More evidence that Obama and his Administration are Incompetent
I have always been of the opinion that the free market economy is, generally speaking, a very simple animal. The economy grows when people spend money; it shrinks when they don’t. That being said, I’m not going to lie, some parts of this article were over my head, but I get the gist. And the gist is that continued deficit spending is tantamount to economic suicide.
In a recent speech, President Obama’s top economic advisor Larry Summers acknowledged the dangers of continued spending, as evidenced by the current European debt crisis. Incredibly, he then went on to push for a second stimulus, and in doing so, tacitly admitted the failure of the first stimulus. Professor Tim Congdon of International Monetary Research put a more frightening face on the current state of the Obama fiscal policy,
[T]he Obama policy risks repeating the strategic errors of Japan, which pushed debt to dangerously high levels with one fiscal boost after another during its Lost Decade, instead of resorting to full-blown “Friedmanite” monetary stimulus.
“Fiscal policy does not work. The US has just tried the biggest fiscal experiment in history and it has failed. What matters is the quantity of money and in extremis that can be increased easily by quantititave easing. If the Fed doesn’t act, a double-dip recession is a virtual certainty,” he said.