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Warning that won't be heard ...
January 30, 2009 - Lee Smith
I have the distinct impression that I'm shouting into hurricane-force winds, but here goes anyway: There is no need for the federal government to get involved in "saving" the economy. Especially with massive government spending. While tax cuts for businesses and individuals would have a short- and long-term stimulative effect, the bill Congress is considering is laden with pork projects that will not give the overall economy a boost.
More importantly is the premise that government should be involved. The United States experienced many economic depressions during its first 110 years of existence. These involved overspeculation in lands, or commodities, or stocks, or whatever. The corrective downturns that followed lasted a few years, but were then followed by economic growth. They even came up with a name for this: The business cycle.
This ended in the 1930s with the economic tinkering under the New Deal. What was the result? The longest economic depression in American history. Yet many still want the government to "do something" when the economy sours. Massive spending is exactly the wrong prescription.
In the 1970s, the United States experienced "stagflation," because it implemented a massive spending program that ate up the capital needed to get the private economy going again. It is simply impossible for government to spend us into prosperity. We need government to get out of the way. Period.
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