Obama’s stimulus plan reminds me of a teenager planning their first party. He desperately wants to be liked so he invites everyone. Inevitably the people who show up are not the “cool people” he wanted to impress but the trouble makers. Eventually the party gets out of hand and is broken up by the police. Some kids get hauled off to jail.
For the teenager we write off this unfortunate episode as a learning experience on the way to maturity. If an adult tries to throw a party like this, we openly question their wisdom. Most of America has already cut back on their spending habits. The Obama plan is to throw a party with free money to a country who has become very risk adverse. The free money plan did not work on the banks so you have to wonder why Obama thinks it will work with the American people. It sure looks like the American people and businesses are very unlikely to change their austerity plans for 2009 and 2010. If the good folks in America are unwilling to go to Obama’s spending party who do you expect will go to his party? Didn’t we learn anything when Roosevelt tried this type of stimulus plan in the 1930’s ? Didn’t we learn anything when Harding and Reagan used the opposite approach to recessions in the 1920’s and the 1980’s ?