Clearly, time is of the essence, as we face the most pervasive economic dislocation since the Great Depression of the 30s, but Congress has reservations.
You see any way you view the 2008 indexes, benchmarks, and leading indicators; this nation is looking at a financial and economic Armageddon unseen since the years of the Great D. These problems have been building for a generation. Neither solutions nor fixes will come overnight certainly not in even the first few years of his administration. Housing alone is a HUGE albatross for him to deal with. Unsold properties are at a twenty year high. Prices have declined from 8% to almost 40% (depending on the community location) in 2008. Projections for 2009 suggest an additional 10% to 20% on top of that!
- Foreclosures and pre-foreclosures are at an all time record pace (since the Great Depression of the 1930s).
We have already seen that none of the traditional (albeit record in costs) fixes tried in 2008 have worked. The monetary policy (interest rate cuts and a surge in money supply) and fiscal policy (tax incentives and cash back to taxpayers) failed to neither stem nor turn the tsunami.Obama is upping the ante on these by adding trillions more of the same ... he is also resurrecting the Keynesian underpinnings of FDR's New Deal -- when the public cannot be induced to spend, to construct, or to hire; the Federal Government must step up to the plate. Bill Clinton announced that the era of BIG Government was over: well, under Obama BIG Government is back -- and this time with a vengeance!
2008 saw 2.4 million jobs lost and the year ended with an official unemployment rate of 6.7%. When you consider those whose unemployment benefits have lapsed and add those who have given up their search, the percentage is probably double that. 2009 projections suggest another 3 million American jobs will cease and desist.
Candidate Obama talked of creating 1 million then 2 million jobs ... President Elect Obama has already raised the number to 3 million with rumblings of 4 million coming shortly. 20% of these are envisioned for the government sector. 800,000 new government employees is not something that actively inspires me at this point. Add this to the already consummated (or pending) government buy-ins for the bailouts in retail banking, commercial banking, investment banking, insurance (AIG), and the BIG three auto-makers and these fix its are looking (and smelling) a lot like backdoor socialization/nationalization to me.
Keynes revolutionized economics in his The General Theory of Employment, Interest, and Money (1936). His writings, lectures, and theories are postured to become the cookbook for the coming Obama approach.
In the 30s the UK Pound was the world's reserve currency, now it is the US dollar.
But ... will $11 trillion in National Debt plus trillion dollar deficits into the future cook the dollar's goose?