Monday, June 8, 2009
It looks like even leftist media outlets are starting to echo truth about the stimulus. In my post on 6/4/09, I argued that the Obama administration and Obama's stimulus plan were having a negative effect on the economy. My points were that the stimulus was causing savings instead of spending and the administration had lost as many jobs as they created. Today, AP has an article about how the stimulus is causing interest rates to increase instead of drop.
Quote the AP article:
“The Federal Reserve announced a $1.2 trillion plan three months ago designed to push down mortgage rates and breathe life into the housing market.
But this and other big government spending programs are turning out to have the opposite effect. Rates for mortgages and U.S. Treasury debt are now marching higher as nervous bond investors fret about a resurgence of inflation.”
The article quickly comes to the conclusion:
“That's the Catch-22 threatening to make an awful housing market potentially worse and keep the economy stuck in a funk. Kick-starting the economy requires higher spending, but rising rates mean fewer Americans will be able to refinance their home loans. And some potential buyers will be shut out of the market by higher monthly payments they won't be able to afford.”
What does this mean? It means that any gains in the housing market made by the $1 trillion in TARP spending may be erased by Obama’s policies causing the bank's liquidity problem to become more serious.
All this planned spending is negatively affecting the fundamentals of our economy. Obama’s solution? He wants to spend more of the stimulus, faster and ensure the passing of his health care. Great plan Mr. President, do more of what is causing this new economic problem, faster, while trying to create bigger spending. That ought to help.
The pace at which the media is waking up to the disaster that is Obama’s economic policies is causing is a little surprising. However, don’t expect the NY Times to start covering the truth behind Obamanomics, they had a puff piece out today about how fighting amidst the Obama economic advisors adds to the value of the group and allows the President a diversity of opinions. I’m fairly certain that had Obama’s team been in complete agreement over the new economic developments, we’d have a piece trumpeting how Obama’s unified, cohesive group of economic advisors proves that Obama is going in the right direction on the economy.
Meanwhile, the article misses the point that these advisors were all in agreement over the economics of the stimulus. It was the method of spending the stimulus that they argued over. It also fails to mention that the President doesn’t understand anything about the economy and wouldn’t know what the right economic solution if it bit him. All he knows is politics and that’s evident by his handling of the auto companies.