President Obama will sign the latest trillion-dollar spending bill today in Denver. According to the President, this bill is a “major milestone on our road to recovery.” As he has said before, Obama fears that failure to unleash another mind-bendingly large deficit spending package could “turn a crisis into a catastrophe.” And just to allay any fears of the inflationary effects of such spending, Obama reminded everyone that the deficit exploded on President Bush’s watch as well. Evidently that’s supposed to make everything okay. The Obama team’s economic policy to date can be summed up as, “In for a penny, in for a trillion dollars.”
As I watch this slow-motion fiscal train wreck unfold, an old parable comes to mind. Once upon a time there was a rich man who lived in Amman. One morning he went into his garden only to find Death there, staring at him. Terrified, the man ran back inside and told his servant that he was going to Damascus to escape Death, who was waiting for him in the garden. After the man departed, the servant went into the garden and asked Death, “Why were you staring at my master?” Death replied, “I was surprised to see him here. You see, I have an appointment with him tonight in Damascus.”
In this parable, the man’s desperate attempt to avoid death by fleeing to Damascus is exactly what seals his fate. And so it is with the current economic crisis. Obama’s attempt to avoid the inevitable effects of decades of government intervention in the free market is precisely what will deepen the depression he so desperately wants to avoid. As bad as the economy Obama inherited was, his panicked Keynesian spending spree will only make it worse by preventing needed structural adjustments and adding massive inflationary pressure to an already devalued fiat currency.
Those with a basic understanding of free-market economics can clearly see not only what awaits us farther down this road, but also the missteps that led us to this point in the first place. Nevertheless, we are all being pulled toward our economic doom by a panicked government desperate to avoid the fate its own actions have devised.
See you in Damascus…
