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Government Stimulus NEVER Works

Mike

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With a flamboyant downgrade of the outlook for economic growth, jobs, and profits, Wednesday’s 280-point Dow plunge to launch the so-called June stock swoon is a warning shot across the bow.

The Dow tanked alongside a batch of dismal economic data. The ISM manufacturing index, ADP employment, Case-Shiller home prices, and consumer confidence are all pointing to 2 percent growth or less, rather than the kind of 5 percent growth we ought to be getting coming out of a deep recession.

The economy now looks like a Government Motors engine that’s stalling out. Or perhaps, with energy and food inflation, and housing deflation at the same time, the economy is acting like a pinball machine on permanent tilt.

There’s a key message here: Big-government stimulus never works.


First there was the massive Obama stimulus spending. Then QE1. And now QE2 is winding down. And what did we get for all this? Slower growth overall, paltry job creation, more energy and commodities inflation, continued housing deflation, and virtually no new business start-up entrepreneurship.

We know the Obama spending package failed to create a 7 to 8 percent unemployment rate, as advertised. And now we’re learning that the Fed’s QE2 has actually done more harm than good.

All that money-printing stimulus worked to depreciate the dollar and jack-up commodity prices, especially oil and gasoline, but also food. So both companies and consumers have been punished.

Some demand-side boneheads on Wall Street want the Fed to move to QE3, allegedly to fight a stalling economy. But if the central bank prints another $600 billion or so, all that will do is sink the greenback another 10 percent and drive oil and gasoline prices higher and higher. And that, in turn, will slow business and consumers even more.

The Japanese disaster is undoubtedly playing a role in the manufacturing slump — probably a bigger role than most economists predicted. Production supplies are scarce or non-existent, especially for autos and electronics, but also for many other sectors of the economy.

Then, of course, there’s all the bad weather: Hurricanes, tornadoes, and floods have depressed all kinds of economic activity here at home.

There also are jitters about the ongoing saga in Greece. The potential for a Greek bond default and various credit-agency downgrades are taking a toll on stock markets around the world.

But this whole boom-and-bust monetary policy, with its blatant disregard for King Dollar, is a snare and a delusion. Stabilize the greenback by linking it to gold. Then move to the supply-side: Slash individual and business tax burdens, roll back enormous regulatory costs, and stop the merciless threat of higher future taxes.











1 Comments


DANIEL CABRERA

The current situation,as result of the so called ’stimulus’,….all the economical garbage around,…and in addition,the weakening of our national security,… although it may sonds sardonic,..but I think that even a lobotomized frog could see it coming….but not the lieral-democrat factions (for sure none of the ultra-obamanized Obama worshipers).

Boys and girls, we need to start shopping for a real true-core patriotic american president, don’t we?….and we all know where to find such a person, right?

Input anyone?

Respectfully,

Daniel Cabrera
Merrillville,Indiana




7:24 PM 06/01/2011 - 7:24 PM Log in to Reply | Report Comment



































Read more: http://dailycaller.com/2011/06/01/struggling-economy-is-more-evidence-that-government-stimuli-never-work/#ixzz1O5Eme0no
 

Faster horses

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Oh, but Mike, I just got an email that says, President Lowers mortage payments by 40%. :shock:



If your home is your primary residence and you owe less than $729,000 on your mortgage, you probably qualify for the President’s Home Affordable Modification Program. The typical modification under this program drops a homeowner’s mortgage payment by 40%. Find out if you qualify.

Other programs under the Making Home Affordable Plan allow qualified homeowners to have their interest rates drop to as low as 2%, their payment period lengthened, and other modifications to help them afford their homes.

Visit LowerMyBills today and we will match you with the best possible lenders.

How can this be? Who picks up the tab?
 

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