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America's "War on Capitalism": Why More Govt. Stimulus Is a Bad Idea
Posted Jul 08, 2009 08:36am EDT by Aaron TaskIt's "premature at this point" to talk about a second stimulus package, a White House spokesman told The Wall Street Journal.
But less than 24 hours later, Obama economic adviser Laura Tyson recommended more stimulus at a speech in Singapore, and downplayed concerns about the deficit, Bloomberg reports. "The concern is that the U.S. will have to inflate away its debt. I do not think that is a valid concern," she said.
With the U.S. already "teetering on $62 trillion of debt," this is a very dangerous game, says Charles Ortel, managing director of Newport Value Partners, an independent research firm. Still, he believes the Obama administration is "going to try" for more stimulus this year, even if the $787 billion package passed in February was a "hodgepodge of programs nobody really understands."
In addition to adding to America's yawning deficit, Ortel opposes more stimulus because he believes the government is the "sector of the economy that needs to be subjected to a scalpel."
He also worries the Obama administration is waging a "war on capitalism," but doesn't give President Bush high marks on that front either.
As to the Keynesian argument the government needs to grow during periods of severe economic distress, Ortel says history suggests otherwise. "It's not clear stimulus worked" to get America out of the Great Depression in the 1930s, he says, and it's "abundantly clear Japan's stimulus didn't work" to stem its now 20-year economic malaise.
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