Federal government intervention hasn't solved all our economic problems yet, so it's time to try the same things again, obviously. Without a gold standard or something similar, the Federal Reserve has the ability to create money, and put more of it into circulation. They claim this is to improve the economy. Interestingly, they expanded the money supply by 2.45 trillion dollars from Sept 2008 to June 2010 (the biggest expansion in history), and as you may have noticed, it didn't improve the economy. So now they're planning "QE2" to expand it by another 800 billion dollars (600B fiat and 200B from TARP funds) from now until mid-2011. It will have an impact, primarily by further enriching the biggest banks, who are at the front-end of the expansion, but it won't benefit the economy in accordance with their stated goals.
This makes it clear, once again, that these high-level leaders (Obama; Bernanke, chairman of the Federal Reserve; Timothy Geithner, Secretary of the Treasury; et al.) don't exercise common sense and appear to be too ignorant for their posts. They're guessing! Worse, they're gambling with trillions of dollars of our money. Bernanke just recently said that QE2's 800 billion dollar expansion is an "experiment."
Expand the money supply to stimulate the economy? Really? Consider this quote and see if it doesn't make more sense than our exalted leaders... "A lesson that was taught by classical economists that remains true: there is no ideal supply of money in a society. Any quantity of money will do, so long as the quality of the money is sound. Prices adjust based on the existing money supply. New quantities of money injected into society confer no social benefit. If production rises and the money supply remains stable, the purchasing power of the money will rise. If production falls while the supply of money remains stable, the purchasing power of money will fall." End the Fed, Ron Paul, page 203
Obama, Bernanke, and Geithner seem to have no concept that the money supply has quality, let alone that their actions are harming its quality. But whether I like it or not, QE2 is here. If, as I suspect, QE2 makes things worse in the long run, then Obama probably won't be reelected in 2012, because the economy will still be struggling. By then, a majority of voters will know or suspect that Obama and his czars' efforts to control the economy were guesses all along, and they guessed wrong. And instead of making things better, they made things far worse.
In 2012, the Democrats will almost certainly field Obama again, and no independent or 3rd party candidate is likely to win, so if we're to change presidential administrations, it will have to come from electing whoever wins the Republican primary. So let's not blow this deal.
I don't know who to recommend yet, but I know who not to recommend: Sarah Palin. Why? Lack of sufficient experience and knowledge. She's added to her knowledge since her vice-presidential candidacy, and can add more, plus she is an electric speaker (with polarizing charges - pun intended), and her experience is greater than Obama's was before he became President, but her experience is still not enough. I want a President with a lot more experience and a lot better understanding of economics than either Obama or Palin. Surely we can find someone better out of 310 million people. And while it is essential to have a candidate who understands the importance of a constitutionally-limited civil government, of financial responsibility, and of free-market economics, is it too much to hope that such a candidate could be more congenial than polarizing?
