THE FAILURE OF OBAMANOMICS at DickMorris.com
THE FAILURE OF OBAMANOMICS
By Dick Morris And Eileen McGann 06.3.2009
The data is in for April. Here’s what happened:
1. Household personal income (inflation adjusted) rose but every penny – and then some – went into savings or paying down debts. Consumer spending, on which Obama is betting to stimulate the economy, actually fell. None of the stimulus money was sent. None.
2. Meanwhile, to pay for this stimulus spending that didn’t stimulate, Obama had to borrow so much money that long term interest rates have almost doubled since he took office, forcing postponement of abandonment of business expansion and hiring across the board.
What a record!
Here are the details. In April, personal household, inflation-adjusted income rose by $122 billion. Of that increase, one-third or $44 billion came from the government’s stimulus program. But while personal income was rising, household savings (which includes paying down credit card balances, mortgages, student loans, car loans, etc) rose by $132 billion — $10 billion more than the rise in income. So personal consumption dropped 0.1%.
The stimulus package was a total and complete failure. As predicted, as happened with Bush’s 2008 tax cut, as happened with the Japanese stimulus packages of the 90s, fearful consumers sat on their money and wouldn’t spend it. Keynesian economics didn’t work. Again.
