From
President Obama's speech last night:
Over the next two years, this plan will save or create 3.5
million jobs. More than 90% of these jobs will be in the
private sector - jobs rebuilding our roads and bridges;
constructing wind turbines and solar panels; laying broadband
and expanding mass transit.
Because of this plan, there are teachers who can now keep their
jobs and educate our kids. Health care professionals can
continue caring for our sick. There are 57 police
officers who are still on the streets of Minneapolis tonight
because this plan prevented the layoffs their department was
about to make.
Because of this plan, 95% of the working households in America
will receive a tax cut - a tax cut that you will see in your
paychecks beginning on April 1st.
The problem with this rhetoric is that it is based on a
misunderestimation of the historic proportions of what has
happened to the U.S. economy since 2006. We are not merely in a
transitory slump that can be cured by Keynesian "pump-priming."
The collapse of the housing bubble exposed systemic
weaknesses in the American financial structure.
This goes back to September, when
John McCain declared, "The fundamentals of our economy are
strong."
Michelle Malkin finally got fed up with what she called
the "Pollyanna conservatives" and burst out: "The fundamentals of
the market suck." And the sucking has only grown louder since
then.
The financial collapse was caused by excessive debt, and now
Obama and the Democrats seem to think that they can fix the
problem by borrowing money. One could endeavor to explain in
detail what's wrong with their plan -- inter alia, if
wind turbines were not cost-efficient enough to survive in the
market without government subsidies when gasoline was
$4 a gallon, why further subsidize Big Wind now? -- but these
specifics are trivial in comparison to the gigantic misconception
that what our economy needs is more deficit spending.
We are headed for '70s-style "stagflation." Never mind what the
Dow Jones does today; it will be below 6,000 by Christmas. Obama
doesn't know what he's doing, and what he's doing is standing at
the bottom of a hole demanding we dig faster.
UPDATE:
Peter Schiff sees much the same problem.
