An Economics Lesson for The President...

"The definition of insanity is doing the same thing over and over and expecting a different result."
This quote has been attributed to sources as wide and varied as Albert Einstein, Benjamin Franklin, Fred Zamberletti former trainer and current Minnesota Vikings team historian and former New Orleans Saints’ Nose Tackle Tony Elliot.
The quote, "Those who fail to study history are doomed to repeat it" has just as many attributions; Winston Churchill, Santa Ana and Aristotle to name a few.
The Obama administration’s economic policies have not worked in the past and from all appearances are not working now. So why does President Obama believe his stimulus plan and economic policies will revive the U.S. economy?
As early as January 27, 2009, more than two hundred economists argued against the administration and congress’ massive stimulus plan. As time and the debate went on, that number only grew. Apparently economists study history.
Keynesian economics; the practice of putting more dollars into the hands of consumers, should in theory work. When the dollars come from tax cuts, conservative Keynesian economic theory does work. President Kennedy first proposed tax cuts in 1962. Shortly after his death, his proposals were enacted into law and the economy grew. The economy grew after the Reagan tax cuts in the ‘80s and after President George W. Bush’s tax cuts as well.
Keynesian economics don’t work when they take the form of economic stimulus plans such as President Obama’s, President Hoover’s, Franklin Roosevelt’s and the Japanese government’s multiple stimulus efforts in the 90s.
The Obama stimulus plan is compounded by the fact that the President is monetizing much of the debt. Monetizing the debt is when money is printed rather than borrowed to cover the debt. President Obama, in just 38 DAYS, grew the national debt by over ONE TRILLION DOLLARS, an amount that exceeded the EIGHT YEAR total of President George W. Bush’s administration.
The fledgling "recovery" is an illusion. What little growth that has occurred is almost exclusively growth of government. Recent reported growth in income is also almost exclusively an increase in Federal government wages. Earlier this month The Commerce Department reported an uptick in consumer spending. If you read the entire report you’ll learn that the uptick is entirely a product of increased gasoline prices. And finally, the "Real Unemployment Rate", also known as the Bureau of Labor Statistics U-6 is over 17.5%. Real economic growth; sustainable economic growth will only come from the private sector. The President’s policies are not and will not revive the U.S. economy.
The Chinese government both in public and private is lecturing and warning the Obama administration about our government spending and unsustainable national debt. They have a 3,500 year written history. It would seem they not only read their own history, but the history of the West as well. In May of 2009 China held 44% of foreign held U.S. Government debt. If China were to stop buying U.S. Treasuries, the result would be hyper-inflation and interest rates not seen since the days of Jimmy Carter. (The prime interest rate when Jimmy Carter left office in January of 1981 was 20.5%, today it is 3.25%) Maybe we should pay attention.
Currently the Democratic leadership in the Congress is cobbling together a second stimulus package. Apparently Congress neither reads history nor learns from past experiences.
So why does President Obama think his stimulus plan and economic policies will work?
Is the President ignorant of history or so arrogant that he thinks it doesn’t apply to him?