Obama's Stimulus Scam

Meltdown

By Thomas E Woods Jr

Most of us have probably heard just about all the arguments we can take in favor of the so-called stimulus package Barack Obama urges upon us.  They boil down to this: if the government seizes resources from individuals (whether by direct taxation, borrowing, or inflation) and devotes them to arbitrary projects, we will prosper.

Japan has been through countless "stimulus" packages over the past 18 years, none of which has accomplished a thing apart from driving that country deeply into debt.  And after years and years of government attempts to give artificial stimulus to the stock market and the real estate sector, the Japanese stock market is now about where it was in the mid-1980s, and real estate is selling, on average, for the same prices it was in 1975.

The same is true of the American economy of the 1930s, the decade in which President Franklin D. Roosevelt was supposedly lifting the country out of the Great Depression.  Far from restoring prosperity, Roosevelt did everything he could to interfere with the economy's adjustment from depression to health.  Thus instead of letting prices and wages move freely so the economy could reallocate resources rationally, he kept wages artificially high (and workers artificially unemployable) and propped up consumer prices.

More pertinent to our situation, FDR's make-work programs dwarfed even Herbert Hoover's public-works spending, which had allocated more funds for that purpose in four years than had been spent in the previous 20.  Billions of dollars later, what FDR had succeeded in doing was to divert resources from a private sector starved for capital, and thereby weaken the forces of recovery.  When genuine wealth generators have to compete with government for labor and resources, the productive sector is weakened at the hands of the parasitic sector.

>From 1933 to 1940, the unemployment rate averaged 18 percent.  As the 1930s ended, FDR's Treasury secretary, Henry Morgenthau, wrote in his diary: "We have tried spending money.  We are spending more than we have ever spent before and it does not work.... We have never made good on our promises.... I say after eight years of this Administration we have just as much unemployment as when we started...and an enormous debt to boot!"

What a perfect summary of the stimulus scam: it doesn't deliver what it promises, and it saddles the people with more debt.  You'd think we would have learned this simple lesson, but instead our children have been taught that FDR -- as big an economic ignoramus as has ever occupied the White House -- was a genius who saved the American economy.  The economic and historical research debunking this view is all over the professional journals, but the New York Times professes to be horrified to learn that dissent exists over the legacy of FDR.

It is impossible to devise a plan for economic recovery without knowing what caused the downturn in the first place.  FDR didn't have the slightest idea.

As the great free-market economists Ludwig von Mises and F.A. Hayek (who won the Nobel Prize in 1974) showed, when a government-established central bank, such as the Federal Reserve, forces interest rates below the level at which the free market would have set them, it sets off an unsustainable investment boom, particularly in time-consuming projects far removed from finished consumer goods (mining, construction, etc.).

Now if interest rates had come down because the public was saving more, then the public's saved resources would have provided the material wherewithal to see all the new investment through to completion.  But if interest rates come down because the central bank forces them down artificially, as in the case we're examining here, then the investment boom cannot persist because insufficient resources have been saved to fund them.  The passage of time will reveal that they cannot all be completed.  Many of these investments turn out to be malinvestments -- that is, investments that should never have been undertaken in the first place, but that investors were misled by artificially low interest rates into thinking were profitable.  They have to be abandoned.  The bust comes.

In other words, it isn't the "free market" that causes the boom-bust cycle.  It's the central bank's interference with the free market.

It's essential that government not interfere in the economy during the bust.  Malinvestments need to be liquidated, not propped up with emergency loans.  The economy's structure of production needs to be reorganized, with resources moving out of firms and sectors that were artificially and uneconomically expanded during the boom, and into genuinely profitable lines of production that cater to real consumer wants.  Prices and wages need to be flexible in order to effect this rearrangement.

FDR interfered in this healthy process every step of the way.  Not surprisingly, recovery eluded him.  (And as I show in Meltdown, my new book, even the common claim that "World War II got us out of the Depression" is false and yields unnecessary ground to the stimulus-mongers.)

