“President-elect Barack Obama said the U.S. economy seems destined to get worse before it gets better and he pledged a recovery plan ‘that is equal to the task ahead,'” according to an article today on Fox News.
The part that scares me here is not that the economy will get worse before it gets better. The part that scares me is the pledge of a recovery plan “that is equal to the task ahead.”
Recovery plans can do good, if founded on sound free-market principles of tax cuts that spur investment (rather than tax cuts aimed to stimulate spending — the kind that Obama has been talking about as one part of his plan, where we all get $1,000 or so in the mail).
But when recovery plans are misguided, they do a lot of harm. A lot of harm. For more on this, see my previous posts Five Myths About the Great Depression and The Great Depression as We Know it Was Avoidable.