Keynes was discredited decades ago. Deficit spending fixes exactly nothing. It never has and it never will. It can push a recession over the horizon, but it is like a drug, and you need more and more to keep the problem over the horizon. Eventually the piper is paid. Probably by you, but maybe you can foist it on your kids.

This is what the various bailouts and stimulus packages are costing us so far this year – from reason:

For those too sozzled or bozwozzled to track what we’re spending on on bailouts these days, here’s a quick tally:

# $29 billion for Bear Stearns
# $143.8 billion for AIG (thus far, it keeps growing)
# $100 billion for Fannie Mae
# $100 billion for Freddie Mac
# $700 billion for Wall Street, including Bank of America (Merrill Lynch), Citigroup, JP Morgan (WaMu), Wells Fargo (Wachovia), Morgan Stanley, Goldman Sachs, and a lot more
# $25 billion for The Big Three in Detroit
# $8 billion for IndyMac
# $150 billion stimulus package (from January)
# $50 billion for money market funds
# $138 billion for Lehman Bros. (post bankruptcy) through JP Morgan
# $620 billion for general currency swaps from the Fed
# Rough total: $2,063,800,000,000

That’s a little over $6,800 for every man, woman, and child, or just under $15,000 for each of America’s 140 million taxpayers.

That is before the next stimulus, the next bailout for the auto industry, and whoever is cued up with their hands out behind that. On top of the usual deficit spending. On top of the existing record debt. On top of the unfunded Social Security mandate. And before 1 Trillion dollars of new spending promised by Obama.

I don’t know what you guys are all thinking. This is not pretend money. This is not “government” money. This is real money. Your money. Our money. Money the government we don’t have. Money that we will be borrowing from the Chinese and others to pay back with interest. Money that will ultimately have to be raised from taxes, or the most insidious tax of all – runaway inflation.

But let’s just keep pushing that problem over the horizon where we won’t have to look at it. That way we can all pretend it’s not there. Leave it for our kids and grandkids to solve. But when the piper ultimately does get paid on this one, it’ll make today’s financial crisis look like good times.

Have a nice weekend everybody.

Secoondly we need to do like FDR did in 1934 and raise taxes on the rich, thanks to his intelligent action the GDP grew almost 8% in 1934 and 35 and by 1936 was around 14% growth

Obama and Biden believe that a critical step in restoring fiscal discipline is enforcing pay-as-you-go (PAYGO) budgeting rules which require new spending commitments or tax changes to be paid for by cuts to other programs or new revenue.

It’s good to see we’ve moved beyond to campaign already. Obama has always been a forward-thinker, not weighed down by the ideas of the past, even if the past was one week ago and they were his ideas. (Sorry for the blatant sarcasm).

I sincerely hope that this story is not an accurate reflection of Obama’s intent. I want to give him the benefit of the doubt. I think you can argue that we need to spend even if we don’t have the money, in order to get us out of the recession. However, if you’re going to make promises that you have no intent on keeping, then you are not really any different than any other politician.

On your observation…

“Consider it a more market-driven New Deal that not only tackles unemployment problems, but also touches on the ideas of energy independence and, by default, national security.” – jg

That is nice, but don’t you think we would be better off with a government-controlled laissez-faire economy that not only tackles growth issues, but also touches on the ideas of voluntary service and, by default, puts a chicken in every pot?

I suppose its OK now that a democrat is doing it.