Rice County Republicans

Today we began a trillion-dollar experiment. We don’t know the real cost, but we suspect the authors of the “American Recovery and Reinvestment Act” are more about wishing and hoping than they are about doing the right thing.

Fasten your seatbelts ... click for full size image.

The Keynesian model says that in times of recession, the government is justified in running deficits to make up for unrealized production. What seems to be missing is the thought that the government can only do this for the short term.  We have been on a Kenseyian binge for decades, and the resulting committment ($56 trillion, according to IOUSA.COM)  is coming due in a world that does not have the luxury of applying the Keynesian patch to this sinking ship. To label this the “American Recovery and Reinvestment Act” (can you taste the lipstick on this pig?) is just rhetoric.

While we dance merrily in the parlor with this pig, the accountants are doing the math in the kitchen, and they don’t seem to like the bottom line.

The market dropped 3.79% (DJI) in a sort of self-fulfilling prophecy. No doubt, if the market had gone up we would have heard that it was a vote of confidence by investors. Since it went down, we will no doubt be told that the market has an inverse relationship with hope, or some other bit of fluff.  Truth is, the movement of the market is way beyond the pundit’s ability to interpret, or they would be rich not because they write, but because they could invest cleverly.