Central planning seldom makes economic sense. However good a scheme looks on paper in some politician’s office, planned on the taxpayer’s dime, it's probably not worthwhile. If it really was a good scheme, then private enterprise would have already implemented the project.
Government never “stimulates” economic growth. Left quite alone, people engage in rational commerce guided only by enlightened self-interest. More crucially, government cannot predict the real consequences of its efforts to stimulate the economy. Republicans around the country are telling Americans that the ocean of dollars which the federal government spent on the future credit of our children in order to stimulate growth in America is actually being spent in China.
In yet another economically destructive ploy to “go green,” the Environmental Protection Agency has recommended an unprecedented barrage of harsh federal regulations on fuel efficiency standards for semi-trucks, buses, delivery vans, garbage trucks, and heavy-duty pickup tricks.
Let us be blunt: The mortgage foreclosure crisis, which first burst into full public view with Bank of America’s suspension of all foreclosures only a few days ago, has the potential to completely destroy the American real estate sector in an epic legal and economic meltdown that would make the crisis of 2007-2008 look like the proverbial Chinese tea party.
The notes of the latest meeting of the Federal Reserve, released on Tuesday, clearly show the Fed’s next step in trying to solve the problem it has created: Quantitative Easing II, or QE2 (qualitative easing is Fed-speak for increasing the money supply). The meeting lasted more than five hours and consisted of a debate about when to start the process: now, or later.