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There's no joy in saying "We told you so." Not when millions of Americans are beset by falling home prices, stagnant income levels, deteriorating job opportunities and rising consumer prices.
And let's not forget the trillions of dollars in debt America's politicians have saddled taxpayers with in an unsuccessful effort to alleviate these economic ills.
Free market advocates repeatedly warned political leaders of both parties regarding these inevitable "bailout byproducts," but they didn't listen. Instead, they rushed to reward their favored banks and bureaucracies for years of gross fiscal negligence — leaving taxpayers stuck with a scarcely-fathomable tab.
The only silver lining to this Keynesian tsunami? The failure of history's largest, costliest and least effective government economic intervention could be the impetus for an urgently needed course correction — and a long-overdue debunking of one of the greatest myths in our history.
According to Barack Obama and the New Keynesians, years of unrestrained and unregulated "corporate greed" pushed America to the precipice of a second Great Depression. That's when government rode to the "rescue" with more than $13 trillion worth of new spending, lending, loan guarantees and money-printing.
It's a familiar narrative — one evoking all too common misconceptions about the policies responsible for the depth, duration and the eventual demise of previous economic downturns.
Like its predecessors, however, this narrative ignores a flood of politically correct, government-mandated lending that helped artificially inflate the nation's housing bubble. It also ignores a steady increase in deficit spending in the years leading up to the recent recession.
This isn't a past tense situation, either — the interventionist spigot is still flowing. Washington is staring down its fourth straight budget deficit of more than $1 trillion, while the Federal Reserve is just now winding down its latest $600 billion installment of "quantitative easing."
Even Wall Street — which soaked up more than its fair share of the borrowed largesse — is finally saying enough is enough.
"They've done more than enough already," one investment analyst said this week. "Any further stimulus only increases the long-term risk of inflation, which we already view as high."
Indeed. Now if we could just wind the clock back three years — and $13 trillion.
In 2008, Keynesian economist Gauti Eggertsson published a paper in the American Economic Review which presented a theoretical basis for the Bush-Obama doctrine of "over-stimulation." His fundamental premise was that the interventionist policies of Franklin Roosevelt's administration lifted the nation out of the Great Depression — ostensibly in contrast to the policies of Herbert Hoover.
Amid deficit reduction calls for sacrifice, it's fair to ask: Where's Washington's? In many corners of the capital, the push is for higher taxes to close its spending deficit. If taxpayers are to have less for their priorities, equity demands that we should see how Washington's priorities have been ...
The Democrats seem to have given up on budgets. Hey, who can blame them? They've got a ballpark figure: Let's raise $2 trillion in revenue every year, and then spend $4 trillion. That seems to work pretty well, so why get hung up on a lot of fine print? Harry Reid says the Senate has no plans to ...
It would be crazy to drive with one foot on the brake pedal with the other foot flooring the accelerator. You would burn out the brakes and ruin the transmission. But that is essentially how the Obama administration and the Federal Reserve have been driving the U.S. economy. The extended period of ...
Elevating the fallacy of the false alternative to a foreign policy, John McCain and a few others believe Republicans who oppose U.S. intervention in Libya's civil war — and who think a decade of warfare in Afghanistan is enough — are isolationists. This is less a thought than a flight ...
A long time ago, in a Gotham far, far away, Rudolph W. Giuliani was a public servant without peer and an incorruptible crime fighter. But that was before he morphed into the man who would be Churchill. Seeking to capitalize on his newfound fame following 9/11, Rudy launched a bid for the 2008 ...
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