CHESSNOID

I blogged about this when President Bush was still officially in office. We already had a stimulus package and a bailout that year under President Bush and a Democratic majority of the House and Senate. It was a failure and did not work.  Simply,  it was a bad idea back then and still a bad idea today.

I wrote this on Dec 21, 2008 but it sounds like I could have written it today as President Obama begins to campaign for more stimulus spending. Is spending the solution to get out of a recession?

Recessions are part of the economic cycle. The economy expands and contracts. It is what happens in a free market. In the last few years, the Bush administration tried to avoid it from happening. We had Bush, Bernanke, and Paulson first deny that we were in a recession and hoped that would work. When they realized they were wrong (and they were wrong big time) they went into panic mode and cut rates and started printing money hoping that would get us out of the downturn. Instead they threw gas on the flames of recession and made it worse.

Obama has been campaigning about how bad it is and how much worse it will become if we don’t do something right now. America’s economy will always expand and contract. Unfortunately, we are in the contraction phase of the cycle. Remember, the bailouts we have spent trillions of dollars were approved Congress which both Obama and Biden were a part of. They want to spend our way out of this recession.

Chicago Tribune:

Obama met privately with top economic advisers Tuesday and received a sobering briefing. Aides cautioned that without an aggressive recovery plan, the economy could lose as many as 4 million jobs through 2011 and the unemployment rate could rise above 9 percent. Unemployment last month reached 6.7 percent, the highest level in 15 years. The last time the jobless rate topped 9 percent was in 1983, during Ronald Reagan’s first term as president. Christina Romer, incoming chairwoman of the Council of Economic Advisers and an expert on the Great Depression, told Obama that forecasts over the short- and long-term had darkened in recent weeks and that looming economic troubles eclipsed anything seen in the last 50 years, transition officials said.

Confronted with that prospect, Obama said the job creation figure he announced in his weekly radio address last month — 2.5 million — would not be enough to avert disaster. He called for creating or preserving an additional 500,000 jobs over the next two years.

Since his election, Obama has heard nothing but dire reports about the economy he’s about to inherit. In November, employers eliminated 533,000 jobs, the most since 1974.

I like the idea of creating jobs, but I don’t think that is what will happen. The fraud bailout of billions of taxpayer dollars was a waste! Is this campaign to spend money really going to create jobs? I want to believe that it will, but I feel like I am giving a sales pitch of something I don’t want to buy.

I have called Bush, Bernanke, and Paulson the 3 stooges of the current economy. I now wonder if we are simply going to replace them with 3 new stooges Obama, Biden, and I am not sure who the 3rd person is yet. Remember, senators Obama and Biden approved the billions of taxpayer dollars for the fraud bailouts and they have failed! The Bush administration thought they could spend our way out of the recession and it sounds like the incoming Obama administration have the same ideas just labeled differently.

Spending is not the solution of getting out of a recession even if you call it creating jobs. When tough times comes knocking on the door, do you start spending more or do you cut back on your spending?