For months the nation's economic outlook has steadily worsened.  The housing market collapsed this summer.  Unemployment and underemployment are unchanged from levels 12 months ago despite massive spending purported to manufacture steady labor improvement following September 2009.  Unemployment was supposed to have fallen for 11 consecutive months under the Stimulus Bill, instead it has fallen only 4 times during the past year.





Today Barack Obama unveiled a new $50 billion stimulus program to create jobs by rebuilding the nation's infrastructure.

If Americans are dimwitted enough to allow a new round of deficit-financed, Government spending under the guise of "stimulus" they truly deserve the Japanese-style lost decade under construction over the past two years.

Economic Death by a Thousand Cuts

Stimulus checks in the mail, TARP, HAMP, HOPE, the Stimulus Spending Bill, $2 trillion annual budget deficits, housing tax credits, Cash-for-Clunkers, quantitative easing, open market purchases of mortgage securities, the nationalization of the mortgage industry, bailouts, foreclosure mitigation, 2 years of unemployment benefits, Emergency Education Stimulus, FHA/Fannie/Freddie low down payment mortgages, etc... 

Each was described as being the right program to fix the economy's ailments.  None had a chance of resolving the downturn.  These programs were born from of lack of economic understanding or pursued for political expediency not efficacy.

Stimulus Round XVII

How is it possible that the newly proposed $50 billion in infrastructure rebuilding did not make it into the $862 billion of "shovel-ready" projects authorized in February 2009?  Today there are still hundreds of billions of dollars left to be spent under the Stimulus Bill which will be wasted.  If infrastructure rebuilding is a good idea, why not simply reallocate the yet-to-be spent money from projects which are having no beneficial effect?

Medieval Economic Understanding

The President of the United States does not understand the source of sustainable job creation.  Private sector businesses only hire people when they can do so profitably based on market conditions undistorted by temporary Government stimulus spending or tax rebates.  The more profitable it is to operate private businesses the more jobs are created.  Barack has spent 19 months strangling profitable businesses with increased taxes, higher operating costs and more regulatory burdens.   

The President's proposed solution, "creating or saving" unaffordable, unnecessary and unsustainable Government jobs at the cost of skyrocketing public debt, is a surefire means by which to restrain hiring and economic growth for years to come. 

Dismal Reality

Today 25.7 million Americans celebrated Labor Day unemployed or underemployed.  The President's response to their suffering was more of the policies which created The Great Depression, have plagued the Japanese economy for 20 years, and are intensifying The Affordable Mortgage Depression. 

Given the President's commitment to counter-productive economic initiatives, it is difficult to imagine that Labor Day 2011 will be appreciably better.  Should looming tax hikes be implemented, things may be materially worse.  I hope that by then the nation's underemployed will have lost their tolerance for deficit-financed, Government waste marketed as economic salve.  Such a realization would at least stop the political class from worsening the catastrophe.  But sadly Labor Day 2013 will find far too many Americans unnecessarily unemployed due to incompetent, housing social policy and a misguided response to the economic calamity which it spawned.