Columnists

We The People… Obama’s Shifty Economics

we-the-people1Issue 31.09

Now President Obama says he never envisioned that his stimulus package would afford quick relief to the American economy, but would do so only after it had run its two-year course.  Earlier Obama sang a different tune, demanding its enactment to speed relief to a sagging economy and to “create or save” 600,000 jobs.  Now, even as the economy loses 450,000 jobs monthly, he pretends that the stimulus will soon kick in.

He justifies the stimulus package by saying it was adopted to prevent the “collapse” of the economy and the banking systems.  But it was really the Troubled Asset Relief Program (TARP), first passed under President Bush, that kept the banks afloat.  At the time of the enactment of the stimulus package, Obama never mentioned it was supposed to save the banks.

But Obama will pay for betting on his stimulus package.  Because of it, the Bush recession is becoming the Obama recession much faster than it would have had he adopted a more gradual approach to solving economic problems.  By jumping in immediately, in order to increase government spending and pass eight years of Democratic dreams in one day, he made the public expect a solution.

Now that the deficit has soared to 12 percent of the gross domestic product, everyone realizes that taxes must go up to pass healthcare “reform,” making its adoption even less likely.  House Ways and Means Committee Chairman Charlie Rangel (D-N.Y.) has passed $550 billion of tax increases, but everyone knows that at least $1 trillion is required.  And, in the current environment, Congress will not vote to add the balance to the deficit, even if Charlie wants to “charge it.”

He has laid a trap for himself.  Just as the economy is coming out of its recession — in 2010 and 2011 — he will face massive inflation.  The money supply has more than tripled since October of as the Fed buys Treasury bills and other securities to “monetize the debt.”  With each new infusion of cash, the problem of avoiding inflation becomes particularly severe.  Obama could well lose the elections of 2012 because of the inflation his deficit has created.

If the recession doesn’t doom Obama to a single term, the inflation will.  And if the inflation doesn’t get him, the subsequent recession will.

He was doomed to lose the game right after he received the first kickoff.

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