Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
How Economic Recovery Is Being Sabotaged By Bad Economic Policies
President’s economic advisors want to spend more trillions to stimulate the economy. They are joined by a large number of Keynesian economists. The huge federal budget deficits of 2009 and 2010 of over $1.5 trillion each, and the President’s $800 billion dollar economic stimulus plan of 2009 – 2011, as we pointed out in this site several times, was poorly designed to stimulate investment in the private sector, a sine qua non for a growing industrial economy. The trillions spent by the federal government must be considered an utter waste of precious resources. Very little of it was de gned to stimulate the demand for new housing or stimulate other private investment. The hundreds of billions spent on subsidizing activities intended to reduce carbon emissions was totally wasted.
Business reluctance to invest in housing is understandable with so many millions of houses awaiting foreclosure and so many mortgages in default. There is thus a surplus of houses, which will take years to work off. The government has made housing into an unattractive investment. As we have indicated on this site more than once, Democrats wanted to make it easy for unqualified households to purchase homes and Republicans supported the policy because home-owners are more likely to be conservative and vote Republican.
It is not hard to explain the reluctance of American businesses to invest in the U.S. while they continue to invest huge sums abroad. The answer is that they can produce their products much cheaper abroad and they can import the products they produce abroad free of duties. Both parties are committed to the false doctrine of “free trade”.
Comment by lymangrigsby, 8/30/2011:
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Comment by Cary Henderson, 8/32/2011:
Please join our Facebook group FairTax 2012. We could use some input from economists. We are a group dedicated to promoting the FairTax.
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