Obamanomics Is Shovel-Ready; the Failure of Keynesian Economics Is No Laughing Matter, Mr. President

The Washington Times (Washington, DC), June 29, 2011 | Go to article overview

Obamanomics Is Shovel-Ready; the Failure of Keynesian Economics Is No Laughing Matter, Mr. President


Byline: Dr. Milton R. Wolf, SPECIAL TO THE WASHINGTON TIMES

In 1932, President Hoover received a letter from a man in Illinois that read simply, Vote for Roosevelt and make it unanimous. Based on its recent floundering, it seems even the White House recognizes that Obamanomics has been a disaster. It's nearly unanimous now.

When President Reagan entered office, America faced a deep recession with double-digit unemployment and inflation, plus dishearteningly long gas lines. Rather than wasting time blaming his predecessor, the Gipper went right to work unveiling Reaganomics - an embrace of the free market - which included four simple principles: (1) lower tax burden, (2) lower government spending, (3) lower regulatory burden, and (4) a strong dollar monetary policy.

The top income tax rate was reduced from a stifling 70 percent to a low of 28 percent. Total federal spending was reduced from 23.5 percent of gross domestic product to 21.2 percent. Deregulation ended disastrous price controls and curtailed the government's micromanaging of private businesses. Disciplined money supply strengthened the dollar.

As Peter Ferrara, policy adviser to Reagan, has described, the results were beyond spectacular. Reaganomics unleashed an explosive growth of wealth and prosperity, the largest in the history of humankind. Some 20 million jobs were created. Unemployment dropped to 5.3 percent. The gross domestic product growth rate hit a high of 6.8 percent, and the total economy grew by nearly a third. Inflation dropped to 3.2 percent. Even the oil shortage was solved almost overnight.

Barack Obama is no Ronald Reagan.

President Obama entered office peddling the false hope that government can spread the wealth. This is as foolish as bucketing water from one end of a swimming pool to the other. At best you achieve nothing; in reality, the spilled water along the way leaves everybody worse off.

Obamanomics favors top-down compulsory cooperation over voluntary. It is the anti-Reaganomics. Mr. Obama has done the following: (1) raised taxes, (2) unleashed a wild orgy of spending, including his disastrous so-called stimulus, (3) dramatically increased regulations and even nationalized industries and businesses, and (4) printed money out of quantitative easing thin air.

The results were predictable. Since the Obama stimulus - a collection of shovel-ready projects promised to save the economy - was signed into law, America has lost 1.9 million jobs and unemployment has surpassed 9 percent. GDP growth remains anemic. Consumer confidence has tumbled. Gas prices were at $1.81 per gallon before Mr. Obama put his boot on the neck of suppliers, and now it's more than doubled, to $3.81. We burn our food supply in our gas tanks, and grocery prices have skyrocketed - some staples by as much as 40 percent. Since the president signed his mortgage rescue plan, Americans have seen 3.82 million foreclosures. Most disturbingly, the majority of Americans are receiving some type of welfare.

Want to better understand Obamanomics? Look no further than cash for clunkers, Mr. Obama's laughably misguided idea to use American's wealth to, quite literally, destroy American's wealth, to use taxpayers' money to destroy taxpayers' working automobiles.

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Obamanomics Is Shovel-Ready; the Failure of Keynesian Economics Is No Laughing Matter, Mr. President
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