The View From 1776
Tuesday, October 18, 2011
Obama and his henchmen, having a record dominated by abject economic failure and strong-arm imposition of socialistic programs like Obamacare, appear to have concluded that lying is the best course open to them. It worked for their fellow socialist Joseph Goebbels, Hitler’s propaganda minister.
The Washington Post fact checker, once again, spears Democrat/Socialist Party deceit.
One radical distortion of the truth he fails to mention: Senator Reid, speaking of Obama’s Keynesian stimulus proposals such as the so-called jobs bill, said “These programs have worked in the past. Republicans know they’ve worked in the past.”
Senator Reid cannot name a single instance in which Keynesian spending, of any character and for any purpose, revitalized the economy without spawning ruinous inflation, which wipes out much of the superficial, short-term economic gains produced.
Presidents Herbert Hoover and Franklin Roosevelt, from 1930 until the beginning of U.S. involvement in World War II in 1941, massively expanded Federal spending and attempts to manage the economy. Unemployment never averaged less than double-digit numbers. Just as is the case today, during that long slog, inflation was relatively low, but it surged after the end of the war, when business began to revive against the background of greatly excessive money supply and interest rates, held as today, at abnormally low levels by Treasury and Federal Reserve manipulation.
President Johnson’s Great Society 1960s’ welfare-entitlements, setting the precedent for Obama’s revival of thrusts toward full-scale socialism, led the Federal Reserve to expand the money supply to finance the surge of deficit spending. Stagflation - deep unemployment and simultaneous double-digit inflation in the 1970s - was the result.
The big stock market crash of 1987 induced Fed chairman Alan Greenspan to open the fiat-money-creation spigot, setting off a surge of inflation that, analogously to our recent housing market and subprime mortgage bubble, gave us a huge and devastating financial market bubble: the dot.com boom and bust.
Exactly the same pattern was reprised by the Fed to foment the wildly excessive expansion of mortgage credit accommodating the Federal government’s mandate to increase home ownership among uncreditworthy borrowers.
In short, the Keynesian programs about which Senator Reid lied (there is no other accurate word) are examples of a fool’s game.