Thursday, December 18, 2008

Barack Obama-san

Video added below.

"Obama's stimulus plan makes as much sense as paying my wife and kids to work for me to increase the cash flow in our household." — Pete Martinez, responding to "Barack Obama-san."

In the 1990s, Japan failed to borrow and spend its way to "stimulus". Obama and his administration would save the U.S. of A. prolonged economic agony to avoid Japan's failed example.

From today's WSJ:
"Keynesian "pump-priming" in a recession has often been tried, and as an economic stimulus it is overrated. The money that the government spends has to come from somewhere, which means from the private economy in higher taxes or borrowing. The public works are usually less productive than the foregone private investment.

In the Age of Obama, we seem fated to re-explain these eternal lessons...

Japan's economy grow anemically over that decade (1990s), but as the nearby chart shows, its national debt exploded. Only in this decade, with a monetary reflation and Prime Minister Junichiro Koizumi's decision to privatize state assets and force banks to acknowledge their bad debts, did the economy recover. Yet recent governments have rolled back Mr. Koizumi's reforms and returned to their spending habits. But Japan does have better roads.

Now we're told that a similar spending program -- a new New Deal -- will revive the U.S. economy. How do you say "good luck" in Japanese?"

Please read it all, then forward it to the vaunted Office of the President-Elect.


Here's a great eight minute economics lesson which debunks Keynesian "pump-priming" via bigger government.

TY MM for the video link.

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