Sunday, January 31, 2010

Why the fundamental idea of government spending for growth is wrong.

****Obama claims that he is not an ideologue but one of his most basic assumptions is not "truth" as he sees it but, rather, ideological and flawed, at that. Admittedly, it is one the Democrats have embraced since the days of FDR who first failed to recognize that, if you make war on capitalists, capital will go on strike. ( WWII finally forced capital to go back to work and the Great Depression ended.)****
http://tinyurl.com/yd4bhq9
Why Government Spending Does Not Stimulate Economic Growth:Answering the Critics And how taxes affect economic growth. By BRIAN M. RIEDL ,Heritage Foundation
Proponents of President Barack Obama's $787 billion stimulus bill continue to insist that the massive government bailout played a decisive role in moving the economy out of the recession. Yet assuming no destructive government actions, the economy's self-correction mechanism was widely expected to move the economy out of recession in 2009 anyway. With a parade of "stimulus" bills the past two years (going back to President George W. Bush's tax rebate in early 2008), it was entirely predictable that some would link the expected end of the recession to whichever stimulus bill happened to come last.
Indeed, President Obama's stimulus bill failed by its own standards. In a January 2009 report, White House economists predicted that the stimulus bill would create (not merely save) 3.3 million net jobs by 2010. Since then, 3.5 million more net jobs have been lost, pushing the unemployment rate above 10 percent.[1] The fact that government failed to spend its way to prosperity is not an isolated incident:...

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