Who doesn’t like a good stimulus? A contrarian take on recent history

Johnathan Brown

Amid the greatest rut in recent memory, America starving for action, the prudish conservatives can’t help but cringe at the sight of Obama’s much-anticipated stimulus. While the GOPassé grumbles, others are ready to party. Buoyed by the sheer swank of impresario Obama, team blue is practically on the verge of bringing protectionism back. Merely one month after the curtains opened on the Dem show, America is prepared to invest a record $800 billion of loaned money into Keynesian futures through a stimulating little spending package. Meanwhile, Spender-in-Chief Obama assures the folks that “failure to act will only deepen this crisis as well as the pain felt by millions of Americans.” Now we’ve got FoxNews’ Ellen Ratner saying “few understand that in the current crisis doing something beats doing nothing — which would morally unforgivable.” When did our crisis become so simple and skeptical thinking a sin? Strangely enough, the failure of investors, banks and homeowners to properly account for risk in their securities and mortgages deserves much of the blame for our current situation. The latest attempt at spending the economy into perpetual growth backfired in a very expensive way, and already the country is ready to try it again.

FDR Presidential Library

So far on our journey through global financial disaster Americans have been asked to foot the bill for last fall’s hardly transparent $800 billion financial bailout, TARP. Lending continues to stagnate after banks gobble up taxpayers’ cash. After that came the little-known and even less transparent $2 trillion Federal Reserve conjuration to protect the banks’ asses…er, risky assets – what TARP was supposed to do. Now we’ve got an $800 billion spending package being ironed out by Congress and Treasury Secretary Geithner’s skeleton of a $2 trillion financial market recovery plan, which should have been prepared well before any stimulus was proposed. The grand total could reach $9.7 trillion once all Federal Reserve and FDIC measures are taken into account. In one way or another that amounts to nearly $33,000 per taxpayer; a burden disproportionately forced upon younger Americans. The President doesn’t think such indebtedness merits comment at this time, insisting on Monday that those who criticized the stimulus as a new New Deal were “fighting battles that I thought were resolved a pretty long time ago.” With apocalyptic threats freshly off-tongue, our president actually scorned the dissent of one of the largest spending packages in history. So much for Jeffersonian patriotism. The FDIC has been raised to $250,000, the Federal Reserve is shifting trillions of inflation-backed dollars to keep the doors open for potentially thousands of undisclosed banks, the government is on the heels of passing an $800 billion stimulus package and our president has the nerve to insinuate, against all the evidence presented in our textbooks, that the historico-economic consensus on the New Deal is a resounding thumbs-up? How convenient. Our Hypocrite-in-Chief then criticizes the Republicans, to whom apparently all blame should fall, as guilty of revisionist history for taking a stand against the stimulus after they destroyed the economy. Well now that we’ve got that bit of history settled, all we have to do is spend enough magic free money to get the economy going again. If private spending represents confidence, then public spending must create confidence, so the left thinks. Such measures have a price in the form of deadweight loss, purchase of obsolete or overly-expensive goods and services, government debt, foreign ownership of assets and larger portions of tax revenues squandered on interest payments. This Congress and administration seem to be concerned more with reasserting the unproven merits of massive government stimulus than fixing the frozen credit markets. Surprise, surprise. Perhaps it’s time we draft a stimulus package for our leadership – I’ve heard lobotomies work wonders.