This attempt at breaking down the stimulus from the beginning to the end will not be an easy undertaking, since I am not economist. However, neither is President Obama, he is a lawyer. Nevertheless, there is ample information from sound sources to help the average tax payer understand exactly what the government is asking of them and the other possibilities for economic stimulus. This first addition is a challenge to the government’s claim that we are in the worst economic downturn since the Great Depression. Also, this will show how they are propagating fear in order to push their agenda onto the American people.
As far as this blog is concerned, free markets and economics are inexorably connected to the liberty and prosperity of every individual American. This is not to say humankind is free due to capitalism, just that if used properly, it can be the engine of that freedom. Mankind is unarguably born with certain unalienable rights that are derived from Higher, not from monetary, fiscal, or economic policy.
However, despots, tyrants, dictators, and megalomaniacs have learned throughout the years that by manipulating these economic systems they can attain a greater accumulation of power over their citizenry. Infringing on, if not taking away these freedoms, all in the name of the State. Thereby, creating an atmosphere of dependency on the government for even the most basic daily needs.
Even as far back as October, then Senator Obama, was stirring fears that this was the greatest economic downfall since the Great Depression. Recently, even his toadies and acolytes have been echoing the same sentiments. All for the sake of spreading fear and generating hopes that they have the only answers to end this crisis.
Now, only a fool would say, with a straight face, we aren’t in hard times and things aren’t going to get harder. But the egregious claims and fear mongering of the Obama administration fall apart once you look at history.
According to the Bureau of Labor, from 1930-41 the unemployment rate never dropped below 8.9% and actually went as high as 24.9%. When the recession deepened in circa 1981-82, unemployment sat at well over 10%.
As far as GDP, from 1929-1933 there was a major constriction, to put it mildly. The GDP output of the United States in 1929 was $865.2 billion and in 1933 it sat at $635.3 billion, this represents a -29.3% decline in the gross domestic product of the US in a 4 year period. It was not until 1936 when the GDP reached $866.6 billion, did the economy finally overcome the 1929 tally. This represents real growth of only $1.4 billion over a 7 year period. Furthermore, this still does not address the rampant inflation or unemployment most Americans still faced.
In 1981 the GDP sat at $5,291.7 trillion, then in 1982 after a major contraction brought on by the recession it was lowered to $5,189.3 trillion, meaning a decline of -1.9%.
Looking at the breakdown of each quarter in FY 2008 you gain a comparison between them and the previous recessions. In FY 2008 we had 1st quarter growth of .9% (Final Report), 2nd quarter growth was 2.8% (Final Report), the 3rd quarter sat at -.03% (Preliminary Report), and finally 4th quarter results were a -3.8% loss (Advanced Report). Totaling up the BEA’s quarterly reports for FY 2008 results in a net loss of -1.3%. The recession of 1981-82 still sets higher in losses by +.6% and there is no contest between the losses that were incurred during the Great Depression years which totaled -29.3%. The best year for declines in GDP, during this time, was actually 1933, when there was a loss, ironically, of -1.3%.
How interesting that once you crunch the numbers you see quite a different picture than what the administration is selling. Quite simply, they are misrepresenting the facts in order to perpetuate fear and panic to gain public support for their expensive and expansive government project. Again this is not to say things are not bad or they will not get worse, this is simply where we are at right now. We have one recession, 27 years ago which was actually worse, yet no one was running around talking about spending our way into oblivion. Quite to the contrary, then President Reagan used tax cuts to stimulate the economy. He brought about huge gains for the American people by creating 20 million new quality jobs under his administration, ushering an era of prosperity and hope that lasted for a little over 15 years.
Please note, the figures presented here are from the Bureau of Labor Statistics and the Bureau of Economic Analysis. Read them for yourself, don’t take my word for it.