That's why the depression of 1920, whose first year was worse than that of the 1929 depression, was so short lived.  Instead of a "stimulus" package, the federal government cut its budget.  The Federal Reserve didn't try to inflate the boom back into existence.  The economy sorted out the sound investments from the malinvestments, and before long the United States was back to setting production records once again.

Where is Warren G. Harding when you need him?

Thomas E. Woods, Jr., is the New York Times bestselling author of nine books, including The Politically Incorrect Guide to American History and, most recently, Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse.  Read a free chapter at MeltdownTheBook.com and visit Tom at ThomasEWoods.com.

Glenn gives the latest coronavirus numbers, updating YOU on everything needed to know as Americans and officials monitor China's new COVID-19 virus:

Daily Stats as of 5:30 AM CT (from John's Hopkins)

  • Total Confirmed Cases Worldwide: 486,702 (up from 434,595 Yesterday)
  • Total Confirmed Deaths Worldwide: 22,022 (up from 19,603 Yesterday)
  • Total Confirmed Recovered Worldwide: 117,448 (up from 111,853 Yesterday)
  • 4% of Active Cases are considered serious (requiring hospitalization) Steady from 4% Yesterday, and down from 19% in February
  • Note that 12% of US Confirmed Cases do currently require Hospitalization, but that number is expected to drop toward the international average as more people are diagnosed through testing.
  • US has 65,581 Confirmed cases and 1,036 Deaths, up from 54,941 cases and 784 Deaths yesterday
  • US has 428 total officially recovered, against 1,036 official deaths. Again, US numbers are expected to normalize toward international averages as more mild cases are diagnosed.

