Obama: We’ll spend our way out of downturn, the rest of us should look out!

Barack Obama just doesn’t get it. The previous economic stimuli that he and his cronies in Washington have foisted upon us as the chart below shows:

Despite the fact that the unemployment rate has now gone back down to 10 percent, Obama’s worst case scenario (no stimulus) would have resulted in the unemployment rate rising to no greater than 9 percent.

According to this article,

A major part of his package is new incentives for small businesses, which account for two-thirds of the nation’s work force. He proposed a new tax cut for small businesses that hire in 2010 and an elimination for one year of the capital gains tax on profits from small-business investments.

Obama also proposed an elimination of fees on loans to small businesses, coupled with federal guarantees of those loans through the end of next year.

He called for more government spending on infrastructure projects such as roads, bridges and water projects and for new tax breaks for consumers who invest in energy-efficient retrofits in their homes. This could be what some administration officials have called a “Cash for Caulkers” program modeled on the now-expired Cash for Clunkers program of tax rebates for people who turned in old cars for more fuel-efficient models.

While the tax cuts may not be actively harmful as the new spending is, Obama (and the rest of our political leaders) need to understand that government spending is the problem, not the solution, and that economic stimuli are ineffective when compared with low taxes and reasonable regulations. Unfortunately, no one is following this prescription, so the national debt will continue to grow, thus creating real problems for the US economy.