But the other half of Obama's stimulus plan is even more troublesome and probative of Obama's allegiance to ideology rather than empirical and historical evidence. Contrary to most history and economics textbooks, Keynesian pump-priming stimulus packages do not lead to economic growth.
No central planning-type guru is as smart at allocating scarce resources as a free market pricing mechanism. As the Heritage analysts point out, when government spends $1 billion on highways, for example, hiring road builders and purchasing road materials, "It must first tax or borrow $1 billion from other sectors of the economy -- which would then lose a similar number of jobs. In other words, highway spending merely transfers jobs and income from one part of the economy to another."
Though liberals, such as Obama and the vast majority of history textbook authors, have a romantic attachment to FDR, the best evidence is that his New Deal did not end the Great Depression, but exacerbated it.
No one has done a better job in refuting liberal history revisionists and FDR apologists than Burton W. Folsom Jr. in "New Deal or Raw Deal? How FDR's Economic Legacy Has Damaged America."
Almost at the end of FDR's second term, the economy was getting worse, with unemployment at more than 20 percent. Folsom cites the words of FDR's treasury secretary and one-time confidant, Henry Morgenthau Jr., to make his case. These words should serve as a chilling reminder to all politicians even considering jumping on Obama's FDR big-spending bandwagon:
"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. … I say after eight years of this Administration we have just as much unemployment as when we started. … And an enormous debt to boot."
So when I read that Senate Republican leader Mitch McConnell has suggested that Obama's economic stimulus plan could receive "significant support" from Republicans if Democrats would just include Republicans in crafting the legislation, I have to ask, "Are they all Democrats now?"
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