Other People's Money
Economy: The jobless rate has hit a 26-year high. More than 200,000 jobs were lost last month. Yet the White House continues to claim its stimulus legislation is working. When does the charade end?
The unemployment rate reached 9.7% in August, up from 9.4% in July, the worst we have seen in this country since 1983, when Ronald Reagan was wrestling with the economic mess. While Reagan's policies eventually moved the country out of the recession and set off unprecedented growth, it's unlikely the Obama administration will be able to do the same thing.
Rather than letting the private sector create jobs and wealth, as the Reagan White House favored, this administration, with the help of the Democratic Congress, has taken money from the private sector - $787 billion - and tried to boost the economy with government spending. It hasn't worked - and it won't work in the future.
Sure, America's economy will eventually rebound. Its free-market foundation is strong enough to withstand even the wildest left-wing attacks - as long as the attacks are followed by corrective policies. But the recovery won't be due to Washington's stimulus.
The facts won't stop the White House from trying to convince the public otherwise, though. Ever in denial, Vice President Joe Biden said Thursday the stimulus is "doing more, faster, more efficiently and more effectively than most expected."
He also said passing the American Recovery and Reinvestment Act "was the right thing to do morally."
It's alarming this nation has reached a point where taking wealth from one group for the benefit another is considered "moral."
It's deeply disturbing, as well, that the leaders of our political class, who have run up debt that will hit $14 trillion in 10 years, believe it's moral to spend money they don't have.
As of Aug. 28, only $88.8 billion of the $787 billion "stimulus" had been spent. But don't take that as an indicator that more spending is the answer. Here's Heritage Foundation analyst Brian Riedl explaining things in National Review:
"In 1939, after a doubling of federal spending failed to relieve the Great Depression, Treasury Secretary Henry Morgenthau said that 'we have tried spending money. We are spending more than we have ever spent before and it does not work. . . . After eight years of this administration we have just as much unemployment as when we started . . . and an enormous debt to boot!' Japan made the same mistake in the 1990s (building the largest government debt in the industrial world), and the United States is making it today."
Riedl points out that if government spending worked, "the record $1.6 trillion in deficit spending over the past fiscal year would have already overheated the economy. Yet despite this spending, which is equal to fully 9% of GDP, the economy is expected to shrink by at least 3% this fiscal year."
If government spending were the key, we would have had consistent economic growth through the decades of deficits. History, though, exposes the myth.
Plundering the private sector does not increase prosperity. The lesson is there for anyone to grasp. It's almost demoralizing that some refuse to learn from the long trail of mistakes.
