07/02/09

And the Stimulus keeps on Stimulating

Filed under: National — @ 05:31:31 pm

The Dow falls 223 points, 2.6%, because of unemployment numbers that just do not stop worsening. Since the passing of the “job-creating” and “job-preserving” Stimulus package, Americans have been getting laid off consistently. One reason is that the Stimulus spending has been merely a trickle, with most of the heavy spending to be done next year… the problem with that is this: this recession will eventually end due to the cyclical nature of the free market, it has always happened and it is expected. To initiate heavy stimulus spending during a “natural” upswing in the market will do two equally disturbing things: it will make the general public erroneously believe that it was the government’s economic intervention that led to the recovery and it will unnaturally improve the performance of the market leading to bubbles that will eventually bring us back into a recessionary period down the road. Even if the recovery comes later, the public will still be given the impression that the stimulus was effective while leaving the national debt at the highest levels in history. How do we measure the effectiveness of the stimulus and differentiate it from the normal US business cycle? The only thing that can be accurately measured from this stimulus is the inflation of the federal government and the cost to the taxpayer, two things that will end up burdening the economy in the long run and may lead to worse recessions in the future.

The problem with future recessions in a country where we have more than doubled the national debt and where the value of the dollar has gone down is that any future attempts at “stimulus” will not be possible or effective. This is what happened in Europe, where government spending has been at such high levels that they were unwilling and unable to pass stimulus packages like we did, and guess what? Europe’s recovery is proceeding just fine without excessive stimulus spending. Even though their unemployment levels are worsening, Europe’s unemployment is still decidedly lower than ours. What the government should be trying to do is avoid burdening the taxpayer with more expensive government, more taxes, and more free market restrictions. Taxing future America excessively is no solution for “saving” present America.

-AG

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