One of the biggest economic myths since the Great Depression is that governments can ameliorate or counteract the ebbs and flows of free markets. Government spending has never worked as a trigger for sustained and vibrant economic growth. Ever. Scholarship has demonstrated that the New Deal perpetuated the Depression rather than cured it. On the eve of the Depression the U.S. had the lowest unemployment rate among developed nations. But a decade later, despite six years of FDR's New Deal, our unemployment rate was one of the highest among developed economies. Japan's serial stimulus programs over the past two decades have repeatedly underscored this truth.This isn't even in the Lib's playbook, much less likely to happen until the Libs are out of government. But don't say it's all Bush's fault now.The more the government takes as a proportion of the economy, the worse equity markets do and the higher the unemployment rate. The less the government takes from the real economy, the better equities perform and the lower the unemployment rate.
The best stimulus would be to implement personal and business tax rate cuts, a strong and stable dollar and a government nonaggression pact with the private sector--that is, no more attempts at nationalizing health care, gratuitously increasing energy taxes and forcing businesses to unionize.
Obama may be worse than Jimmy Carter, but he's giving FDR a run for our money.
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