I understand this is post is more about the candidates, but I thought I’d offer a little bit of a detour to show the extent to which ordinary Americans were duped.

We were told that the $800B stimulus package would create or save 3M jobs and/or with it the unemployment rate would not exceed 8.5%. Obama and his cohorts knowingly made false statements about the Federal Reserve becoming impotent when interest rates hit zero, and that fiscal policy was the only thing left to stimulate the economy as a justification for the massive spending.

The fact is that the customary tool used by the Fed to adjust monetary policy, interest rate setting, had become impotent at the zero bound. Obviously, when the Federal funds rate is at or near zero, it can no longer be an effective easing tool but that does NOT mean the Fed is out of ammunition. There are plenty of other things to target besides interest rates at the zero bound to ensure that the supply/demand for money is balanced and the economy is not becoming either strangled or overinflated. The Fed has always had an assortment of other tools in the shed to deal with falling NGDP, disinflation/deflation and the devastating macroeconomic effects it brings.

So just how bad did they LIE? Well, if one considers the stimulus package, all of the miscellaneous intended stimulus bills that were renamed to something else, like jobs bills, and unemployment extensions, and the $450B omnibus bill of 2009, it equals upwards of $2T (not counting TARP or Fannie and Freddie debt), the majority of which was simply added on to the public debt. It is as almost as much as what was spent on the war on terror, including the wars in Iraq and Afghanistan, hence doubling of the debt in less than a month in office. The congress and executive were intent to do the job that the Fed is supposed to do, and it was all completely unnecessary.

Why they LIED: If the Fed were to use its other macroeconomic management tools to deal with disinflation/deflation, the effects would be nonspecific and raise all boats – everyone would benefit. But, if the government were to pass out the money, it can be directed to persons/groups it deems worthy while everyone else if left to fend for themselves. The same is true with the ‘tax cuts for everyone’ approach, which they hate because they cannot reward the dancing bears and enjoy all the power that wielding the wealth of future generations brings. They implement policies that induce suffering somewhere, most everywhere, and the only way to get any relief is to play their game and submit to the One.