Eric Morath, of The Wall Street Journal, describes Secretary Treasury Timothy Geithner’s speech this week before the Economic Club of Chicago. Geithner said,
The challenges facing the American economy today…are about the barriers to economic opportunity and economic security for many Americans and the political constraints that now stand in the way of better economic outcomes[.]
So far, so good. But then, Geithner claims that the deficit- and debt-exploding “stimulus” spending this administration and its predecessor inflicted on our economy in 2008 and 2009 helped avoid a much deeper depression. (As an aside, it’s interesting to note that, just as everyone else in this administration who’s made this claim has done, Geithner declined to offer any evidence whatsoever to support his claim.) He also insists that government needs to do yet more to stimulate our economy.
Then he argued, in all seriousness, that cutting spending and taxes won’t stimulate the economy. Here’s the Treasury Secretary insisting that leaving more of our money in our hands to spend—or save—according to our needs isn’t stimulative.
Additionally, here’s that same Treasury Secretary arguing the old, failed Keynesian thought that government spending, of its nature, is stimulative. The thing with government spending, though, is that it crowds out private spending, it doesn’t add to it. With the government buying, there’s less need for individuals or businesses to buy: government will, and give it to us. Look at health care. Look at food stamps (which I pick on due, among other things, to the impact of farm price supports and the government-mandated ethanol program on food prices).
There is no economic or financial case for using the fear of future deficits to cut as deeply into core functions of the government, to weaken the safety net or fundamentally alter Medicare benefits[.]
No, of course not. He’ll just have more money printed up to cover those costs. Never mind that all that inflowing printed currency is just inflation, either today or tomorrow, which will only erode the value of the money coming from that Federal spending—and the value of what money we still have after taxes. The government can print money to keep up with its inflation. We cannot.
No, Mr Geithner, the political constraints challenging our economy today consists entirely of too much Federal government interference in our economy. The most important thing that government needs to do more of right now, to help our economy, to stimulate our economy, is to sit down and put its collective hands in its collective pockets. Do more nothing