Surreal

February 25, 2009

Let me get this straight.

The President of the United States gave a speech in front of Congress and the argument was fiscal responsibility. This same President just borrowed $1.3 trillion, has $420 billion new bill in Congress this week (with 9000 earmarks that will cover the march-september 2009 period); he announced, in said speech, increases in government expenditure regarding education and health care (and probably he intends to do something expensive regarding energy policy too). He has a mortgage plan and a TARP II coming.
Apparently he will cover these new expenses with the repeal of the Bush tax cuts (something that will not even start to cover these monster expenses and will have a negative effect on economic growth in a period of recession) and with the end of the Iraq War (that is, he will cover a permanent increase in government expenditure by cutting another outlay that was temporary in nature).

To put things in perspective, in one month he demanded resources far superior to those that Americans spent on the Iraq War, the Afghanistan War and the Katrina recovery effort in seven years. The Bush tax cuts, that sparked not only economic growth but also outrage among economists who worried about the deficit, were about $300 billion. Were are those economists now? Were are the media that during the previous administration worried about the impending collapse of American economy during to excessive borrowing?

Is this some sort of episode of the Twilight Zone?


Size and scope

February 20, 2009

I think it was Mises who first described the loop involving public failures and government increase in size and scope. In order to fix the problems created by government intervention, politicians usually demand more powers from the people. Recent events confirm it.

Since the government, both as political administration and Federal Reserve, caused the economic and financial mess we are in, the government has to expand with more than a trillion more in debt.