Brother, Can You Spare $2 Trillion? https://www.cnbc.com/2020/03/25/coronavirus-stimulus-bill-updates-whats-in-the-2-trillion-relief-plan.html
  • US Senate Passes the largest economic stimulus bill in world history.
  • The Senate passes a roughly $2 trillion economic relief plan in response to the coronavirus pandemic.
  • It includes direct payments to Americans, strengthened unemployment insurance, loans to businesses small and large and increased health care resources for hospitals, states and municipalities.
  • Loans to small businesses are technically 'grants' covering payroll and rent payments. Grants do not have to be repaid.
  • It is unclear when the House will pass the legislation, though it aims to do so Friday.
Every American Will Get $1,200 in 2-3 Weeks, $2,400 plus up to 4 months Unemployment Benefits https://www.dailymail.co.uk/news/article-8152139/Every-American-four-months-unemployment-checks-earning-95-000.htm
  • Workers will get four months of unemployment pay plus additional $600 each.
  • Direct checks to Americans include 1,200 per adult making up to $75,000 a year before phasing out and ending altogether for those earning more than $99,000
  • That would result in $2,400 to a married couple making up to $150,000, with an additional $500 per child for each household.
  • 'Our expectation is within three weeks we will have direct payments out,' Treasury Secretary Steve Mnuchin said.
Cuomo Confirms What Introverts Have Long Known: Social Distancing Works https://www.scmp.com/news/china/article/3077011/coronavirus-new-york-governor-andrew-cuomo-says-early-signs-show-social
  • Stringent density control measures may be working to contain the coronavirus in New York state, the epicenter of COVID-19 outbreak in the US, as the rate of hospitalization shows early signs of abating, Governor Andrew Cuomo said on Wednesday.
  • New York, which has 19 million residents and nearly 31,000 infections, now accounts for 56 per cent of the confirmed cases in the country and more than 7 percent of the world's total.
  • Cuomo had ordered all but essential businesses to shutter by Sunday evening and residents to limit their outdoor activities and practice social distancing, effectively putting the state on pause.
  • On Tuesday, the number of hospitalized patients had doubled every 4.7 days, slowing from the rate of every 3.4 days on Monday and every two days on Sunday, Cuomo said at his daily coronavirus briefing.
  • "This is a very positive sign," he said. "The arrows are heading into the right direction."
Were the Beads Worth It? Mardi Gras Gets Blame for Big Easy Outbreak https://news.trust.org/item/20200325200808-oc1ie
  • "Mardi Gras was the perfect storm, it provided the perfect conditions for the spread of this virus," said Dr. Rebekah Gee, who heads up Louisiana State University's health care services division.
  • She noted that Fat Tuesday fell on Feb. 25, when the virus was already in the United States but before the Centers for Disease Control and Prevention and national leaders had raised the alarm with the American public.
  • "New Orleans had its normal level of celebration, which involved people congregating in large crowds and some 1.4 million tourists," Gee said. "We shared drink cups. We shared each other's space in the crowds. People were in close contact with catching beads. It is now clear that people also caught coronavirus."
  • New Orleans is on track to become the next coronavirus epicenter in the United States, dimming hopes that less densely populated and warmer-climate cities would escape the worst of the pandemic, and that summer month could see it wane.
  • Authorities have warned the number of cases in New Orleans could overwhelm its hospitals by April 4.
  • New Orleans is the biggest city in Louisiana, the state with the third-highest caseload of coronavirus in the United States on a per capita basis.
  • The growth rate in Louisiana tops all others, according to a University of Louisiana at Lafayette analysis of global data, with the number of cases rising by 30% in the 24 hours before noon on Wednesday.
  • On Tuesday, U.S. President Donald Trump issued a major federal disaster declaration for the state, freeing federal funds and resources.
US Military Officially On No-Travel Lockdown https://news.trust.org/item/20200325203242-zgoc4
  • Defense Secretary Mark Esper has issued a "stop all movement" order to the U.S. military halting travel and movement abroad for up to 60 days in an effort to limit the spread of the coronavirus through the ranks.
  • The measure is by far the Defense Department's most sweeping to date and will affect forces around the world.
  • Esper said in an interview that the order applied to all U.S. troops, civilian personnel and families, but noted that there would be some exceptions.
  • "The purpose is to make sure that we're not bringing the virus back home, infecting others, that we're not spreading it around the military," Esper said.
  • The order does include personnel who were to have been scheduled to be formally discharged from the Military in April or May.
  • Esper said one exception to the order would be the drawdown underway in Afghanistan, which will continue.
For The Best Darn Facemask In The Whole Wide World... https://www.foxnews.com/us/mypillow-other-us-companies-making-face-masks-to-meet-coronavirus-shortages
  • In Minnesota, the MyPillow company is refocusing 75 percent of its production to face masks for health care workers.
  • "We have the capacity to make a lot of things at big rates and we're going to be going hopefully from 10,000 units a day to 50,000 units a day in a very short period of time," CEO Mike Lindell told FOX 9 of Minneapolis-St. Paul.
  • The masks will go to hospitals in Minnesota as well as other states, he said. "Whatever it takes."
  • MyPillow worked with the Trump administration to get the proper design, Lindell told local Fox News 9.
  • Lindell joins literally hundreds of other companies in the US who have heeded the call of the Trump Administration to covert production to respirators, masks, ventilators, gowns and other needed medical equipment.
Further Evidence that COVID-19 Is Seasonal and May Spread Less in Summer Months https://news.yahoo.com/coronavirus-could-become-seasonal-top-us-scientist-001146451.html
  • There is a strong chance the new coronavirus could return in seasonal cycles, a senior US scientist said Wednesday, underscoring the urgent need to find a vaccine and effective treatments.
  • Anthony Fauci, who leads research into infectious diseases at the National Institutes of Health, told a briefing the virus was beginning to take root in the southern hemisphere, where winter is on its way.
  • "What we're starting to see now... in southern Africa and in the southern hemisphere countries, is that we're having cases that are appearing as they go into their winter season," he said.
  • "And if, in fact, they have a substantial outbreak, it will be inevitable that we need to be prepared that we'll get a cycle around the second time," Fauci said, referring to a 2nd cycle in the US late next fall in November or December.
  • "It totally emphasizes the need to do what we're doing in developing a vaccine, testing it quickly and trying to get it ready so that we'll have a vaccine available for that next cycle."
  • Fauci's comments suggesting the virus does better in colder weather than it does in hot and humid conditions follows a recent Chinese research paper -- still preliminary and awaiting peer-review -- that reached the same conclusion.

