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The Bush $100 Billion Hyper-Inflationary Stimulus Package

Economics / Inflation Jan 15, 2008 - 06:52 AM GMT

By: Mike_Whitney

Economics In the next couple of weeks, George Bush will prove that the last 30 years of supply side, free market economics was nothing more than a overripe pile of horse manure. In fact, right now, the B-52s are being loaded with pallets-full of freshly-minted hundred dollar bills which will be air-dropped “from sea to shining sea” as soon as King George gives the nod.


Think I'm crazy?

The Bush “Stimulus Package” is the biggest and most obscene hyper-inflationary swindle ever perpetrated on the American people. It's a $100 billion, taxpayer-funded, bailout that is being slapped together at breakneck-speed to forestall a collapse in consumer spending, an exodus of foreign capital, and a painful slide into recession. And, guess what? Both political parties are on board. It is an act of utter desperation designed to address the catastrophe that was created by the Federal Reserve; the housing meltdown. Greenspan's subprime boondoggle is now in full-crisis mode and threatening to deliver a knockout punch to the global economy. That's why the the lights are blinking red at 1600 Pennsylvania Ave. And, that's why the whole 435 member army of lacquer-haired political jacklegs who run the Congress are racing around in circles trying to find solutions.

They ought to forget about it; go home to their friends and families, stockpile canned food and ammunition, and prepare for the Force 5 fiscal hurricane that's looming just off-shore.

The emergency bailout scheme is spearheaded by Goldman Sach's former head-honcho, Hank Paulson. Paulson warns that the economy is slumping ``rather materially'' and needs massive jolt of capital to keep from sinking altogether.

``We are looking at things that could be done quickly,'' Paulson opined. ``Time is of the essence.''

Paulson sounds more and more like a man on the verge of a nervous breakdown. He's like the deck-hand on the Lusitania who just felt the great ship shudder from the two torpedoes amidships, but continues swabbing away while the ship pitches lazily starboard.

SUMMER'S SNAKE-OIL

Former Treasury Secretary Larry Summers has recommended a “timely, targeted and temporary” tax rebate “of $250 per tax-filer, and $500 per couple for families with taxable income of less than $100,000.” (WSJ) Some variation of Summer's plan will undoubtedly be implemented in the near future. The “invisible hand” of the market---which Bush praises ad nauseum---will be used to steer the Fed's helicopters as they scatter the nation's wealth like confetti “across the fruited plains”. This multi-billion dollar cash giveaway should put to rest, once and for all, the silly notion that Voodoo economics is anything more than a charlatan's parlor-trick. Supply side theory is a chimera which leads inevitably to disaster. Its only proponents are right-wing bunko artists and think tank crazies who have invoked the doctrine at every opportunity and put the economy in the doldrums.

At present, the financial system is so clogged with subprime gunk and other mortgage-backed garbage, the banks can't even provide loans to applicants with good credit. The gears have simply frozen in place. That's why the Fed and the Dept of the Treasury cooked up this wacky scheme to hand-out tens of billions of dollars via tax rebates to low and middle income families. It's the only way they can revive the maxed-out US consumer long enough to get him spending again. The Washington brainiacs who conjured up this latest quick-fix don't see that it will only buy us a few more months of fake prosperity while pushing us further into debt. If Paulson gets his way, the IRS will start cutting checks in a matter of weeks, which will get the cash registers at TJ Max and Target ringing shortly thereafter.

Does anyone in Washington ever worry about the mess that we're leaving for our kids or do they figure that the Chinese will pay for that, too? The National Debt is already $9 trillion, and yet, the politicians are just dying to write another $100,000 billion check on an overdrawn account. It's madness.

There's an old adage that goes like this: "When it seems like things can't go on forever; they usually don't." We're busted. Its time to stop playing Empire and start mopping up the red ink.  

THE SHINING CITY ON A HILL MIGHT BE A POORHOUSE

30 years of Reaganism has destroyed the country. It's eviscerated our industrial base, broken the social contract, crushed our unions, savaged our schools and infrastructure, and shifted the nation's wealth from the middle class to the upper 5%. Now that same multi-headed Hydra is devouring itself. Wages have stagnated, the dollar is nosediving, the banking system is paralyzed, and subprime poison is surging through the global system shuddering banks and businesses around the world. Bush's anemic stimulus package doesn't do anything to reverse this trend. It's like injecting a dying man with a massive dose of meth-amphetamine. It'll only rouse him long enough to know that he is slipping the mortal-coil. What good does that do?

Of course, some people will argue that the $250 government checks are a welcome respite and a verification of “compassionate conservatism”. But how does that square with our 7-year experience of GW Bush?

Is this the same “compassionate” Bush who deliberately withheld food, water and medical supplies from Katrina's disaster victims while they huddled in the stinking, feces-infested Superdome or clung to the roofs of their homes while rescue boats were turned away by FEMA goons?

Yes, it is.

The government largess is not an expression of magnanimity, but despair. The checks are a last-ditch effort to rev-up the moribund economy and see if the ship o' state can be put aright. There's nothing generous about it. Besides, Bush and colleagues are ideologically opposed to giving working people a break; only, this time, they have no choice. The real estate market is crashing, the stock market is headed into ICU, and the country's financial giants are stretched out on a marble slab waiting for the cathedral music to begin. Bush knows he has to act fast or suffer the consequences. That's why he's abandoned his alleged commitment to “free market fundamentalism” and ordered the Fed to put the printing presses on Full Throttle. To hell with principle; it's crunch-time!

What Bush is planning is the moral equivalent of exhuming Milton Friedman from his moldy sepulcher and pounding a wooden stake through his heart. But, then again, honor never mattered much to this crowd. Its all about power and greed.

HOLD HANDS AND JUMP

Albert Einstein summed it all up succinctly 60 years ago in an article titled “Why Socialism?”:

“Nowhere have we really overcome .... "the predatory phase" of human development....The economic anarchy of capitalist society....is the real source of the evil.

Private capital tends to become concentrated in few hands, (creating) an oligarchy with enormous power (that) cannot be effectively checked even by a democratically organized political society....The the real purpose of socialism is precisely to overcome and advance beyond the predatory phase of human development.”

We've done a pretty poor job of reigning in our predators. In fact, the only satisfaction we may derive from the impending disaster is knowing that we'll all be linked together, hand in hand, as the economy rumbles off the cliff.

Email: fergiewhitney@msn.com

Mike is a well respected freelance writer living in Washington state, interested in politics and economics from a libertarian perspective.

Mike Whitney Archive

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Comments

Tim
15 Jan 08, 08:52
Australia's economy

Can you have a look at the Australian situation?


ken chaplin
26 Jan 08, 18:52
stimulus package

At least this 100 billion will be comming back to the people of the united states in person. I am not the 100k or plus money maker that everyone dreams of. Well most of the US anyway. Most people dont live in the dream world the goverment does, i would love to be able to vote in my raise. God forbid we get one every now and then.


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