The economic news continues to be bad, as the Democrats continue to pretend they know what they are doing with economic policy. Unfortunately for the country, they don’t. Unemployment remains sky-high, and every effort the Democrats have made to shovel tax money at the problem has failed to reignite the economy. If it is true we all are Keynesians now, the country is in big trouble.
The latest news to hit the tape is the housing start numbers, which show very slow activity. That should not really be a surprise, because the Democrat-controlled government decided to give subsidies to people buying new homes through the spring, and has now moved to stop the free give-away. Currently there is an enormous inventory of foreclosed housing. Why was the government subsidizing new housing? I have no idea. To prop up the construction unions I guess. But now that the spigot has been turned off, housing starts have crashed:
“Permits for single-family homes -- considered by many to be the most vital number in Tuesday's release -- fell 3.4% to a seasonally adjusted annual rate of 421,000, the lowest level since April 2009.
Permits and starts had risen smartly earlier in the year, as builders stepped up their pace to meet the deadline for the federal home buyers' subsidy. Economists say the tax credit served to pull demand forward into the spring that might have been spread out through the year.”
So the government spent tax dollars to move demand from the back of 2010 to the front. I hope the Democrat plan was to artificially make the economy look strong in the early part of 2010 in order to position better for the fall elections. Because if that was not the plan, they just wasted a lot of money on a completely futile exercise with a completely predictable outcome. For some reason it makes me feel better if we are run by smart people acting against the best interests of the country rather than if we are run by stupid people. I have not decide what the current situation is, but I know one thing: it’s one or the other. And neither scenario leads to a stronger US.
Pick a Republican candidate – any Republican candidate – and go help that person get elected. The election is less than four months away.
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