Tuesday, August 31, 2010

Social Security Bait and Switch

I've sometimes noted in this space that BHO is either not too bright, or he lies.  Here is yet more evidence that prompts me to make such an observation.

Any social security plan that isn't based on sound actuarial calculations is a Ponzi scheme.  They put Bernie Madhoff in jail for that, but evidently, a giant Ponzi scheme is just fine for politicians.

Friday, August 27, 2010

We Have Been Down This Road Before

I love the sort of article you will find here.  Evidently, we need constant reminders that we have indeed been down this road before.

When we were doing the last presidential election, I noted to many friends that BHO pretty much had no experience doing much of anything.  Those friends always said, "not important; he will surround himself with people who do."  Yeh, right.  I guess those "surrounding folks" don't know much more economic history than BHO does.  We have been down this road before.

Wednesday, August 25, 2010

Is the Housing Market to Blame for Our Continuing Recession?

In a word, no.  In a recent post, I discussed the real reasons for our continuing recession.  Yesterday's dismal report of the drop in sales of existing homes leads many to believe that "its the housing market, stupid."

But the WSJ article here explains why that really just isn't the case.  All the liberal rags and other mainstream media  that point toward the housing market are using a simple diversionary tactic.  It's the government, stupid, not the housing market.

The housing market will recover precisely when the federal government gets out of the business of fostering massive uncertainty.  Governments cause recessions; housing markets don't.  This is all old ground, of course.  You can read more about it here, and here and here if you haven't already.

Tuesday, August 24, 2010

Why Do We Continue To Languish in the Great Recession?

Here, George Melloan provides an excellent explanation of our enduring recession and elevated unemployment numbers. Mr. Melloan notes,
"In the late 1970s, the last time Americans suffered from manic interventionism from Washington, we had 'stagflation,' a combination of minimal economic growth and double-digit inflation. It wasn't pretty." 
Simply stated, it takes intrusive government to create and sustain a recession.  That's because only an intrusive government (and its sidekick the Fed) can create sufficient uncertainty to cause large numbers of businesses and households to make poor economic decisions all at the same time.  Recessions don't just happen, and they aren't caused by any sort of naturally occurring economic phenomenon.  Since I've explained this proposition at length here, here, and here) no need to write it all again.

The economic recovery will begin and be sustained when and only when businesses and households can see a believable economic future.  Neither businesses nor households can see that future right now.  All they can see is BHO and crew on their relentless march toward ever bigger-government socialism and red ink for the foreseeable and imaginable future.

Please vote carefully in November 2010.  We've got the wrong bus driver (to borrow a favorite metaphor), and he'll be around at least until January 2013.  But we can slow him down in November 2010.  Join the NPB.  Read all about the New Blood Party here.

More Borrowing What Hasn't Yet Been Produced

Here, the WSJ chronicles the massive federal spending explosion since BHO and company took office. And just in case you were wondering, all that spending by the U.S. Treasury will likely come from new money created by the Fed, not from taxes or from the savings of households who choose to buy U.S. Treasury bonds with their saving.

But spending financed with new money is an attempt to borrow what has not yet been produced. As I've noted on more than one occasion, (here, for example) you can't borrow what hasn't yet been produced. Attempting to do so results in an economic mirage.  The latest example was the housing bubble that led to the great recession we are still trying to escape.

The growing red ink generated by BHO and his Democrat controlled Congress will not result in greater production of real goods and services.  And without greater production of real stuff, the unemployment numbers will continue to languish.

BHO's economists know what's going on.  But most of them continue spouting the party line.  All but Christy Romer, BHO's former Chair of the Council of Economic Advisers bailed.  I always knew she is a smart lady.