Posted by
Always To The Right on Monday, November 24, 2008 1:59:15 PM
Yesterday, Barack Obama’s surrogates fanned out across the talking-head
shows to promote Barack Obama’s new jobs program. Obama promises to
create 2.5 million jobs in the next two years through government
stimulus packages and heavy reliance on public-works programs. Many,
like the Washington Post, compare his vision to that of FDR — without pointing out that FDR’s programs failed
Lori Mongtomery apparently took pains to use the phrase “in hopes of”. FDR certainly hoped
to alleviate the pain of the Great Depression with his experiment in
federal mobilization of the civilian workforce, but he failed to do
so. FDR spent years pulling capital out of the private sector and
creating civil-service jobs that underproduced and inefficiently
utilized the capital. The end result was a prolonged depression that
only ended when FDR was forced to partner with private enterprise on
the war effort in the 1940s.
The best stimulus package that Congress could offer would be a sharp
reduction in government spending, accompanied by a decrease in tax
rates on investment income — the capital-gains rate. While few will
realize any capital gains in 2008, the commitment to low rates will
signal investors to start putting their resources to work again. Best
of all, it will also signal that the government won’t compete for
projects that could be accomplished by private enterprise — projects
that will get completed more quickly and with better quality than with
heavily-bureaucratized government labor.
With Democratic majorities in both chambers of Congress, though, Obama won’t likely see that
kind of long-term stimulus to the nation’s economy. Instead, Congress
will confiscate more capital to fund its own projects, making recovery
more and more difficult. They’ll expand government spending while
either hiking tax rates, expanding deficit spending, or both. In the
end, that will be as effective as the CCC and the WPA was from
1933-1941. Hopefully, this time it won’t take American voters that
long to reach that conclusion.