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Milton J. Madison - An American Refugee Now Living in China, Where Liberty is Ascending

Federalism, Free Markets and the Liberty To Let One's Mind Wander. I Am Very Worried About the Fate of Liberty in the USA, Where Government is Taking people's Lives ____________________________________________________________________________________________ "Extremism in defense of liberty is no vice. Tolerance in the face of tyranny is no virtue." -Barry Goldwater-

Saturday, February 07, 2009

The Stimulus Porkfest Promises to Lower the Economy....

President Obama's economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.

CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.

CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net.
Here. The new Messiah tried to rush the package through Congress since Americans as they got to know more of what is inside of it, stopped supporting it. Actually, the Obamessiah didn't really have much to do with what went into this bill. He essentially allowed Pelosi, Reid and socialist democrats to dump in every special interest and payback favors that the Democrats need to compensate their supporters for the last several years. This is not a economic stimulus bill but a bill whose principle reason for existence is to stimulate government or create big government. This is government at its absolute worst. This is pure form over substance and actually communicates that government has no solutions and continues to create more problems.

In fact, as I have written, the current crisis has the government finger prints all over it. For decades government has:
1. Crafted tax policy to favor consumption over investment
2. Unsustainably increased entitlements for such programs as Social Security leading people to believe that they do not have to save as much for their later years. This is a gigantic negative savings program since none of the payments in by Americans to this program were never actually saved but went directly into consumption.
3. Used private enterprises such as banks, Freddie Mac and Fannie Mae as surrogates to promote social programs such as home ownership for lower income Americans leading to a misallocation of resources into housing instead of other productive enterprises.
4. Promoted tax policies that are hostile to savings relative to income. Why save if it is going to be taxed away?
5. Maintained amongst the highest taxes on companies in the world lowering competitiveness of American companies and workers relative to foreign. This increases offshore employment relative to onshore for those goods and services both consumed by Americans and those that would have been previously exported.


At 12:11 PM, Anonymous Anonymous said...

Interesting point. I just came across a very helpful website on the current economic downturn http://www.RecessionInfoCenter.com


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