The Level Of Economic Ignorance Is Just Not Possible

It takes a relatively small amount of looking around and following economic statistics to figure out what works and what doesn't.  Sadly, almost no one is willing to do it, and our politicians display a level of willful ignorance that just doesn't seem possible.

A few examples.  The United States is deep into the most aggressive program of "stimulus" ever undertaken, with fiscal deficits in the range of $1 trillion per year for four years running.  So the economy must be taking off?  Well, actually, after many months of the most sluggish "recovery" anyone can remember, the economy just declined by 0.1% in the 4th quarter of 2012.  And the government shows every intention of continuing and even accelerating its war on productive economic activity:  Obamacare implementation, massive subsidies to uneconomic ("green") energy, intentional efforts by EPA and others to raise energy prices, increase in minimum wage, endless shakedowns of financial institutions, etc., etc. 

How is it going in the heartland of the high tax high spend economic model, the eurozone?  Even worse, of course!  GDP just shrank by 0.6% in the fourth quarter of 2012.   So that huge spending for bailouts of Greece and Spain didn't "stimulate" anything?  Guess not.

Then of course there's Japan:  20 years of "stimulus" and economic stagnation.  Debt now exceed 200% of GDP.   And what do they have to show for it?  Fourth quarter 2012 results:  down 0.4%.  It's not working there either.  Well, Japan has just brought back it's former Prime Minister, Shinzo Abe, with a fresh, new program for getting out of the economic morass:

Prime Minister Shinzo Abe, who took office in late December, is championing aggressive spending and monetary stimulus to help get growth back on track.

As I say, it's just not possible to have this level of economic ignorance.

Here in the U.S., there is now a glimmer of hope that we might get some very modest decreases in government spending by the mechanism of the "sequester," already baked into existing law.  Here is the near-hysterical reaction to that from the New York Times:

The sequester will not stop to contemplate whether these are the right programs to cut; it is entirely indiscriminate, slashing programs whether they are bloated or essential. . . .   These cuts, which will cost the economy more than one million jobs over the next two years, are the direct result of the Republican demand in 2011 to shrink the government at any cost, under threat of a default on the nation’s debt. . . . But the government spending they disdain is not an abstract concept. In a few days, the cuts will begin affecting American life and security in significant ways. . . .  Congressional budget experts say they have little doubt that the size and pervasive nature of the sequester will inflict widespread pain.

I've got news for them.  The way that the United States can start adding large numbers of real, productive, private sector jobs is to cut government spending.  You just need to compare the places that are languishing (Eurozone, Japan) to those that are doing well (e.g., Canada, and within the U.S. Texas and Florida) to learn the right prescription.  And you definitely have to learn not to listen to the editors of the New York Times.