In a recent article writer and journalist John Stossel states that “Barack Obama wants to use the recession to remake the U.S. economy.” Citing FDR’s mistakes in the 30′s, Stossel says that such “reform will impede recovery.”
Stossel is right in that Obama is certainly using the economic calamity to push economic redesign legislation whose cost is estimated upwards of $1 trillion over the first two years. Obama wants to redo how our economy works. This includes massive infrastructure projects, various “green” schemes such as “weatherization,” alternative fuel subsidies, “buy American” programs and tariffs to protect domestic industry, and decoupling health care from employment-in other words, transferring health care costs and liabilities from the private sector to the public. What we know about government programs is that estimated costs almost always come in way under actual costs. In the case of this Soviet-style economic redesign, the $1 trillion price tag will likely fall woefully short.
Any money the government spends must be taxed, borrowed or conjured out of thin air by the Federal Reserve, and that will reduce sound private investment. Obama has no real wealth to inject into the economy. He can only move around existing money while inflation robs us of purchasing power. Meanwhile, private investors who might have produced a better engine, battery, computer, cancer treatment or other wealth-creating and life-enhancing innovations hold back for fear that big government will undermine productive efforts.
Americans have been on a path since the Second World War of delegating increasingly more of a our lives to government. We suffer from a disease that will likely prove fatal, in which we place undue confidence in third parties to manage our lives. As Stossel puts it, an “economy really is people engaging in exchanges to achieve their goals. Planning it means planning them.”
This is not American and will not lead to long term prosperity.
