Another month goes by and once again the official unemployment rate stays above 9; number which four years ago would have seemed a nightmare is now lauded by the White House.
The federal solution to a problem that, to many economists (and millions of Americans) feels like a depression, is to spend more. To spend more on clean energy. To spend more on tax breaks for nanotechnology. To spend more on subsidized research for biotech. This is in addition to the hundreds of billions already dumped into saving dead companies. From Freddie and Fannie to Goldman and Citi, the USG's function as the lender of last resort had kept enterprises on life support which should have been killed off to make room for more efficient, better companies.
The end result is not just a collection of walking dead corporations, but an even more severely bankrupt federal government than before.
Finally though, we are hearing of spending cuts from the White House and many Republicans in Congress. But none of the proposed cuts, save Senator Rand Paul's proposal in the Senate, are even close to making an appreciable dent in the budget deficit and the underlying federal debt.
It is time, at the minimum, for the feds to admit that their efforts at creating jobs are not working.
Certainly some jobs have been created. The federal government continues to grow. Federal contractors are doing well. And the parts of the private sector which receive these infusions of cash increase hiring (sometimes). But if creating the wealth which fosters hiring were as simply as printing money and handing it out, Zimbabwe would be awash in millionaires (well, it is, only their millions are worth nothing).
The only way to create sustainable job growth is to downsize the federal government and assure the global marketplace that the USG is solvent. After this stability has been demonstrated by a decreasing federal debt, the feds need to start decreasing the federal tax burden on all Americans, which limits investment and growth (start with cutting government, and then the loss of revenues from lower taxes will be more palatable).
There is, I suppose, the chance that federal investment in one of these industries might turn things around. Obama recently called for an increased USG commitment to space technology. I suppose if this effort results in some advance which allows us to, say, harness the energy of solar winds in an efficient and useful manner, than maybe the return on investment would be worth it. But I would not bet on it. I would not because the White House is just guessing.
Businesses act rationally to select the best investment opportunities available. Politicians do what they think looks best. Centralized economic planning does not work, unless by chance.
Sensible libertarian views on nearly everything- except foreign affairs.