Obama Gambles the Presidency with Stimulus
I believe that Obama has unnecessarily gambled his Presidency over the pork-filled Stimulus Bill. If this package fails and is exposed for wasting tons of money and causing inflation, this could be Obama’s last term. It did not have to be this way; he could have structured and driven home his own bill, one without pork solely focused on economic stimulation and growth. Instead, he dumped it off to Congress which seriously damaged it.
Now Obama is already trying to hedge himself. In his recent speech campaigning for the Bill, Obama said “I’m not gonna tell you this [stimulus] bill is perfect. It’s coming out of Washington. It’s going through Congress.” No President Obama — this Bill came from you (and yes you are now part of “Washington”), and instead of doing what was right, you punted it to Congress with expected results. So don’t be surprised if you get the blame if Stimulus doesn’t work out the way you told us it would.
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February 16th, 2009 at 3:19 pm
Keynesian economic theory suggests that goverment intervention is needed when the mechanics of the capialist system don’t run with precision. Wages can beome inelastic to supply and demand factors in labor markets.When there are more laborers than jobs, wages decrease, but when there are more jobs than laborers, the wages don’t always increase.Keynes described this as “sticky wages”. The goverment has a responsibility to facilitate, through spending and regulation, the supply and demand factors because of reasons as such. Democrats subscribe to keynesian economics by stimulating the economy with spending to create more jobs which in turn will create more consumption. Inventories will decrease and investments will increase.Thus, goverment spending will stimulate the gross domestic product.Also, increase in capital is not the only reasons for increase in growth rates in the economy, which is sugessted through the “Bailout”. Human capital is equally as important to the growth of the economy as any other form of capital. Therefore, the health and education of the population must be stimulated also for the economy to grow.Fifthy percent of businesses in America are small business(businesses of 1 to 50 people).We must encourage entreprenuership, which is the engine to our economy, and not just that of large corporations, to get the economy on it’s feet.
The banking system is often referred as the lubricant to the US economy, not the engine. The growth of banks are not the leading factors of GDP. The growth of banks is a result of growth diffusing from other industries.The “Bailout” focused on the lubricant instead of the engine as a result it supported more waist like a broken engine would with too much lubricant.A engine with too much lubricant will leak and waist. If the stimuls plan invest in human capital in addition to physical capital the economy will start growing enventually.
It seems that Obama may very well be the most analyzed President due to the historical nature of his presidency. I don’t recall Bush or any other president first 100 days in office being scrutinize so closely in the media.I think we should support our president for he has a challenging task before him, records highs of unemployment, inflation, and foreign and domestic turmoil.
Let’s support our president that clearly supports the people and not just his constituents. Let’s support our president Barack Obama by investing in ourselves and others. We still have the human capital to increase the growth rate in our economy we just have to employ it.
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MJK
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February 25th, 2009 at 12:37 pm
Elvin, whether one agrees or disagrees with Keynesian economics, any stimulus package that is used as a trojan horse to get in spending for social programs and pet projects that otherwise have no stimulative effect, is not Keynesian. Rather, it’s a waste of money. The Congressional Budget Office, and other economists, say that only 40% of this package will have any near term stimulative affect. Worse, it was used by Congressional Democrats as a trojan horse to get in their pet spending projects, without any regard for whether such projects will help the economy or are affordable. Obama did not lead on this; he followed risking his legacy in the process. The following two links are just examples from the millions of web pages that discuss the pork-a-thon Congress has created for us. See, e.g., http://www.foxnews.com/politics/first100days/2009/02/12/pork-platter-stimulus-contains-items-boost-economy/ and http://www.newsmax.com/newsfront/stimulus_pork_spending/2009/01/29/176503.html.
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February 16th, 2009 at 5:33 pm
Do I hear Carter Part 2, the curse of Democrats?
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February 24th, 2009 at 8:53 pm
Brian,
Actually this is not just a philosophy subcribed by the democrats, but republican alike. When the banking system experienced economic crisis, republicans pushed for socialist policy,TARP. It seems republicans subscribe to socialism when they are in need, and postulate ideals of capitialism when others are in need.
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MJK
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February 25th, 2009 at 12:45 pm
Wow such a skewed view regarding those elite Republicans! There is no question though that the rich bankers really had a good one on us; they made all the money when things worked well, and when things die, we all sink down the drain with them. Great job guys!
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