
 |
|
May 13, 2013
David G. Savage: Church-state, literally? Supreme Court weighing public school graduation in a church
May 10, 2013
Rabbi Berel Wein: Be all that you should be
May 8, 2013
Peter Ford: Why China is welcoming both Israel's Netanyahu and Palestinians' Abbas
Warren Richey: Obama administration quietly backs out of appeal over new contraceptive mandate
Fred Weir: At Kerry-Putin meeting, US-Russia relations thaw --- a tad
The Kosher Gourmet by Leela Cyd Ross : Almost too pretty to eat, this colorful salad with Sicilian inspiration will tickle the taste buds and delight your visual sensibility
May 6, 2013
May 3, 2013
Kids, kittens the Same? With employee perks at struggling Internet pioneer Yahoo! it's hard to tell
Sandy Kleffman: Artificial kidney offers hope to patients tethered to a dialysis machine
April 29, 2013
Roy Gutman: Poland's new Jewish museum celebrates life, doesn't revisit Holocaust
Mark Clayton: Terrorism in America: Is US missing a chance to learn from failed plots?
Kim Murphy: Boston Bomber's 'Svengali' Revealed
Pete Spotts: Tiny satellites + cellphones = cheaper 'eyes in the sky' for NASA
April 26, 2013
Clifford D. May: Defense in the Age of Jihadist Terrorism
Sharon Palmer, R.D.: How to feel your best -- with plenty of energy, a healthy weight and optimal mental and physical function -- without driving yourself batty
April 24, 2013
|
| |
Jewish World Review
Dec. 10, 2008 / 13 Kislev 5769
Do worry about the deficit
By
John Stossel
| 
|
|
|
|
http://www.JewishWorldReview.com |
President-elect Obama says don't worry about the federal budget deficit.
"The consensus is this: We have to do whatever it takes to get this economy moving again we're going to have to spend money now to stimulate the economy. ... [W]e shouldn't worry about the deficit next year or even the year after; that short term, the most important thing is that we avoid a deepening recession".
It must be music to a politician's ears when a "consensus" tells him not to worry about deficits. He can spend without limit. So Obama talks about a "stimulus package" that he says will rebuild the infrastructure and "green" the energy industry. That won't happen, of course. Government performance consistently falls far short of its goals. Forgive me for again pointing out that President Jimmy Carter's Synthetic Fuels Corporation cost taxpayers at least $19 billion without giving us an alternative to oil and coal.
Obama hasn't put a price tag on his stimulus package yet, but speculation begins at $500 billion, with some people like Paul Krugman, the recent Nobel-prize winner saying that's way too small. "I'm still not sure ... whether the economic team is thinking big enough" .
Krugman is the main cheerleader for a new New Deal, but one done "right" because Franklin D. Roosevelt was too timid: "the truth is that the New Deal wasn't as successful in the short run as it was in the long run. And the reason for FDR's limited short-run success, which almost undid his whole program, was the fact that his economic policies were too cautious."
Krugman echoes John Maynard Keynes's complaint: Roosevelt's budget deficits were too small. Krugman is right about FDR's deficits being relatively small. As University of Arizona economist Price Fishback wrote recently, "Once we take into account the taxation during the 1930s, we can see that the budget deficits of the 1930s and one balanced budget were tiny relative to the size of the problem".
Indeed, the deficits run by Roosevelt were comparable to those run by his predecessor, the allegedly do-nothing, laissez-faire Herbert Hoover. Both administrations spent heavily, but both also raised taxes substantially.
Of course, neither was able to fix the economy. On the contrary, their policies made a depression the Great Depression, extending it many years and even generating a depression within a depression in 1937. As Roosevelt's treasury secretary noted, "After eight years of this administration we have just as much unemployment as when we started".
But Krugman and others suggest that since the New Deal ran moderate deficits and the Depression persisted, then Roosevelt should have run bigger multiyear deficits and so should Obama. "[I]t's basically money we owe to ourselves. ... The best course of action, both for today's workers and for their children, is to do whatever it takes to get this economy on the road to recovery," Krugman wrote.
This is the wrong lesson to learn from the 1930s. The New Deal didn't fail because its deficits were too small. As Amity Shlaes shows in "The Forgotten Man," the New Deal failed because it interfered with the market's natural regenerative processes. By raising taxes, hamstringing producers with arbitrary regulations and creating uncertainly about what the government would do next, business people were unwilling to invest and hire workers.
Uncertainty about taxes, regulation and government policy similarly threaten recovery today.
Obama must realize that government has no wealth of its own and that commandeering scarce resources from the private sector only stifles the economy. Deficit spending does this two ways. When the Treasury borrows money, it outbids private borrowers who would have put the money to productive use. When the Fed creates money, it depreciates the dollar, shifts purchasing power from the people to special interests, and by tampering with the price signals creates an unsustainable recovery that will collapse and throw people out of work when the inflation stops.
The 2009 deficit is projected to be $438 billion. Obama's "stimulus" could take it up to a trillion and beyond. That's just the beginning since the Democratic Congress's spending wish list and Medicare's $35 trillion unfunded liability loom.
We should all worry about the deficit.
Archives
Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.
JUST OUT FROM STOSSEL
Myths, Lies and Downright Stupidity: Get Out the Shovel --- Why Everything You Know Is Wrong
Stossel mines his 20/20 segments for often engaging challenges to conventional wisdom, presenting a series of "myths" and then deploying an investigative journalism shovel to unearth "truth." This results in snappy debunkings of alarmism, witch-hunts, satanic ritual abuse prosecutions and marketing hokum like the irradiated-foods panic, homeopathic medicine and the notion that bottled water beats tap. Stossel's libertarian convictions make him particularly fond of exposes of government waste and regulatory fiascoes. Sales help fund JWR.
|
JWR contributor John Stossel is co-anchor of ABC News' "20/20." To comment, please click here.
© 2008, by JFS Productions, Inc.
Distributed by Creators Syndicate, Inc.
|
|

