FDR 2.0

The “recovery” the Obama administration is so desperately selling this summer does not exist. It is clear now that we’re in the early stages of a double dip recession, and exactly how bad things get depends largely upon the government’s next move.

The standard government answer of “Double down! More spending, more stimulus, damn the torpedoes!” has been thoroughly proven to be the wrong one.

Government has already spent an amount equal to 11% of GDP on stimulus efforts only to realize growth of just 70 cents on the dollar. Despite pumping those Trillions of dollars they confiscated, borrowed, or created out of thin air out into the economy; the money supply is contracting at the fastest rate since the Great Depression. Unemployment could soon be the least of our worries if there’s not enough money circulating to pay those who do have jobs.

But President Obama either out of sheer stupid obstinacy, or from a deliberate act of sabotage, seems determined to become FDR 2.0. Amity Shlaes had a great piece about their similarities in today’s Washington Post. He and Congress are running up the debt trying to bring the economy back to life, while ignoring the fact that they’re choking out the private sector with ridiculous levels of regulation that seem designed more to punish Wall Street that prevent another financial collapse, and massive increases upon taxation coming soon.

We need tax cuts to free up capital, and spur private investment. We need to remove the regulations that have gutted private-market securitization. This bundling of individual loans into bonds is the major source of credit in our economy, it’s down more than 90 percent since 2006, and without it there will be no recovery. What we need is to encourage strong but sustainable economic growth in this country, and that can only come from private sector investment. The money is out there, America’s top 500 financial institutions are sitting on $1.8 Trillion dollars in cash balance reserve that they would love to lend to someone and earn some money. But business is frankly afraid to part with it's money for fear of what they'll be socked with next by this administration, and consumers don’t feel any safer.

We can’t allow the anti prosperity Obama-nomics agenda to continue. Turning the economy over to Democrats has been like trying to fix a leaking boat with a drill. We must remember in November.