Learn from Past Mistakes

"There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy." -President-Elect Barack Obama, January 9, 2009

"With all due respect Mr. President, that is not true. Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we the undersigned do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan’s “lost decade” in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policymakers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth." -Open Letter from the Cato Institute

I've said it before, and I'll say it again: why do lawmakers never seem to learn from past mistakes? From a 2004 UCLA study on how FDR's policies prolonged the Great Depression by seven years (by Harold L. Cole and Lee E. Ohanian):

"Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump," said Ohanian, vice chair of UCLA's Department of Economics. "We found that a relapse isn't likely unless lawmakers gum up a recovery with ill-conceived stimulus policies."

I think a stimulus package to the tune of $800-some billion equals "gum."