The late Senator Everett Dirkson of Illinois is quoted as making the tongue in cheek remark, “A billion here, a billion there, and pretty soon you're talking real money.”  He also said that in order to visualize the amount of money congress was proposing to spend; he’d knock three zeroes off the amount. These days, politicians need to knock six or even nine zeros off the staggering numbers they are dealing with.

 You may remember the president saying a year back that “We must continue spending our way out of this recession.”  He’s still spending and we’re still in a recession. There doesn’t seem to be an end in sight—either for the recession or his wanton spending of our money. Despite his rosy predictions, unemployment numbers are still bleak and the deficit is still growing.

Just yesterday, Obama urged congress to approve nearly $50 billion in emergency aid to state and local governments. He said the money was needed to avoid "massive layoffs of teachers, police and firefighters" and to prop up the economy. I think people have caught on to the old trick of threatening to lay off police and firemen whenever a city wants to raise taxes. They never threaten to lay off any of the guys leaning on their shovels over at the street department or a few laborers in the Parks Department. In any event, since when is it the responsibility of the federal government to pay for teachers on state payrolls or employees in the various cities around the country? It seems like the federal government has its nose and our money stuck into everything.

In a piece published earlier this year, Brian Riedl of the Heritage Foundation explains why government spending doesn’t stimulate the economy.  “…the important question is why government spending fails to end recessions. Spending-stimulus advocates claim that Congress can "inject" new money into the economy, increasing demand and therefore production. This raises the obvious question: From where does the government acquire the money it pumps into the economy? Congress does not have a vault of money waiting to be distributed. Every dollar Congress injects into the economy must first be taxed or borrowed out of the economy. No new spending power is created. It is merely redistributed from one group of people to another.

Congress cannot create new purchasing power out of thin air. If it funds new spending with taxes, it is simply redistributing existing purchasing power (while decreasing incentives to produce income and output). If Congress instead borrows the money from domestic investors, those investors will have that much less to invest or to spend in the private economy. If they borrow the money from foreigners, the balance of payments will adjust by equally raising net imports, leaving total demand and output unchanged. Every dollar Congress spends must first come from somewhere else.” 

The fact that the original stimulus didn’t work is a good indication that another stimulus, like the one Obama is eyeing, won’t work either. The economy is going to remain in some sort of recession until confidence is restored. As long as the Obama administration continues to throw our money around, expand government by hiring new federal employees at a dizzying pace, threatens the economy with tax increases, adds stifling federal regulations and bullies business in general, things aren’t going to improve very fast. What many people fear, me included, is that Obama will continue to spend us into more debt than we can ever pay ourselves out of and leave office with Fort Knox for rent as an empty warehouse. The next administration will have to devote all it’s time trying to undo all of Obama’s malfeasance, while the Democrats scream that the mean old Republicans want to take away all the “free” stuff that Saint Obama gave the poor at the expense of the evil rich (working class).