Morning Bell: The Definition of Economic Insanity

Conn Carroll / December 04, 2009

In January 2008, the United States economy employed 138.1 million people and the unemployment rate stood at 4.9%. But the powers in Washington thought deficit spending could boost a slowing economy, so Speaker Nancy Pelosi (D-CA) passed and President George Bush signed a $168 billion economic stimulus bill made up of temporary tax cuts and increased mortgage grantees for Fannie Mae and Freddie Mac. By January 2009 that economic stimulus worked so well that the U.S. economy had lost 3.5 million jobs and the unemployment rate stood at 7.6%. Again the powers in Washington thought deficit spending was the answer, so Speaker Nancy Pelosi and newly minted President Barack Obama dialed up $787 billion in temporary tax cuts and permanent spending increases. Ten months later, the U.S. economy has now shed another 3.59 million jobs and the unemployment rate stand at 10%.

Undeterred by the complete failure of their past job creation efforts, leading leftist luminaries are again calling on the liberal majorities in Congress and President Obama to approve billions more in government spending for a third stimulus. Yesterday, President Obama hosted a “jobs summit” where academics, union leaders, and select big business leaders made their pitch for government largess. Among the ideas reported: Teamsters leader James Hoffa called for higher barriers to trade, President Obama insisted that all future aid to states go to preserving government jobs and not tax cuts, and others pushed to bring the “success” of Cash for Clunkers to a new Cash for Caulkers program. (more…)