I don’t think Obama is stupid or that he’s trying to bankrupt the country. Rather, I suspect that like most statists, he doesn’t really believe that scarcity limits the state.
One must first believe in scarcity, i.e. that there is less of stuff than people want, before one can believe most of what economics teaches, particularly opportunity cost. Just about every statist I’ve ever talked to or read seems to deny that scarcity limits the state in any way, such that there’s no economic limit to the amount of money that the state can print, borrow, tax or spend. All limits on the state are politically imposed for partisan reasons, and the economy seems to grow or shrink as the politicians decree.
Imagine how you’d think about economic policy if you believed as Obama does. Your stimulus would have worked better if only it had been bigger, so what you need is another one just like it. Never mind that the first stimulus was designed to maintain the rapid growth of the public sector over the last decade and not to stimulate demand going forward. You want a green economy and jobs? Just borrow billions from the Chinese and throw them at green energy companies. In the meantime, turn the regulatory screws on the carbon energy sector to put them out of business; there’s plenty of money to throw at their soon to be unemployed workers. Oh, and don’t worry about the cost of energy on business; companies will simply have to cut their profits and executive perks to make up the difference.
Now, why is there economic inequality? Because greedy rich people hoard their money to keep it away from the poor so that they’ll suffer? No. Scarcity does not limit the state, ergo there can only be poor people if the state doesn’t borrow or print enough money to spend on them. Therefore, economic inequality isn’t a feature of human nature but one of politics, and Obama’s politics provide the remedy.
Obama would heal us if we let him, but we’re too darn ignorant and stubborn and bigoted and religious and ensnared in our false class consciousness to acquiesce. Isn’t this what the left have preached these past three years? Indeed, and the sermon relies on one article of faith: Scarcity does not limit the state.
