Home > Uncategorized > America’s Lost Decade? Here we come!

America’s Lost Decade? Here we come!

With the stimulus bill, oh so cleverly called “American Recovery and Reinvestment Act of 2009”, ready for a vote on Friday, are we standing on the verge of economic recovery or are we heading for a train wreck that is reminiscent of Japan’s “Lost Decade?” While I pray it is the former, I have a feeling it will be the latter.

The following is from an article that has a great analysis of Japan’s economic woes of the 1990’s and I think summarizes things very effectively:

“Japan’s large fiscal stimulus packages, which became legendary during the 1990s, were ineffective for several reasons. First of all, the packages were not as large as advertised, often inflated by double counting as stimulus government programs that were already slated to be undertaken. More importantly, the packages were poorly directed–largely toward unproductive public works projects and credits to small businesses that were no longer economically viable. It would have been far better to have reduced tax rates and allowed households to employ the increase in disposable incomes as they saw fit.”

Now, back to the stimulus plan that has been touted as the only solution to this crisis by the white house. Obama’s assertion that this stimulus bill creates jobs is absurd. This bill does not create jobs and even more importantly government does not create jobs. This is going to create work, plain and simple. I have not seen or heard this in the media at all, what a surprise. The distinction between work and jobs is this. A job is something that is sustainable due to a demand for the product or service that a business produces and work is something that is finite and is generated not because there is a demand for something, but rather because some feels there is a necessity for it. The first question that the media should of asked is, “How in the world does giving money to create more government bureaucracy going to create jobs?” The second question requires a leap of faith and assumes that by giving billions to more government is going to stimulate the economy and create jobs, and is, “What happens when the money for these ‘jobs’ runs out?”

I guess we can no longer rely on our media to keep a watchful eye on the government and it will be up to us. I would encourage all of you to write to you congressmen and senators and let them know that this is the wrong course of action. You can’t lose, especially with history on your side.

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