While conservative pundits and libertarian commentators have been doing a great job attacking every big government plan lately, they’re slipping on the most important fight of all: the recovery timeline. Whether you think the recession is ending next year or ten years from now, we have to start planning for tomorrow.
After the first few months following the stimulus, every liberal friend of mine had the same mantra. u201CEverything will work. Just give it time. Come on, give him a chance.u201D Well, it’s nearly a year later and things are worse than ever. The dollar has dropped, unemployment has surpassed government estimates, and the only recovery in sight is taking place in other countries. Time’s up.
And, what is the response from Democrat leaders? u201CJust give it time.u201D Or, u201CWe haven’t spent all the stimulus money yet. Just a portion went out.u201D First, let’s tackle this issue. So, this program is supposed to save the economy, right? But, for some reason, the government can’t even get the money out. Am I missing something or does this inherently spell DYSFUNCTIONAL PLAN!
This is just like the backwards healthcare legislation. Consider this, Democrats want to cover everyone. Their plan fails to cover everyone. If your plan fails to achieve its objectives before it is even enacted……then maybe ….just maybe, it’s a BAD PLAN!
Second, before I ever began studying Austrian economics, I had an enthusiastic big government economics professor. Despite disagreeing with her later on, I learned her lessons well. One of the most important was this: government intervention is justified because it is quicker than the natural recovery process of the market. But in the long run, the market will recover by itself.
But, what is the liberal mantra now? u201CGive it time, give it time.u201D Since when has government spending become the u201Cgive it timeu201D option? After all, the Left has criticized markets for decades on slowness to recovery. Stimulus spending theories have always been the domain of the short run not the long run. Who can forget Keynes’s famous quote, u201CIn the long run, we are all deadu201D? Apparently, the Obama administration forgot it.
When the recovery finally does occur, the result will be fairly predictable. Mr. Obama and his nutty advisors will exclaim, u201CAha! Look, we told you to wait and give it time. And now the plan has worked!u201D
This is straight out of the Great Depression playbook. Year after year, the spending programs failed again and again for well over a decade. But, what happened after the economy recovered, u201CAha! Look how well our spending programs worked out!u201D shouted the FDR gang.
A set of key facts needs to be delivered to the public. First, stimulus spending is supposed to work quickly — that’s the whole point. Second, in the long run, the market will always readjust by itself unless truly disastrous interventions take place. And third, long-term growth has never been driven by government spending. In the long run, markets are responsible for prosperity and recovery always.
To make this point more clearly, we need to start steering away from the Great Depression. Yes, the Great Depression is one of our best arguments. But, too many people have been completely brainwashed from early childhood regarding FDR. Even though our facts are amazing and brilliant, it is nonetheless an uphill battle.
A better battleground is any other financial crisis. Your average liberal is absolutely scared to death of discussing anything outside the Great Depression. For one thing, they have not been indoctrinated into a mythical cult-like subscription to other recessions.
Once a conversation on other recessions begins, they have to start thinking about what a recession is rather than what their 7th grade history teacher beat in their heads. Just ask, u201CSo, how many recessions were ended with a trillion dollar stimulus? u201CHow did those other ones end? What about back in the day like the Panic of 1819? Surely, they had a trillion dollar stimulus that ended that one too.u201D
We can’t just attack the current legislation on the Hill. We have to think about the long-term victory. If the recovery timeline is ignored much longer, victory will be lost for the history books even if we managed to stop every other dumb idea passing through Congress.
Vedran Vuk [send him mail] has a bachelor degree of economics from Loyola University of New Orleans, and was a 2006 Summer Fellow at the Mises Institute. He has contributed two chapters to the first-ever Ron Paul biography, Ron Paul: A Life of Ideas. He currently lives and works in the D.C. area.