Thomas Sowell on some popular misconceptions:
The media misconception today is that what we need to speed up economic recovery is to end gridlock in Washington and have bipartisan intervention in the economy. However plausible that may sound, it is contradicted repeatedly by history. Unemployment was never in double digits in any of the 12 months following the stock market crash of 1929. Only after politicians started intervening did unemployment reach double digits - and stay in double digits throughout the 1930s.
There is nothing mysterious about an economy recovering on its own. Employers usually have incentives to employ and workers have incentives to look for jobs. Lenders have incentives to lend and borrowers have incentives to borrow - if politicians do not create needless complications and uncertainties. The Obama administration is in its glory creating complications and uncertainties for business, ranging from runaway regulations to the unknowable future costs of ObamaCare and taxes. Record amounts of idle cash held by businesses and financial institutions are a monument to the counterproductive effects of Barack Obama’s anti-business policies and rhetoric. That idle money could create lots of jobs - net jobs - if politics did not make it risky to invest.
Obama has already laid the foundation for his next four years of Presidency – more green jobs, tackle global warming, raise taxes on the rich and create jobs for the poor. That will come at a hefty price of further government spending. In the first four years of his term Obama increased the Federal Debt by more than 45%; however, with more than $5 trillion spent in promoting everything from solar panels to housing, the economy only grew by 7.1% during the same time frame (or a total of $905 billion.) In other words it took more than $5.60 of debt to create $1 of economic growth... The amount of debt required today to create a single dollar’s worth of GDP today is clearly unsustainable.
Or as Mark Steyn puts it:
In the course of his first term, Obama increased the federal debt by just shy of $6 trillion and in return grew the economy by $905 billion. So, as Lance Roberts at Street Talk Live pointed out, in order to generate every dollar of economic growth the United States had to borrow about five dollars and 60 cents. There’s no one out there on the planet - whether it’s “the rich” or the Chinese - who can afford to carry on bankrolling that rate of return.
Meanwhile, tick, tock.
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