Re: Canadian Prime Minister Warns of Second Depression

[Guest guest]

We are also seeing a repeat of some Depression Era programs that were later proven to have increased the severity and length of the Depression. Obama has promised to create 2.5 million jobs by 2011. The only way he can do that is to create them with government spending, which will mean either higher taxes, more debt, or both. These jobs will require tax money as long as they are to be maintained. This is problematic because it requires the government spending to be financed for as long as the program. Another problem is that the people in these programs have little incentive to actually work hard and they think the jobs are forever.

What happened with FDR was that the make work programs were very costly, soaked up lots of government spending and caused debt and high taxes. Those high taxes stifled the real economic recovery. A few decent things were created, like Hoover Dam, but that won't be the case this time around. We aren't going to be making anything productive. At best we will make good some of the maintenance that the politicians have been putting off for decades to build new roads for their developer buddies. Some new roads might be built, but that will be pointless as well since they will be roads to nowhere but more urban sprawl and shopping that no one will be able to afford.

If they want road work done, there are many private companies that could get it done very quickly if all the bureaucratic red tape was cut. They might even hire a few more people.

But if they really want to help the economy, they need to do like FDR: Kick the Maynard Keynes morons the to curb, forget about the "priming the pump" nonsense, and cut taxes and rein in government spending. FDR himself admitted that they had made mistakes listening to Keynes and going with high taxes and make work programs, that had they taken the path of lower taxes and spending, that the recovery would have come two years earlier.

A lot of people say that military spending for WWII got us out of the Depression. Not so. All that building was financed through taxes and debt. What made the WWII building boom possible was that the economy was already beginning to rebound. Since it was coming back, it would have blossomed anyway, particularly without the war taxes, rationing and other draw downs to growth.

The problem is that when people are worried, and uneducated in even basic finance, throwing out a number like 2.5 million jobs cheers them up. Never mind that if those jobs pay say $20,000 per year, the program will cost $50,000,000,000 in salaries along, and you know they will pay more than that and that supervisors and management will get paid much more. That's not even counting the health insurance costs and the costs of the massive new bureaucracies to run it all.

Of course, people aren't going to be allowed to point this out without a visit from Obama Civilian Security Force.

In a message dated 11/22/2008 6:30:32 P.M. Eastern Standard Time, no_reply writes:

I had him beat:In post 41829 on Mon Sep 22, 2008 4:17 pm, I said:"We can anticipate that as companies continue to buy back shares, those companies which CANNOT afford to do so will continue to see their shares go down in value...and the whole market will reflect this degradation until we have a sell off by investors and a crash not seen since the Great Depression."One site has it all. Your email accounts, your social networks, and the things you love. Try the new AOL.com today!

[Guest guest]

gave a great synopsis of what happened in the 1920's and 30's

and compared it to what is happening now. I think we could all stand to

keep in mind what he has written as they will be of great use to us as

times get worse.

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