The Obama Plan

[texaspackerbacker]

The items you yourself defined as "printing money"--food stamps, government health care (Medicare/Medicaid), and subsidized mortgages even if not all the way to 0%, unless you meant 0% down)--have been going on for more than a generation. Are you honestly going to say these things seriously harmed our economy? I mean, we've all been living pretty well through most of that time period--except when the specter of "paying for it" with tax increases messed things up.

Arguably, we have been just "printing money" ever since we went to having our currency backed by nothing other than government debt instruments--about a half century ago. Has that seriously harmed the economy? I would suggest it removed restrictions to the massive economic growth and progress we have made in that time frame.

Handouts without condition hurt the economy, hurt those receiving them who don't actually need them, but the damage to the economy is only readily apparent when there are growth killing tax or trade (or other) policies along with them. When Reagan and Bush and Kennedy cut taxes and promoted economic growth by supporting business, excessive spending from the government can be overcome. But the train wreck of spending that is coming, coupled with most likely bad business policy will reveal the foolishness of massive debt spending and money printing - especially if deficit spending goes from the historical average of under 3% of GDP to 10% or more.

We seem to be getting a little bit closer to accomodation, but there are still major differences.

We both agree, damage to the economy is "readily apparent" when taxes are raised. I'd be interested in hearing, however, how you can be so sure all this damage that is NOT "readily apparent" has happened. How many consecutive quarters of growth were there once the Reagan cuts got rolling? How well did the economy bounce back from the enormous hit of 9/11? How is it that the bad effects from Kennedy's New Frontier spending didn't become "readily apparent" until LBJ raised taxes?

The net effect of all this "not readily apparent" damage is that from the time I was young--fifties and sixties, the rich are richer, the working and middle classes live a lot better, and the so-called poor now have more than what the working and middle classes had back then. Technology has a lot to do with the improvement, and the magnificence of free enterprise capitalism has worked its magic, but it is undeniable that the government largesse has helped many on the lower end WITHOUT harming those in the middle and upper end.

It really sounds like you are falling back to a position that the recipients of "handouts without condition" are damaged or harmed morally or psychologically by getting something for nothing. Aside from the fact that all evidence is contrary to that assertion, the moral or psychological damage is NOT an economic consequence at all, merely a social one.

I wouldn't be surprised if a bit of an economic train wreck like you speak of is coming. If and when it does happen, though, it won't be because of the spending and deficits. It will be from the tax increases which so far, Obama has, against all of his past history of voting and public statements, not done of requested of Congress. Many of both parties are coming up with the old familiar wrongheaded whine that tax increases will be necessary to "pay for" the spending. If that happens, we're screwed.