When will Obama learn that deficit spending is not the way to stimulate the economy? When will he realize that by adding to the deficit, he is stopping business from borrowing to create jobs and blocking consumers from getting the capital they need to make purchases?
With Treasury debt up 41 percent over the past year and commercial and consumer lending down by more than 20 percent, doesn't Obama get the point that by hogging the loan window, he is blocking, not catalyzing, job creation.
Yet despite the evidence that stimulus 1 did little to cure the recession, he proceeds with stimulus 2. Like the Medieval doctors who bled a patient to expel the evil spirits that they believed were causing his illness, he drains the economy of the capital it needs to grow. And, when the patient got sicker as the blood flowed out, the doctors decided they had not bled enough and resumed opening his veins. Likewise, Obama has figured that he has not diverted enough capital to the public sector and is about to reopen the spigot.
And, in a novel way to encourage economic growth and new spending, he has announced drastic tax increases on the horizon for next year. What an incentive to potential consumers to know that next year, they will have to pay taxes that are about one-eighth higher than those they pay this year (from 35 percent to 39.6 percent)! And what an inducement to investment to know that when you go to sell your real estate or stocks, you will be socked with a capital gains tax 33 percent higher than at present (15 percent to 20 percent)!
With incentives like these, no wonder the unemployment rate seems stuck at its current high level.
Recall Obama!