Obama cuts more spending then Bush

[Bugs]

Just out of interest...since you seem to think that Obama was horridly irresponsible for creating a massive deficit and debt, do you feel the same way about what Stephen Harper did? Or is that different?

Well, one difference is that Stephen Harper government withdrew its original budget because of opposition demands for more stimulus, and provided it in a redrafted budget. The last budget was, at least in some ways, a product of the minority government.

A second difference is that, whatever else, the stimulus wasn't a pork-laden monstrosity, and it is being far more effective, to the point of contributing to a bit of bubble in real estate and the construction trades.

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I agree with the spirit of your question, though probably from the other side. It seems to me that, for right-wing people, economics and democracy come into conflict. I mean it in this way. The Austrian economics model would be to make the banks eat the losses, even if they go bankrupt. Protect the dollar, extend unemployment, open soup kitchens if you must, whatever to get through the next two to five years. And let the sucker go down.

Why is this best? Because what is wrong with the system is that there are a lot of bogus values in the marketplace. Think of the stock market -- what hope leads people to bid that market up so high, based on realistic prospects of earnings? It's things like the bailouts profits of the financial institutions, the revived hopes of GM. Similarly, the inflated house prices are not passing from the market. Even giving people bonuses to buy these houses, even with 3% mortgages, the buyers are only trickling back to the market.

The economic cure is to get rid of these false values as fast as possible. Let the crash happen.

But this solution conflicts with every political instinct of successful democratic politicians. In fact, letting a crash like this happen would inflict huge political penalties on any party.

For this reason, Obama is now doomed -- he has gone past the point of no return. His choices, from here on out, are to waste all of the bailout money, and crash the economy -- or, to continue to print money and risk a genuine hyperinflation. He's going to see no way out, and we are all going to have a nasty incident with inflation, starting in the next two or three years. You will start to hear of the misery index again ... as we go into stagflation ... the worst economic outcome of all, inflationary depression, which, of course, will necessitate a devaluation and monetary reform.