Arthur Laffer has an excellent commentary in the Wall Street Journal this morning explaining why, in 25 years, the current Congress will be remembered like we remember Herbert Hoover, in other words, not kindly.
But the government isn’t finished. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid — and yes, even Fed Chairman Ben Bernanke — are preparing for a new $300 billion stimulus package in the next Congress. Each of these actions separately increases the tax burden on the economy and does nothing to encourage economic growth. Giving more money to people when they fail and taking more money away from people when they work doesn’t increase work. And the stock market knows it.
For another view, check out Donald Lambro’s editorial. Of course his view does not take into account that we’re coming out of the biggest financial mania in history. It also demonstrates incredible faith in the ability of government to solve our problems when history demonstrates that the government almost always exacerbates problems in the aftermath of a financial mania. We shall see.