The Obama Administration and Chairman Ben Bernanke’s Federal Reserve have bet on a recovery based on reflating asset prices with easy money, federal spending and temporary stimulus programs. Part of that bet was reflating the housing bubble.
The results are what we now see: higher stock prices for Americans lucky enough to own shares, but 2% growth and mediocre job creation, a housing recession stretching well into its fourth year, and soaring commodity prices that reduce real income growth.
Economics reflects human behavior and actions. When you try to play God with people or economics, it seldom turns out well. Send Obama and Congress home and let the free markets fend for themselves without burdensome taxes and intrusive regulations. Entreprenuers will take it from there.
Reflating? What? L
History shows that the vastly expansive and expensive New Deal by the USA’s federal government in the late 1930s was hardly a mistake for the good of American society. The economy was then reenergized – and the nation’s infrastructure significantly improved – by the shot in the arm of increased demand and consumer spending, which continued even when federal tax rates on incomes climbed progressively far higher than they are today. America grinds to a sorry halt when the priority of government is to serve the minority who are wealthy. This is the lesson of history is that many Americans today seem to have forgotten.
Henry the New Deal had no lasting positive impact on the economy (and very debilitating ones i.e. Social Security). The economy recovered because we sacrificed the lives of 400,000 Americans to win WWII and destroy every other industrialized economy in the world, which made us exporters (like China now) for decades.
That’s right! Blame America!