution. The Federal government cannot “invest” in “green collar jobs” or any other type of jobs for that matter. The Federal government has no Constitutional role in education spending (which is another part of Obama’s “plan”). Thirdly, the areas where you can argue a legitimate duty of the Federal government, highway construction, is prone to abuse and wasteful spending through the earmarking process (which is the currency for corruption).
What about Obama’s tax cuts?
The tax cuts are probably the worst aspect of the plan. The left, including Barack Obama, were absolutely right to oppose the Bush tax cuts in 2001 and again in 2003. The Bush tax cuts were short sighted and were flawed economic thinking. Most importantly, the Bush tax cuts were paid for by borrowing instead of cutting spending. Which leads me to Obama’s tax cut plan which allows businesses to write off up to $250,000 in losses in 2009 and will give another rebate check of $500 for singles and $1000 for families. Obama suffice to say is not proposing any spending cuts (which are desperately needed if we are going to avoid a Weimar Germany-style financial collapse through hyperinflation) to pay for these reckless and irresponsible tax cuts.
Tax cuts are not good for individual liberty unless government spending is reduced along with it. Instead what usually happens is the LBJ-Bush-Obama economic theory which is we can cut taxes (temporarily) to appease the mob while we can borrow our way out of any financial shortfall the government finds itself in. When taxes have to be raised to pay for borrowing, the tax increases are higher than the money actually returned in the tax cut.
Overall the Obama “stimulus” plan is result of over 70 years of terrible economic thinking in the US which brought us “New Deal” type of mild socialism on the left and “supply-side” borrow and spend on the right.
The only viable economic alternative is the free market where role of government is limited to protecting the borders from invasion; enforcing laws protecting life, liberty, and property from force and fraud; and generally not much else. This is the only alternative to what’s facing us (lost liberty, hyperinflation, and the road to tyranny).