As President Barack Obama begins his second term, democratically returned to office by a majority of Americans who seem to buy what he is selling, it would profit us to pause a moment and examine the discrepancies between the vision he expounded in his inaugural address and the economic reality that surrounds us. This leads to a pivotal question: What, exactly, is the underlying purpose of Obamanomics, and how would we know?
Logic offers two choices. We can take the president at his word, and then ask why the promised economic recovery, growth, prosperity, and equality, haven’t arrived yet. Or we can ascribe darker motives to the policies that have brought our country to the brink of ruin. That raises the horrifying possibility—unlikely as it might sound—that precipitating an existential crisis in order to bring about radical change has been Obama’s underlying agenda all along.
If we take the high road and accept Obama at his word, as most Americans have, we are led to three alternatives. The first is that the Keynesian nostrums applied to goose the economy—bailouts, stimulus spending, money printing, artificial suppression of interest rates, government “investments” in all manner of money-losing schemes, and a rapid expansion of the welfare state, all with the goal of increasing “aggregate demand”—are working fine. All we need is to give Washington a bit more time, a little more spending leeway, and a few more tax dollars extracted from those who can most afford it, and all will be well.
The second possibility is that the president’s macroeconomic policies are not working because they are too modest. Therefore, we must let Washington double down and play an even larger role in the economy, or all will be lost. Notables such as The New York Times’ Paul Krugman imply that this is the only way to restore prosperity, and that the one thing holding us back is stingy Republican recalcitrance.
The third possibility is that, noble intentions aside, the Keynesian plan is not working, cannot work, never has worked, and never will work. This implies we need to change course if we want to revive our struggling economy and restore our government to solvency.
Read More at forbes.com . By Bill Frezza.