The last days of stimulus spending (Obama's belief in interventionism running out of steam)

Financial Post ^ | 09/09/2011 | Terence Corcoran

[SeekAndFind]

The era of oversold economic policy actions — stimulus spending, jobs programs, quantitative easing, infrastructure extravaganzas — may finally be winding down. President Barack Obama’s over-hyped jobs program, after weeks of pre-speech anticipation, landed Thursday night looking like the last gasp of an American economic experiment that’s running out of steam.

Whether the new Obama program will be followed by actual job growth is irrelevant. Economists and political hacks will spend a decade trying to figure out which new job was or was not created by which initiative.

By then, the world will have moved on and the Obama jobs program will be vaguely remembered as the last flap in a global attempt to use government spending based on Keynesian economic theory to generate economic growth. The end is certainly near. The recent slowdown in growth has given rise to constant speculation, in the markets and the media, of new rounds of government fiscal and monetary action to ward off a double-dip and stagnation. That will not happen.

The sense that the stimulus era is over, that it has run its course and may even have been a massive failure, can be seen in the warm-up to Friday’s G7 meeting of finance ministers and central bankers in Marseilles, France.

From Canada’s Jim Flaherty to German Finance Minister Wolfgang Schauble and British Chancellor George Osborne, we get the same message.

“The way this country,” said Mr. Osborne of Britain, “and other countries are going to get growth is not by taking yet another fix of debt-fuelled spending bubble that got us into the mess we are in at the moment.”

The same message came from Mr. Flaherty. “Our view is the G20 commitments made at Toronto to move toward deficit reduction, balanced budgets are essential. We want to stay the course.”

[Scott from the Left Coast]

Good article, Obama's speech, and the program contained in it, landed with the thud of a dead fish on the pier. Smelled like it too.

Within minutes, no one was talking about it. No one, really, is talking about it now...except in the post-mortum sense. An irrelevant speech by an irrelevant politician. Death throes they call that.

[July4]

It doesn't matter, really, that Mr. Obama is wrong about the wisdom of further intervention in the American economy — and he IS wrong. The point is, the United States of America has no more money. We are drowning in debt, and it's going to get worse. Our factories are packing up and leaving. Our unemployed adults are forgetting their skills, and our kids don't see any point in learning any. Companies who have managed to survive are being taxed and regulated to death. It's time for Americans to risk Federal reprisals and proclaim the obvious: “Socialism doesn't work.”

[Gen-X-Dad]

For the last 2 years we have had more of the business-as-usual attitude from the private and public sector that crashed our economy. These sectors have cooperated for close to 2 decades to economically strip mine our industrial base, ship jobs overseas, in source millions of illegal workers, run huge trade deficits to transfer our wealth to other countries, buried us in unsustainable ponzi-scheme debt, and relentlessly punished people who play by the rules while rewarding those who break all the rules. The structural changes required to turn the U.S. titantic around will not be implemented by the very people who championed running us into the ice berg. Now that the average person has lost faith in the concepts of a free and fair market and the rule of law, any attempts to jump start our country will fail until we restore their faith in the system. That will require sweeping the public sector sock puppets out through elections and persecuting the private sector cronies and dismantling their insolvent institutions in an orderly fashion. Until that happens, they will continue to drive this country into the ground.

[lurk]

I drive my daughter 15 minutes to school every morning.

En route, we pass 3 road projects which are completely unnecessary, and could be finished in a week, but magically have gone on for months and months. There are even extra flagmen standing with their stop/slow signs, just 10 feet from each other.

They are the perfect picture of Obamajobs, paid for with stimulus funds. Welcome to the USSA.

[norwaypinesavage]

If you borrow a million dollars, and then spend it like a drunken sailor, you will appear to be prosperous.....until the money runs out. The success in the stimulus lies not in how well it works when there is still money left, it is measured by how well it worked after the money runs out.