This week marks the one-year anniversary of President Obama’s nearly trillion-dollar economic stimulus plan—the one that was supposed to keep the unemployment rate from rising above 8%.  And what have we to show for it, other than a massive federal deficit, the certainty of much higher taxes for everyone and an unemployment rate above 10%--and climbing?

I continue to be amazed that so many people fall for the myth that more government spending is the answer to high unemployment.  Where do people think the government gets the money it spends?  It either prints it, which means that it is very much like Monopoly money, without the pretty colors, or it takes it from productive Americans in the form of taxes. Aside from whether the government spends money wisely, how can anyone think that a dollar taken in taxes will not result in less than a dollar in government spending? Tax dollars must first go into a federal agency, to be massaged by some bureaucrat before the dollars can go back out as spending.  It is interesting that the only area experiencing an increase in employment is the federal government, due no doubt to an increase in the number of people needed to massage and spend all of the Monopoly money.

History proves that high government spending does not reduce unemployment.  The New Deal, with massive government spending and budget deficits, was passed in 1932, supposedly to address the economic crisis known as the Great Depression. Even with all of the spending, unemployment stayed in double digits throughout the 1930s.
In 1937, five years after the New Deal passed, the United States experienced a Depression within a Depression. The unemployment rate in 1937 headed back up to 17%, where it had been in 1931, before of all of the New Deal spending started. In August of 1937, industrial production experienced the biggest drop ever recorded.  The stock market drifted back to 1931 levels.  Is it realistic to think that what we really needed in the 1930s was more government spending?

Like today’s stimulus plan, the New Deal was not actually designed to improve the economy.  It was designed to increase government control of the economy, while pretending to improve the economy.  Many of the New Dealers, including Franklin Roosevelt, were strong proponents of government intervention before the stock market crash of 1929. The Crash and the Great Depression were very convenient vehicles for fundamentally changing the American economy by increasing government control over what had been private enterprise.  Not only did the New Deal fail to address the crisis of unemployment, it prolonged the Great Depression and the economic misery of the American people.

Is all of this starting to sound depressingly familiar? We elect a president who has the most liberal voting record in the U.S. Senate. The President insists on rushing through a massive government spending program, supposedly to keep unemployment from increasing. Unemployment rises to double-digit levels—and stubbornly stays there.  While we are told by the government that the economy is improving, average Americans know the jobs are not there and avoid spending.  Even Wal-Mart sales declined this past December! The President then says the problem is that we have not spent enough and proposes another round of massive government spending to reduce unemployment—which the Senate passed just this week!

President Obama says jobs must be focus in 2010.  I thought jobs were the focus in Feb 2009 when the first stimulus was passed. Based on the results of the first round, maybe we’d be better off if the President focused on something else.  The First Dog, perhaps, or improving his putting?

I’m just sayin’.
What do you say?

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