Same Old New Deal

IBD Editorials ^ | March 3, 2009

[Kaslin]

Fiscal Policy: Fidelity Investments' CEO calls President Obama's economic plan "New Deal II" and says it won't work any better than it did for FDR. We fear he may be right on both counts.

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"During the '30s, Congress — with guidance from the president and the same kind of good intentions — shifted the country's cash flow away from productive business to government make-work projects, which most likely prolonged the Great Depression," Fidelity's Ned Johnson said.

In fact, many economists agree that the New Deal was a formula for institutionalizing unemployment, not reducing it.

Seventy-five years later, with unemployment heading to 10%, government has prescribed a similar formula.

"We can only hope that the government's cure doesn't further sicken the patient," Johnson added.

The odds aren't good, though. FDR proved that we can't spend our way back to prosperity, and we certainly can't tax our way back. Yet Obama's long-term budget calls for massive new spending along with $1.4 trillion in net new taxes.

The president's insistence on soaking the rich in a severe downturn is also troubling. He may be dooming us to repeat FDR's mistakes.

Even Roosevelt's loyal Treasury secretary confessed that New Deal policies failed. By 1939, a frustrated Henry Morgenthau had concluded that massive tax-and-spend programs hadn't made a dent in structural unemployment, which was at 20%.

[screaminsunshine]

S&P blows by 700. Free fall from here. Collect all cash and head for hills.

[Perdogg]

Meet the new boss, same as the old boss (carter).

[GeronL]

that cash will either hyperinflate as government burns up the printing presses or deflate...

maybe take canned goods instead

[DOGHEAD]

We were discussing Obama and his plan at dinner tonight. I was able to watch all the Congressional testimony today. One item that was very interesting to me: Congressman John Lewis of Georgia claimed that he actually wrote a lot of the Presidents budget. I began to think about Black Liberation
theology and listened to the Democrats use the phrase “an Economy that is fair for all”. I am begining to see that this budget may not have anything at all to do with helping us get out of this econoomic slump but rather intstitute wealth redristribution that will favor certain classes so as to give the fruits of somone else’s labor. Has anyone compared the budget to Black Liberation
Theology and the teachings of Reverend Wright to see if these items line up?

[screaminsunshine]

Or fight.

[GeronL]

a single individual getting killed by cops here and there will just O look like a hero to the idiot masses