Enough with the Keynesianism, already

[ImWithStupid]

The Denver Post editorial board isn’t exactly known for its rock-ribbed conservatism, but today, they have joined the small-government bandwagon. The editorial calls for an end to Keynesian interventions that have clearly failed, and instead an effort to “restructure government to something we can afford.” In Colorado, that call may mean trouble for Democrats looking to return to Washington, as their leadership so far is offering nothing more than a double down on the very policies that the Denver Post blasts in it's editorial, today...

 

 

A referendum on the economy

As voters worry about the state and federal economic future, lawmakers should spell out specific plans to move forward.

By The Denver Post

 

New figures that show our nation's economy back on life support ought to be a game- changer for our elected officials and anyone seeking office.

 

Economic growth was revised down to a piddling 1.6 percent in the second quarter, the Commerce Department reported Friday. It's a significant drop from the 3.7 percent growth in the first quarter.

 

Economists expect the third quarter to hardly grow much more, estimating 1.7 percent growth.

 

It looks like the Keynesian theory of infusing massive amounts of government cash into the economy has fizzled. And while many other factors also explain the lack of economic energy, the bottom line is that nearly everyone — from consumers to business owners to government decision-makers — faces tremendous unknowns.

 

Worries about maintaining jobs and salaries stymie consumers. Businesses are holding back money. Economists also say that likely changes to tax laws and new regulatory environments are having a chilling effect.

 

And that uncertainty continues to hobble our consumer-generated economy.

 

The news is dire and the message — we hope — is simple: We need clear-eyed action going forward. Kicking around political footballs when there is a chance the country could slip back into recession cannot be tolerated.

 

"People have been overwhelmed by uncertainty," Ethan Harris, an economist at Bank of America Merrill Lynch, told The Associated Press.

 

Meanwhile, the nearly $1 trillion in federal money spent to shore up battered state and local governments and fund various infrastructure projects is drying up, and attempting another stimulus bill would be political suicide as the national debt tops $13 trillion. The debt has reached a level that's endangering national security.

 

 

 

Read more: A referendum on the economy - The Denver Post http://www.denverpos...s#ixzz0xy1pihgK

 

 

The Keynesian theory has fizzled, indeed — just as it did when tried in the 1930s and again in the 1970s. Government seizure of capital for redistribution makes less efficient use of the capital than the market does, for all of the obvious reasons, and a few less obvious. Among the latter, private capital works more quickly; the Porkulus funds took far too long to have any impact, as critics warned when Congress and Barack Obama demanded almost $800 billion in borrowed money for it.

 

But it’s not just the Keynesianism that is causing the problem, and the Post strongly hints at the issue. Under Obama and a Democrat-controlled Congress, regulation has exploded, much of it ambiguous and arbitrary. ObamaCare is the biggest example; the bill contains numerous references to rules that “the Secretary shall determine,” leaving businesses without any firm path to plan for future expansion. Cap-and-trade and Card Check, which are still sitting on deck, will introduce not just higher costs but even more ambiguities and uncertainties into the mix, and the result will be capital flight, recession, and perhaps worse.

 

This election, the Post concludes, is a referendum on the economy. It should also be a referendum on federal arrogance and executive competence.

 

http://hotair.com/ar...ianism-already/

 

So much for "trickle up economics" AKA "I'm waiting for the unemployed guy down the street to give me a job. Obamanomics"

[hugo]

They forgot to add that investors are finding investment in the US stock market as increasingly risky. My percentage of total assets of domestic stocks in my 401K is at an all time low. I am thinking of increasing it in October hoping for a 1st Tuesday in November boost. Hopefully the Republicans will return to the neo-classical (also called neo-liberal and neo-conservative) economics of Barry Goldwater and reject the Keynesian philosophy that has dominated both parties in the post New Deal era.