From the government that brought you $1,000 toilet seats and $500 hammers comes the "Great Economic Stimulus Boondoggle of 2009". Okay, while it might be an appropriate title, that's not what it is called. President-Elect Obama's stimulus plan is actually called the "American Recovery and Reinvestment Plan."
In my article last week, I brought up the distinct parallels to Ayn Rand's book Atlas Shrugged and what is happening in the financial and political world today. In a Wall Street Journal article highlighting these startling similarities, Stephen Moore tells how Rand pilloried various acts of government futility and their "benevolent-sounding titles".
There is the:
- "Anti-Greed Act" which is meant to redistribute income
- "Equalization of Opportunity Act" to prevent people from starting more than one business (to give others a fair chance) and the
- "Anti Dog-Eat-Dog Act" to restrict competition between firms and slow the wave of business bankruptcies.
While these acts sound far-fetched, they are not too far removed from what we have seen from Washington in recent months, such as the $700 billion "Emergency Economic Stabilization Act" and the "Auto Industry Financing and Restructuring Act" which followed.
And now we look forward to what will certainly be one of the biggest government-spending programs in history – Obama's "American Recovery and Reinvestment Plan".
Will it work? Will it help America to "recover"? Of course not. Let us count the flaws and discuss why this plan not only will not help America to "recover", but will make the sick patient even sicker.
In a speech before the student body at George Mason University on January 8, 2009, President-Elect Obama stated:
"It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe."
I won't even go into the assumption that what Obama is looking to do is provide a "short-term boost." Do you really think this will be a quick in and out procedure? Not hardly.
But the bigger flaw is Obama's Keynesian assumption that government can fix this economic downturn by increasing spending. In some cases, government spending can boost the economy.
