Say Anything Blog

To put that into perspective, American defense spending has averaged 5.5% of GDP over the last 45 years.

NEW YORK (Reuters) - President-elect Barack Obama’s team is considering a plan to boost the recession-hit U.S. economy that could be far larger than previous estimates and might reach $1 trillion over two years, the Wall Street Journal reported on Saturday.

Obama aides, who were considering a half-trillion dollar package two weeks ago, now consider $600 billion over two years “a very low-end estimate,” the newspaper said, citing an unidentified person familiar with the matter.

The final size of the stimulus was expected to be significantly higher, possibly between $700 billion and $1 trillion over that period, it said, given the deteriorating state of the U.S. economy. . . .

The president-elect is likely to be briefed by his aides on the outline of the stimulus plan next week with a view to getting it passed by Congress by the time he is sworn in next month, the Journal said.

Economists have previously said they expect Obama to quickly sign a multi-year spending package that could be worth up to $750 billion, or almost 5 percent of U.S. gross domestic product.

How can anyone think this is a good idea?

What is troubling America’s economy right now is not a lack of government spending (Eisenhower’s investment in infrastructure made an immobile country mobile, Obama’s isn’t likely to do the same thing) but rather a lack of liquidity.  Americans have a lot of debt, and credit pools are drying up, and keeping taxes high to fuel Obama’s massive new spending packages is only going to exacerbate that problem.  What Americans need is to keep more of their own money in their pockets, not see government become an even heavier burden on their lives and paychecks than it already is.

And even if Obama comes out with legitimate tax relief, is blowing up our already exploded national debt really a good idea?

What Obama is promising here is madness.