Glenn gives the latest coronavirus numbers, updating YOU on everything needed to know as Americans and officials monitor China's new COVID-19 virus:

Daily Stats as of 5:30 AM CT (from John's Hopkins)

  • Total Confirmed Cases Worldwide: 434,595 (up from 392,156 Yesterday)
  • Total Confirmed Deaths Worldwide: 19,603 (up from 17,138 Yesterday)
  • Total Confirmed Recovered Worldwide: 111,853 (up from 102,850 Yesterday)
  • All 195 Countries On Earth have confirmed cases Antarctica (not a country) Still No Confirmed Cases. Penguins officially confirmed to NOT be carriers for COVID-19.
  • 4% of Active Cases are considered serious (requiring hospitalization) down from 5% Yesterday, and down from 19% in February
  • Note that 13% of US Confirmed Cases do currently require Hospitalization, but that number is expected to drop toward the international average as more people are diagnosed through testing.
  • US has 54,941 Confirmed cases and 784 Deaths, up from 46,168 cases and 582 Deaths yesterday
  • US has 379 total officially recovered, against 784 official deaths. Again, US numbers are expected to normalize toward international averages as more mild cases are diagnosed.

LA County Sherrif Orders Gun Stores Closed https://www.foxla.com/news/la-county-sheriff-orders-gun-stores-to-close-adds-1300-deputies-to-patrol
  • Los Angeles County Sheriff Alex Villanueva declared gun stores as nonessential businesses that will be forced to close.
  • The Sherrif also confirmed that he's released 1,700 nonviolent inmates from county jails.
  • Villanueva also said he's adding 1,300 deputies to patrol.
America Loses 500,000 Millionaires to COVID-19 - Bernie Sanders Elated https://www.msn.com/en-us/finance/markets/america-e2-80-99s-millionaire-ranks-shrink-by-500000-in-record-time/ar-BB11DrqN
  • At the close of 2019, there were an unprecedented 11 million American millionaires, a reflection of the longest bull market in history thanks to ultra-low interest rates and tax cuts.
  • Fast forward just a few months and it's a starkly different picture. The number of households in the U.S. above that threshold has dropped by at least 500,000 as of Friday, according to research firm Spectrem Group.
  • The tandem financial and health crises wrought by COVID-19 have disproportionately eroded the fortunes of the wealthy, who are more likely to own equities than the overall population.
  • At the end of 2019, the top 1% of households owned 53.5% of equities and mutual fund shares, according to Federal Reserve statistics.
  • The losses affected the rich at every level, from the mass affluent to those worth more than $25 million, according to the report. The wealth destruction at the very top has been especially steep, with the top 1% of households losing over $7.9 Trillion in wealth so far in 2020.
50% of Americans Living Under Shelter In Place or Home Quarantine Orders https://www.washingtonexaminer.com/news/more-than-half-of-us-population-will-be-under-orders-to-stay-home-by-midweek
  • The majority of the public will be ordered to stay home in the coming days as the coronavirus pandemic sweeps the nation.
  • A total of 13 states and at least 16 municipalities have enacted measures to keep residents inside their homes to prevent the spread of the virus, according to CNN.
  • That number, which amounts to 148,577,262 people, or 45% of the population, is expected to grow this week as five more states and nine more municipalities institute additional measures.
  • After the new orders go into effect, a total of 176,385,537 people, or 54% of the population, will be asked to stay home.
  • Many states and cities have not named a specific date, although some, such as LA County and the State of New York, have identified April 19th as the target 'end' of the at-home quarantine orders.
Uniformed Military Personnel Set Up Make-shift Morgue Outside NYC Hospital https://nypost.com/2020/03/24/makeshift-morgue-for-coronavirus-victims-set-up-outside-nyc-hospital/
