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Written by Derek MacNeil-Blackmer
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Saturday, 21 February 2009 23:15 |
On Monday, February 9th, President Obama started his road trip, trying to convince people to support "his" stimulus plan that is pretty much assured to pass (it's hard to call the plan 'his' since it is more a product of a democratic Senate than any one person). Obama basically explained that the cause of our economic crisis is rich people having too much money and the government not doing enough to stop it (but he's not a socialist). Obama cited trickle down economics (his version of the "Hoover did it" line) as the source of our economic problems and said our economy was in a "vicious cycle" that only government can stop (but he's really not a socialist). Obama went on to say that the plan contains input from both republicans and democratics (despite the fact that no republicans voted for it) and is just big enough and has no added on pet projects (I'll believe that when I see it!).
Now don't get me wrong, I like this plan. I just share the same opinion of it as I do of communism: a good plan never to be implemented, especially by government. And Obama brought up several reasons why during his speeches. The first is the Great Depression, which many have argued was made great by government interference, far smaller than this plan. As noted in the book by Richard Vedder and Lowell Gallaway, "Out of Work", unemployment increased under FDR's administration, despite the saving powers of government. It wasn't until many of the programs, created to stop the great depression, were removed that the economy improved. The second is Japan's lost decade, the 1990s. When Japan's economy went sour, the government tried to stimulate it by spending vast amounts of money on just about any project they wanted, covering the country side in concrete in the name of infrastructure. Despite all this money being spent, Japan's stock market has never gone above half the peak it had before the 90s.
Now, you may ask "How does that affect me? The plan gives us students money and we won't need jobs for several years." The problem is that despite what Obama seems to think is clear evidence to support his plan, history has in fact taught us that government doing nothing in an economic crisis is often better that it doing anything. As Thomas Sowell will be glad to tell you, there were no great depressions before the government solutions of the 1930s. Already the economy is starting to improve, albeit not job wise but speculation wise which is where it starts. Commodity and energy stocks are stabilizing, which are usually the first stocks to rise. Pessimistic estimates say that improvements will come within a year, while the stimulus plan focuses mainly on long term goals, with most of the money coming over a year from now, so at best it will be too little too late, and an expensive too little at that. At worst, it will delay economic improvement and we could end up having a lost decade, or two, and then it becomes your problem.
If there is one things governments are terrible at (though it is hard to think of one thing they are good at) it is micro-managing the economy. This is why every communist country has gone closer to capitalism (experiencing greater prosperity in doing so) and is very well summed up in the case of Korea. Though North and South Korea share a common history and are disconnected by only a 3 mile wide line, North Korea is ranked 74 less than South Korea in terms of GDP.
Obama and the democrats keep forcing this bill that they know will pass. Is it because they want it to take immediate effect, or is it because if there is an actual debate, people may learn just what the plan will mean?
Derek can be contacted at
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Last Updated on Sunday, 22 February 2009 01:14 |
