Spending our way to economic prosperity!

Current events are a great way to illustrate the madness that passes for economic and political thought these days. As I've stated before, my blog is not a running commentary on the events of the day, but some events are interesting enough to catch my attention. The most recent being President Elect Barack Obama's as reported by CNN

http://www.cnn.com/2008/POLITICS/12/06/obama.jobs/

Headline Reads: Obama outlines initiative to create 2.5 million jobs

In the text of the article is the important target date "...by 2011". When I read that I tend to think that means than, at midnight 2011-Jan-01 there will be 2.5 million new jobs. We can be gracious and give it all of December 2008, even though he's not in office yet, and that happens to give us 25 months. This means the Obama administration must create 100,000 jobs a month, on average.

This is a very tall order, but it's actually achievable. All the government has to do is hire 100,000 people a month for 25 straight months and, viola, promise achieved.

Never mind that this is likely just another campaign promise. When you spend a great deal of your time creating and reciting lies you get into the habit.

What will the effect of this policy be? I can tell you what it will NOT be. It will not be a economic boom, or even a positive economic effect. It will be a net loss. This is because the government does not add wealth to the economy. It might add money, but that causes inflation which moves the wealth around, but does not create any. Or, it might tax people to pay for these workers, and again that moves the money around, but it does not create wealth. At best it is an economic break even, and when was the last time you saw a chaotic system such as the economy be static at equilibrium? (never)

This policy will ultimately drive the economy down.

The way to create wealth is to get the hell out of the way of businesses. Businesses can't wait to grow! They love to grow! They love to hire people to do more things.

Anyone who understood even basic economics would see the negative effects this policy will have. Barrack is not stupid. He knows this about his own policy. Why does he do it? Because he also knows this will add 2.5 million people who will now look to the government for their next check. He knows it will add dependency. He wants people to need him. He needs people to need him. He's the Santa Clause we all wish existed, and if you want the toys in your stocking all you have to do is whatever he says.

If this policy is any indication of how the Obama administration will govern, then we're in for a terrible economy for the next 4 to 10 years, because he will be unable to stop with just this one bad policy and will do his level best to enact more.