Economic recovery: Not happening until Obama admits he has a problem

My latest post on David Horowitz’ Newsreal Blog

Lately the United States and Europe have been big-time party animals, and unchecked counterfeiting, confiscating, and wealth-spreading was their drug of choice. At least until the Europeans woke up with a roaring hangover in a smelly gutter also known as Rock Bottom.

That’s why last week’s G20 summit in Toronto reminded me of the 1962 movie, Days of Wine and Roses, with Europe playing Joe in the final scene, telling his co-dependent alcoholic wife, Kirsten, that he has had enough.

“You remember how it really was? You and me and booze — a threesome. You and I were a couple of drunks on the sea of booze, and the boat sank. I got hold of something that kept me from going under, and I’m not going to let go of it. Not for you. Not for anyone. If you want to grab on, grab on. But there’s just room for you and me — no threesome.”

But just like Kirstin insisted that her miserable alcohol-based problems could only be solved by more booze, President Obama ignores jaundiced indicators and dogmatically contends that his money-printing, wealth-redistributing, debt-tripling bender will eventually save us.

Not only that, but he demanded Europe do the same. Wow. At least Kirstin didn’t try to browbeat Joe off the wagon and into an early alcoholic grave along with her.

Peter Schiff explained the error of Obama’s compulsion to distort the natural forces of the free market with printed, borrowed, and confiscated dollars.

…Economies do not grow because consumers spend; consumers spend because economies grow [for a detailed explanation of how this works, read my latest book: How an Economy Grows]. Investment capital comes from savings, and when governments borrow, savings are diverted from private investment. While it is possible for governments to invest as well, it is much more likely that the money will be spent on entitlements or “invested” in projects that may be politically advantageous but economically useless.

Any money spent by governments is not available to the private sector to invest. The stimulators don’t make this connection because they believe money grows on trees and that a printing press is a legitimate creator of wealth. However, printing money merely encourages people to spend their savings now rather than wait for it to lose value through inflation. This is okay to stimulators, because stimulating “demand” by any means necessary is the only goal they can see.

What will it take for Obama to finally admit he has a problem and seek recovery? Runaway inflation? Devaluation?  Delirium tremens?

Schiff elaborates:

If Greenspan and the Austereians are correct, the stimulus will fail and leave us in a much deeper hole. As long as governments create bigger deficits, we will never have a sustainable recovery. Instead, we will be chasing our tail, and wearing ourselves out in the process. When we finally realize the folly of this approach, the austerity measures that we will then be forced to adopt will make those currently proposed by the Europeans seem relatively painless.

Fasten your seatbelts, folks. It’s going to be a killer rehab after 2012.

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