Filed under: Democrat Corruption, Domestic Policy, Economy, History, Liberalism, Media Bias, Socialism
Seven hundred billion dollars was appropriated by Congress for the Troubled Asset Relief Program (TARP) of last fall. The general idea, as I understand it, was for the government to buy up the sub-prime mortgages on bank balance sheets so that banks would be free to loan again. This was intended to be temporary, for as the economy firmed up, the worthless mortgages would become worth something once again; the government would sell them and recoup taxpayers money, and perhaps even turn a profit. (Please tell me if I get this wrong).
The problem, as I understand it, is: “My God, this is the worst economy since the Great Depression and we have to do something right now.”
Just a minute there. The current unemployment rate is 7.2%. In October of 1933, the year that Franklin Delano Roosevelt took office, the unemployment rate was 22.9%.
In 1958 the unemployment rate was over 7% for six months, reaching 7.5%. In1961, unemployment was again over 7%. In 1974 unemployment reached 7.2% in December, and was over 8% for all of 1975 reaching 9% in May. It didn’t get down again to 7.2% again until mid 1977.
In 1980 and 1981 it was again over 7.2%; 8.5% by the end of 1981 and climbed to 10.8% by the end of 1982 and through most of 1983. It was 1987 before unemployment got down under 7% for a whole year. And then there was the recession of 1991-1993.
Thomas Sowell in a recent column said:
Two centuries ago, when there were plans to create a huge fund of money to pay off Britain’s national debt, the great classical economist David Ricardo objected on grounds that — no matter what the money was said to be for — politicians could spend it for whatever they wanted.
And of course, that’s what happened. We went from buying up garbage on bad balance sheets to bailing out companies that are “too big to fail.”
Now, Obama wants Congress to give him the rest of the TARP funds for getting a quick start on his big “economic stimulus” package, which seems to consist “infrastructure” spending and “green things”, and probably some other things. It will all be very “transparent” we are assured. Except we don’t know yet where the first funds went and now he wants 800 billion more.
States have received money for “infrastructure” every year in the highway bill. It has never been exciting to spend money on potholes and fixing bridges, so the states and cities have spent it on bike paths and light rail instead. But, as Dr. Sowell said politicians can spend it for whatever.
If we spend no more for”stimulus”, no additional appropriations from Congress, we’ve already wrapped up an 8.3% Deficit. Philip Levy points out that apparently $1.2 trillion in deficit spending leaves us having not done enough, but $1.6 trillion will return us to prosperity, unless we need more.
I have huge problems with the whole “we have to do something right now” part. When spending reaches “trillions”, I want lots of deliberation. Everything I have learned has taught me that stimulus plans don’t work.
Obama’s nominee for Secretary of the Treasury cannot remember to pay his own taxes, not just once, but for several years, though he was reimbursed for them by the International Monetary Fund.
And the confidence that will lead citizens and businesses to spend, borrow, invest, hire and invent will come from?