Democrat debt junkies coming down from their hope-ium high are calling for a second round of trillion dollar deficit spending to numb the nation’s economic pain. This additional injection of credit will not address the systemic issue of excessive spending and will further weaken consumers by extracting more purchasing power from the dollar.
“We really should have a second stimulus, we should have more stuff,” [Paul Krugman] said, dismissing fears of price rises as a result of too much cash in the system.
Keynsian economists such as Krugman truly have no clue whatsoever as to what caused the massive hemorrhaging of jobs which occurred in the first half of this year. The plunge on Wall Street was a result of a lowered level of demand after the credit bubble burst. The market adjusted by reducing prices in such places as the gas pump. This temporarily restored consumer confidence in the U.S. and abroad through a rise in spending power.
[Last November] declining heating oil and fuel costs and “the expectation that gas prices will follow suit” [was] increasing households purchasing power, “giving them room to spend.”
However, just as the correction was taking hold, the bailouts and stimulus artificially forced prices back up by inflating the money supply and caused employers to dump workers by the millions.
A higher deficit surrendered through a second spending package will only supplement more cost increases and is certain to result in another rise in the unemployment rate.
Washington says it’s preparing a second stimulus package by the end of the year, after White House claims that the U.S. economy is showing signs of improvement. But analyst Gerald Celente is skeptical about the move.
…“There is no recovery with recession. It’s nearly in remission. They’ve given it loads of stimulus drugs and monetary infusions. But it’s not going to cure the chronic degenerative disease of a failing economy,” says Celente.
Easy credit, cheap money and masses of borrowing caused the problem, explains Celente. That’s what caused the current economic crisis, he says, adding:
“To put more cheap money, more easy credit and more ramped buying is only going to escalate a bad situation,” concluded the analyst.
The administration’s actions are the continuation of a merger between state and corporate powers which Celente called ‘fascism’ during an April interview.
RT: I’d like to begin by talking about the Treasury department. They’ve decided to extend bailout funds to a number of struggling life insurance policies. This is in addition to the auto industry and the banks. Do you think Americans are aware of what’s going on?
G.C.: They know about it, it’s a new trend. America is going from what used to be the major capitalistic country in the world of free market – a crusader – into what Mussolini would have called fascism: the merger of state and corporate powers. So it is not socialism as people believe, it is socialism’s egalitarianism. It’s not communism where the state controls monopolies – it’s fascism, plain and simple. The merger of corporate and government powers. State-controlled capitalism is called fascism, and fascism has come to America in broad daylight. But they’re feeding them it in little bits and pieces. First AIG was too big to fail. Mortgage companies Fannie Mae and Freddie Mac were too big to fail. Banks too big to fail and auto companies. And now we give money to the people that make the auto parts. And now there’s talk about the technology companies, wanting their piece of the action. The merger of state and government is called fascism. Take it from Mussolini; he knew a thing or two about it.