  • In a scene reminiscent of Hollywood disaster movies (and more recently China, Italy and Spain), US Military personnel have set up a tent-based morgue outside of Bellvue Hospital in NYC.
  • Two refrigerated trailers were trucked to the site at 30th Street and the FDR Drive, along with a customized RV with a printed sign labeled: "MOBILE COMMAND CENTER — MEDICAL EXAMINER."
  • A team of men wearing camouflage fatigues and face masks set up a series of white tents that form a tunnel to a larger, white tent.
  • Other men wearing jackets that identified them as members of the NYPD and the city's Office of the Chief Medical Examiner were also at the scene.
  • A source familiar with the operation said that additional refrigerated trailers would be brought to the site and that similar set-ups would be built up outside other hospitals.
  • "The plan is for them to be there and throughout the city," the source said, with as many as 6 temporary morgue locations near hospitals in New York City.
UV Rays Proven to Destroy SARS-Cov-2 Virus https://www.accuweather.com/en/health-wellness/what-infection-rates-in-iceland-and-australia-may-reveal-about-how-covid-19-could-spread-in-the-us/707057
  • The infection rate for COVID-19 is 22 times higher in Iceland as compared to Australia.
  • The research comes as scientists in Hong Kong demonstrate that SARS-CoV-2, the virus responsible for COVID-19, is easily destroyed with UV light, just like all other known Coronaviruses.
  • "Direct exposure to UV light breaks down the membrane that houses the RNA of the virus," Dr Lon Kiang, lead researcher of the study said. Without the membrane, the virus cannot attach itself to healthy cells in the human body.
  • "This was expected, but is still certainly good news," he said.
  • Researchers said the findings may indicate that the virus will have a harder time spreading during warmer summer months, when more UV light strikes surfaces, including clothing and human skin, which may contain viral particles.
  • Scientists warned against directly and intentionally exposing skin to UV lights, which can cause burns and carries other risks, such as Cancer.

The mainstream media and the left are eager to report anything negative about President Donald Trump, even if it turns out to be Chinese Communist Party propaganda and disinformation.

On "GlennTV," Glenn uncovered some of the lies China's Communist Party is peddling to its own people and the rest of the world.

Watch the video clip from GlennTV, available exclusively at BlazeTV.com.

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Diagnosed with pneumonia and coronavirus, Rio Giardinieri, 52, was admitted to the ICU at Joe DiMaggio hospital in South Florida. After more than a week without showing any improvement, doctors told him there was nothing more they could do. Desperately ill, Giardinieri started saying his "goodbyes" to family and friends.

That's when a friend told him there was a potential "cure" for coronavirus, an anti-malaria drug called hydroxycloroquine. Though doctors at the hospital said they couldn't prescribe hydroxycloroquine, they put Giardinieri in touch with an infectious disease doctor who authorized the use. The next morning, he says he woke up feeling "absolutely perfect."

Giardinieri joined Glenn Beck on the radio program Tuesday to share his remarkable story and to weigh in on why he thinks information about this promising treatment for COVID-19 isn't being made more readily available.

"I'm not a scientist. I'm not a doctor. I can just tell you how I feel. And I know that I was not doing well. In my mind, I didn't believe I was going to be here by the morning," Giardinieri said. "I don't know what else to attribute [for recovery] but that medicine ... and it's not just me that it's worked for. There're many people this has worked for. So, you know, I certainly understand the hospital's position. They may not be too happy me telling the story. But the facts are the facts."

Watch the video below to catch more of the conversation:

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