Tuesday, April 20, 2010

The ghosts of Bush’s TARP
President Obama isn’t to blame for falling incomes, but he soon will be

American’s real personal income fell 3.2 percent over the last year. While many conservatives will be pointing their finger at the 44th President, they should first wag it at the 43rd. President Bush began the latest experiment with Keynesian economics—a theory that purports mass government spending will lead to reciprocal private sector spending and boost the economy.

While it is true Mr. Obama signed the stimulus package, the damage was coming long before he put ink to paper.

The lesson of other countries doesn’t seem to daunt modern day politicians. Republicans—traditionally spending hawks—has crossed over into the FDR way of thinking. It was a republican president that signed the Toxic Asset Relief Program and practically every GOP seat-holder supported it. What followed were massive bailouts of corporations that were failing not because of actual market forces, but market forces created by bad paper that was pushed by a congress eager to make homeownership access more accessible to borrowers that would not otherwise qualify.

Just around the corner is more fallout and Mr. Obama will certainly own it. The economy is not improving enough to move out of recession and with the administration’s current spending, taxes will continue to rise and inflation will inevitably set-in; that means less real personal income.

So, the federal government will be taxing its citizens more on less income.

-- Killswitch Politick

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