Hoping to get his economic stimulus plan passed, President Obama has warned Americans that “If we don’t move swiftly to put this plan in motion, our economic crisis could become a national catastrophe.” Translated, bread lines are in our future absent help from Washington.The problem here is that what Obama assumes is a logical impossibility. Economies, despite protests otherwise from economic thinkers on both sides of the political spectrum, never recess on their own. More realistically, if left alone, economies can only grow. That is the case because productive work effort is what constitutes economic growth, and given the human need for food and shelter, people will always work in order to insure the existence of both.
But since Obama is stridently of the view that the world’s richest and most innovative economy can’t grow without federal assistance, a thought experiment is in order. What if Congress and the Obama administration took a six-month vacation and simply did nothing?...
So President Obama says we face catastrophe absent help from Washington? Far from it. Economies once again never fall into recession; instead they are pushed into slowdowns by governments that create wedges between work and reward. In short, the single best tonic for our economy is not tax cuts or tax increases, not housing or unemployment subsidies, not heavy spending or China jawboning, but a far humbler Washington that simply does nothing. Left alone, there’s nothing individuals working free of government oversight can’t achieve. The answer to our economic ills is for Washington to simply leave us alone.
John Tamny, the editor of RealClearMarkets and a senior economist with H.C. Wainwright Economics, has more specific comments on the "stimulus" bill in this well-argued article. Check it out.
