Economic Ignorance

Throughout the current economic crisis, we have been subjected to countless outlandish economic theories and statements aimed at justifying government’s continued involvement in economy. These are not the ravings of lunatics camped out in Wall Street parks for weeks on end but of powerful elected officials, powerful government appointees and their economic advisors.

For instance, Nancy Pelosi, the former Speaker of the House and current House Minority Leader said that unemployment benefit checks is a “.”

Tim Carney of the Washington Examiner recently asked  about the impacts on government regulations and mandates on business.  Ellison argued that such mandates are not a cost to business but a stimulus to the economy – after all business will have to hire engineers, designers, manufacturers and don’t forget lawyers to comply with the new mandates.

This past August, Thomas Vilsack, the Secretary of Agriculture, argued that Food Stamps are not Welfare but another form of economic stimulus.  Vilsack argued that “every dollar” spent in Food Stamps “generates $1.84 in the economy in terms of economic activity. If people are able to buy a little more in the grocery store, someone has to stock it, package it, shelve it, process it, ship it. All of those are jobs. It’s the most direct stimulus you can get in the economy during these tough times.”

If Pelosi, Ellison and Vilsack were right, America would be the most prosperous nation on the planet.  But we are not.  We continue to head down the road to bankruptcy. All the bailouts, Federal Reserve monetary policy changes and stimulus programs have failed.  The time has come to recognize that only the free market and private industry can turn the economy around.