A "New" Stimulus

 Rep. Jesse Jackson, Jr., Democrat, has proposed his own "new" stimulus bill.  It will only cost another $804 Billion, a little less than the nearly One Trillion Dollars spent by Obama, and not even twice the (purported) cost of Obama's latest $450 Billion Dollar stimulus proposal. Jackson, unlike Obama, does not even pretend that his plan is paid for.

Mr. Jackson promises that his plan will bail out all the unemployed, all the cities, and all the states. It's a fairly simple plan: create a civilian conservation corp, or a Works Progress Administration, and employ all unemployed people for $40,000 per year for five years at a cost of about $600 Billion, and bail out the cities and states with about $200 Billion. The cities and states, having been relieved of debt, can go back to spending and borrowing as usual, and presumably stop whining about unfunded mandates since they now owe the feds a big favor. And the people will pay taxes and buy products. Thus, he says, our economy will "work its way out of this protracted recession."

Sound familiar? It should. FDR proposed and implemented these plans following his election in 1933. These plans didn't help the people then, and they won't now. As Henry Morgenthau, FDR's Treasury Secretary said, "I say after eight years of this administration we have just as much unemployment as when we started." After all, how much has Obama's vaunted stimulus reduced unemployment? Not at all; it has been a failure.

Jackson, though, says it's the "only way out of this crisis." He is wrong.  In American business, contractions and even collapses have occurred regularly. Downturns, and even market panics, occurred in 1873, 1893, and 1921. In a short while, they sort themselves out. For example, after the panic of 1893 it required about four years to recover and thrive again. 

In the 1930's, however, the government began intervening in the market. Hoover, who believed that the government could control market behavior, just as Bush (remember TARP?), began meddling with tax rates and massively increasing Federal spending.  None of this worked, and FDR took over in 1933, creating the very same programs Rep. Jackson proposes now.  All these programs did was to drag the people through prolonged poverty, and in the end, dragged the world into a prolonged depression. And in the 1930's, that prolonged depression created the conditions which gave rise to National Socialism, and world war.

Rep. Jackson is wrong. Obama is wrong. The Democrats and Liberals are wrong. Even the Establishment Republicans are wrong.  Government has proven itself totally incapable of preventing the ups and downs which must naturally occur in the business world.  Tying government to the markets does not prevent those natural cycles, but it may drag the government down.  The Russian government tried to control the price and demand cycle, and their economy and their government collapsed. No matter what the politicians or the socialists say, nothing is too big to fail.