Spending and Bailouts and Stim Pkgs, Oh My!

Today's economy: In a recession? Yes. Headed for the Great Depression Part II? Let's hope not. So here's the million . . . wait, the trillion dollar question: What is the best way to jump-start the economy back to life? Right now and in the near future, it seems that those in government want to revisit old, failed Keynesian strategies. Keynesian economics calls for large increases in federal deficit spending, rebate checks, stimulus packages, etc. It embodies the strange idea that borrowing from Peter to stimulate Paul will somehow result in an increase in aggregate production, "stimulating" the economy. These ideas dominated the domestic economic agenda from the 1930's to the 1970's. Were these strategies successful?

2 UCLA economics PhDs studied the policies and programs of the New Deal for 4 years to determine their effects on the Great Depression. Their findings were published in 2004, with the main conclusion being that FDR's New Deal policies (more specifically, the National Industrial Recovery Act) actually prolonged the Great Depression by 7 years. Here's just one snippet from the press release:

"The fact that the Depression dragged on for years convinced generations of economists and policy makers that capitalism could not be trusted and that significant government intervention was required to achieve good outcomes. Ironically, our work shows that the recovery would have been very rapid had the government not intervened." Here's the link for the full article: http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx

Japan tried to spend their way to prosperity by instituting Keynesian policies in the 1990's as well. The result: a well-documented economic stagnation which lasted a decade. On the flip side, when countries like Ireland, the Czech Republic, and New Zealand dramatically cut federal spending as a percentage of GDP - enabling them to reduce taxes, their economies boomed.

So what's the answer? What is the best way to "stimulate" the economy, preventing the next Great Depression? I'm interested to hear what you all think.

Minister Wright's Prayer

Sunday, this prayer appeared on the back of our program. I thought it was very thought provoking. I wanted to post it and see what you thought about it.

When Minister Joe Wright was asked to open the new session of the Kansas Senate, everyone was expecting the usual generalities, but this is what they heard:

Heavenly Father, we come before you today to ask your forgiveness and to seek your direction and guidance. We know your word says, "Woe to those who call evil good," but that is exactly what we have done.

We have lost our spiritual equilibrium and reversed our values. We have exploited the poor and called it the lottery.
We have rewarded laziness and called it welfare.
We have killed our unborn and called it choice.
We have shot abortionists and called it justifiable.
We have neglected to discipline our children and called it building self esteem.
We have abused power and called it politics.
We have coveted our neighbor's possessions and called it ambition.
We have polluted the air with profanity and pornography and called it freedom of expression.
We have ridiculed the time-honored values of our forefathers and called it enlightenment.
Search us, oh God, and know our hearts today; cleanse us from every sin and set us free.
Amen.

The response was immediate. A number of legislators walked out during the prayer in protest. In 6 short weeks, Central Christian Church, where Rev. Wright is pastor, logged more than 5,000 phone calls with only 47 of those calls responding negatively. The church is receiving international requests for copies of this prayer from India, Africa and Korea.