Well the cat’s finally out of the bag and it’s been loosed by none other than President Obama himself. Once again out on the stump where he is most comfortable and away from the Oval Office where decision making is required, the president is now taking a new tack, or it is an old one? He is now saying how much worse things could have been if not for his stimulus program. This is the standard progressive/statist line that we didn’t do enough… if only we spent more money our program would have worked.
But here’s the problem. To get the $787 billion stimulus package passed the president said that if we did nothing, unemployment would rise to 9%, but if we passed his stimulus package it would go no higher than 8%. Where is the unemployment rate? It is at 9.7%. So if things could have been worse if they did nothing, his economic team is totally clueless because they were the ones who put forth the 8% vs. 9% argument. Now Obama is trying to tell us that if we did nothing, the unemployment rate could have been in the double digits. Who says so? Is this his own projection or is his economic team back at the Ouija board? Is anyone from the economic team being fired?
Here is an alternate theory. If the stimulus plan was not implemented and the president cut taxes by $787 billion instead and promised not to introduce any new government programs for two years, that the unemployment rate would be much lower. How can I make such an outrageous claim? Let’s look to history. In 1920-1921 there was a steep recession where the unemployment rate hit 11.7%. Back then, government didn’t saddle businesses with regulations and businesses were free to cut wages and make other adjustments without government meddling. Within one year the unemployment rate fell to 6.7% and the following year it was down to 2.4% Contrast that to the Great Depression where we had massive government intervention and massive government spending and the unemployment rate never fell below 14.7%.
Bringing Jobs Back to America
Another brilliant example of your government killing the economy comes from the company Bucyrus Erie. They were bidding on a job in India to provide heavy equipment to help them mine coal for a power plant the Indians were building. Bucyrus Erie went to the Export/Import bank, a government agency, to try to get a loan guarantee to finance the deal. Because a coal plant would increase the carbon footprint of India, the Ex/Im bank turned down the request. This didn’t stop the plant being built, it just meant that the heavy equipment was going to be provided by China or Russia instead of the USA. There would be no effect on the carbon footprint, a big effect on jobs in the US. At the same time, President Obama is on the stump talking about how hard he is working to bring jobs back to the US. Really? They must have read his speech over at the Ex/Im bank, because they are reconsidering Bucyrus Erie’s request.
More government is killing our economy. Our economy is very tough and it is extremely hard to bring down, but the current administration is trying its best to do so.
