Keynesian economics refuted eight times over
Who would know this? In fact, every legislator in Congress and the American president would know this, just no one else. As we all know, the American recovery has been the worst on record, without a single year in the last eight with growth above three percent. This will help you understand why.
Absent of an actual federal budget, all spending falls under a process called base-line budgeting to determine allocation. Federal distribution of the money within the continuing resolution, is essentially a year-over-year expenditure with a statutory increase based on inflation. Essentially, whatever was spent in 2009 was respent in 2010 along with a little bit more. What was spent in 2011 was a little more than ’10, and so forth.
Debt ceiling – failed stimulisIn February 2009 congress passed the American Recovery and Reinvestment Act, or ARRA, commonly referred to as Obama’s stimulus plan. The stimulus was just shy of one trillion ($986 billion +/-).
At the time of passage this single stimulus expenditure reflected a growth of approximately 20% in total federal spending. The spending went directly into the deficit.
Approximately 30% of that “one time” trillion dollar stimulus was spent in 2009, the remaining 70% was spent in 2010. (*note fiscal years run from October 1st to September 3oth annually).
However, absent a federal budget -and because of baseline budgeting- it became a repeated expenditure in each of the following fiscal years.
The $1 Trillion Stimulus was spent eight more times.
Obama and the Congress have been systematically impoverishing the United States. This may be the most disgusting economic story I have ever come across. And for those of us also interested in economic theory and policy, as disgusting as all this is, it is the most complete refutation of public spending as the road to recovery ever found.
Meanwhile, the fool of a president is in Greece advising the Greeks not to pay their debts. The story is titled, GREECE IN FLAMES: Riots in Athens at Obama’s visit as Greeks scream ‘Barack go home’, but this is the bit that goes with the above:
Earlier, Mr Obama, 55, had delighted his Greek hosts by supporting debt relief for the recession-battered country, which has seen its economy shrink by a quarter in just seven years.
Greece hopes Obama will be able to persuade its foreign creditors to restructure some of its debt, which stands at nearly 180 percent of national output. . . .
He said: “We cannot simply look to austerity as a strategy.
“Our argument has always been that when the economy contracted this fast, when unemployment is this high, that there also has to be a growth agenda to go with it and it is very difficult to imagine the kind of growth strategy that’s needed without some debt relief mechanism.”
Everything about him and what he has done is an outrage.