Stimulus May Be Just The First Chapter

by Jim Puzzanghera - February 22nd, 2009 - Los Angeles Times

Reporting from Washington -- If the fight to end the economic crisis is a war, the stock market's continuing dive, deepening troubles in the global economy and recent developments at home show that the enemy still has the upper hand -- and we're going to need reinforcements. Maybe massive reinforcements.

That could be a tough sell in Washington, where the rapidly increasing price tag is leading many Republicans and some conservative Democrats to adopt an old battle cry: Hell no, we won't go.

Yet the alternative to additional federal spending on a huge scale could be that the present crisis could not only worsen but continue, not for months or a couple of years but for a decade or more -- as an eerily similar financial system crash did in Japan during the 1990s.

"You could have a 'lost decade' just like Japan did," said Simon Johnson, an economist at the Massachusetts Institute of Technology and former chief economist at the International Monetary Fund. "Anybody who says it's not possible isn't paying attention."

If anyone doubts that America is headed for disaster, they need only read those four short paragraphs above. Because the reality is that the writer is proposing we do just exactly what the Japanese did, throw money at the problem. He argues that because it is such a huge crisis, his solution to avoid what happened to the Japanese is to ... do exactly what they did. Is that insane?

If the old story about the man who kept complaining about his headache all the while ramming his head into a wall ever had any timeliness, now is the time. If anyone doubts that Liberals and Conservatives will never be able to communicate, the logic of this writer, and Barack Obama and all of his socialist friends, will put that to bed forever. Unfortunately after 40 years of socialist propaganda in our schools, too many people are willing to buy the insane logic of the writer ... which is an echo of Obama and the Democrats proposals.

Want to join me in my absolute dread of the future of our nation under socialism? Take a look at the following graph.




America has enjoyed the greatest standard of living and greatest freedom of any nation because we have sought a reasonable compromise in the size of government. The graph above shows both sides the reality of the compromise that has worked so well. The size of government as a % of GDP has always stayed between 18% during periods when Republican-conservatives are in control and below 21% when Democrat-liberals are in control.

I think that the practical advantages of the balance are a recognition of both problems that our two political parties complain about; the abuse of too much government control and the unreasonable concentration of power and wealth that occurs when pure capitalism leads to monopolies. Practical Americans have found a great balance. I guess I should change that to "had" found a great balance.

At this point in our nation's history, the majority of the people have decided to abandon that compromise and dramatically increase government to a size never seen before in our nation. They did that when they voted for an Alinsky disciple. Voters have decided that we will become a socialist state at the federal level, and to hell with free enterprise. The size of government is spiking up and headed towards the 40-50% of the truly horrible socialist nations of the world, like Russia. Socialist tyranny will follow as surely as the night follows day.

The consequences of that befuddled decision by our people will be disastrous. For a start, the traditional low level of unemployment will become the horrible double digit rates normally experienced in other socialist states. The experience of European socialist states suggest that normal unemployment under socialism will be nearly double the traditional unemployment of America. In recent history we have never seen that level except as a spike during one bad period.




As can be seen from the graph above, only during the sustained push for socialism of the late sixties and seventies did we start to see the double digit unemployment rates that Europe tolerates as a norm. Why would America want to see such an intolerable condition become the norm? Are voters perhaps deluded that socialism will not be as bad here as it is everywhere else?



At no time during the two recent economic booms of our nation, from 1950 until 1965 and from 1983 until 2000, did we have any period of sustained economic distress. Recessions were always short and self correcting in our nation's great free enterprise system. In 1982 the recession was worse than today and we came out of that one by using the tools that are known to work in a free enterprise economy. Only when you try and defeat free enterprise, as Liberals always want, do the long term depressions occur. FDR and Johnson-Nixon-Carter have already proved that throwing money at the problem is the absolute worst solution. We should not try that delusion again, and yet that is what Obama and the Democrats are committed to.

What is frightening is that we are currently at war with a powerful movement that seeks our destruction, Islamo-fascism. The last thing our nation needs to do at this point is stupidly try a failed economic system proposed by people who do not believe that our enemies are real. If this "stimulus" is just the first chapter, America is headed for some truly bad times.