Arnold Ahlert
Mitch Albom
Jay Ambrose
Michael Barone
Barrywood
Lori Borgman
Stratfor Briefing
Mona Charen
Linda Chavez
Richard Z. Chesnoff
Ann Coulter
Greg Crosby
Larry Elder
Suzanne Fields
Christine Flowers
Frank J. Gaffney
Bernie Goldberg
Jonah Goldberg
Julia Gorin
Jonathan Gurwitz
Paul Greenberg
Argus Hamilton
Victor Davis Hanson
Betsy Hart
Ron Hart
Nat Hentoff
A. Barton Hinkle
Jeff Jacoby
Paul Johnson
Jack Kelly
Ch. Krauthammer
David Limbaugh
Kathryn Lopez
Rich Lowry
Michelle Malkin
Jackie Mason
Ann McFeatters
Dale McFeatters
Dana Milbank
Jeanne Moos
Dick Morris
Jim Mullen
Deroy Murdock
Judge A. Napolitano
Bill O'Reilly
Clarence Page
Kathleen Parker
Star Parker
Dennis Prager
Wesley Pruden
Tom Purcell
Sharon Randall
Robert Robb
Cokie & Steve Roberts
Heather Robinson
Debra J. Saunders
Martin Schram
Greg Schwem
Culture Shlock
David Shribman
Roger Simon
Lenore Skenazy
Michael Smerconish
Thomas Sowell
Ben Stein
Mark Steyn
John Stossel
Cal Thomas
Dan Thomasson
Bob Tyrrell
Diana West
Dave Weinbaum
George Will
Walter Williams
Byron York
ZeitGeist
Mort Zuckerman

Robert Arial
Chuck Asay
Baloo
Lisa Benson
Chip Bok
Dry Bones
John Branch
John Cole
J. D. Crowe
Matt Davies
John Deering
Brian Duffy
Everything's Relative
Mallard Fillmore
Glenn Foden
Jake Fuller
Bob Gorrel
Walt Handelsman
Joe Heller
David Hitch
Jerry Holbert
David Horsey
Lee Judge
Steve Kelley
Jeff Koterba
Dick Locher
Chan Lowe
Jimmy Margulies
Jack Ohman
Michael Ramirez
Rob Rogers
Drew Sheneman
Kevin Siers
Jeff Stahler
Scott Stantis
Danna Summers
Gary Varvel
Kirk Walters
Dan Wasserman

Tech Q&A
Mr. Know-It-All
Ask Doctor K
Richard Lederer
Frugal Living
On Nutrition
Bookmark These
Bruce Williams
|