THE DEBATE BETWEEN GOVERNMENT STIMULUS AND FREE MARKET CORRECTION

 “The Stimulus has created or saved 2 million jobs”.  This is Team Obama’s story and they are sticking to it.  The number has been debunked and refuted for months.  Government jobs have been found to be fastest growing sector, with them averaging nearly $30,000 a year more than private sector jobs.   And much of the Recovery Act has gone into propping up state public employment, as well as an astronomical $120 billion slated for the Department of Education last year.  Many in the Democratic leadership have claimed that this has saved the nation’s economy.  However this money does not come out of thin air.  Where did the nearly $800 billion(some say as much as 826 billion) come from?

The 2009 Stimulus Program is an example of public sector pump printing.  No wealth has been created by this, they have simply shifted the people’s money around.   In the free market society, when a business is losing money it has to make cuts in expenses, which may unfortunately include labor.  Small businesses, who have not been helped by the Recovery Act in any meaningful way, have had to do less with more.  Last quarter, labor productivity has up nearly 10%. 

The owner of St. Louis Strings says “We have almost doubled are sales from last year.  It is all about making sales.”  He had to figure out how to make his store work in the face of the Obama agenda’s possible negative impact on the economy.

Who better to control these resources, the owner of this small business who succeeded IN SPITE of bad government policy, or the government that responded to a deficit by increasing it from nearly $500 billion in 2009 to $1.4 billion in 201?  The total national debt is around $13 trillion.

The Recovery Act and Second TARP have cost almost $1.6 trillion.  Unless the economy has grown well over $2 trillion directly because of these measures, one can hardly say that  it was worth it because they supposedly produced 2 million jobs based on a statistic that cannot be proven. 

This $1.6 trillion eventually has to be borrowed, which drives up  real bank to bank interest rates or even makes funds unavailable for business.  And if they print up money, eventually it will greatly reduce the value of our currency in hand.  The money supply has been doubled since the great Stimulus party began.  The reason why the CPI (Cost Price Index) has not gone through the roof is because of the 18% real unemployment and the fact that financial institutions are holding on to their funds. 

Well, that reluctance to lend is directly caused by the Stimulus, so it is actually destroying, not creating jobs.

If anyone has saved and created 2 million jobs, it has been the people for working hard in the face of this uncertainty, and the Tea Party and town hall activists who  stopped Cap-n-Tax, Card Check, Amnesty, and Health Control from “fundamentally changing America” in 2009.

Excellent music video rap debate between F. A. Hayek and Keynes.  http://www.youtube.com/watch?v=d0nERTFo-Sk

Harding’s policy. http://www.firstprinciplesjournal.com/articles.aspx?article=1322&theme=frmar&loc=b