Obama’s Keynesian Economics

Obama and the Democrats have attempted to save the economy by the application of Keynesian economics, apparently an article of faith among liberals, and part of their drive to redistribute wealth (i.e. steal from those that have wealth). There are many who question whether Keynesian economics can work; many believe that it prolonged the Great Depression when applied by President Franklin D. Roosevelt. Me, I’m not an economist – all I can do is observe what I see from where I sit.

So, from where I sit, if Keynesian economics is what Obama is doing, it seems that it might actually work at stabilizing the economy, although the jury is still out even on that much; unemployment remains far too high, and the bailouts don’t seem to be helping there much; or at least, not improving the situation from it’s present state. For that matter, my personal income has dropped around 20% and has not recovered.

So maybe Obama’s policies are helping a little, and maybe they aren’t. A great many people are still hurting, and this administration is about to raise taxes and introduce many new taxes as well. Regardless of what Obama says about how bad it could have been, there has been a huge net loss of employment.

I’ve seen a lot of talk recently about the potential for a double-dip recession, and as I mentioned, unemployment is still very high. Huge numbers of businesses have gone under, millions have lost their homes; and even if things have somewhat stabilized, those businesses have not come back; and those millions have not gotten their homes back.

There is, however, a major fatal flaw in Obama’s policies. What Obama is trying to do might possibly work – if the government had 15 trillion dollars or so on tap to spend on it and did not need to borrow the money. But that is not the case.

So there are two problems with this approach in terms of money supply; first, we’ve already borrowed huge amounts of dollars to throw at this recession, with mixed results at best; and second – we can’t afford to do it again. The tank is dry, folks.

If there is a double-dip recession, it will very likely stay with us for a very long time; we can’t borrow enough to stave it off; and we are now beyond broke, as a nation. Obama’s strategy is a one-shot deal; it simply won’t work again, because the resources are not available.

If there is a double-dip recession, we are going to be in trouble.


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