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In this issue
Nov. 20, 2009
Rabbi David Aaron: How to make every second of your life come first
Caroline B. Glick: Whither American Jewry
Nov. 19, 2009
Binyamin L. Jolkovsky: Please Listen to this Godcast (5 minutes)
Jonathan Tobin: ADL Crosses the Line with Report Bashing Obama Critics
Nov. 18, 2009
Rabbi Yonason Goldson: What Judaism has to say about the secret of the Mona Lisa's smile
JWisdom.com: The (Jewish) Dating Game with Rabbi Lawrence Hajioff (8 minutes)
Nov. 17, 2009
Steven Emerson: How Does the 4th Amendment Impact Terror Finance Investigations?
JWisdom.com: If Frank Sinatra married Edith Piaf with Rabbi Y.Y. Rubinstein (2 minutes) Life lessons from what would be regarded as the most inappropriate lyrics ever sung
Nov. 16, 2009
The Jewish Ethicist by Rabbi Dr. Asher Meir : When borrowing is stealing
JWisdom.com: Deconstructing faith with Rabbi Warren Goldstein (9 minutes)
Nov. 13, 2009
JWisdom.com Sarah's subjective reality with Rabbi Sroy Levitansky ( 6 minutes)
Caroline B. Glick: Obama's failure, Netanyahu's opportunity
Nov. 12, 2009
The Kosher Gourmet By Marialisa Calta : A sweet sweet potato treat
JWisdom.com Does God get tired? with Rabbi Harvey Belovski ( 5 minutes)
Nov. 11, 2009
Rabbi Avi Shafran: Jews and money: When anti-Semitism isn't
JWisdom.com Marriages are not made in Heaven with Rabbi Lawrence Hajioff (VERY fast 15 minutes)
Nov. 10, 2009
Michael Doyle: Author of book exposing CAIR ordered to remove supporting documents from Web
JWisdom.com If the creation so loudly shouts the existence of the Creator, why aren't more people believers? with Rabbi Naftali Brawer (9 minutes)
Nov. 9, 2009
Mark Steyn: Shooter exposes hole in U.S. terror strategy
JWisdom.com It's never too late to have a happy childhood with Sarah Chana Radcliffe (5 minutes)
Nov. 6, 2009
Rabbi Berel Wein: Choosing to hear
JWisdom.com Zero to 1/60th: How to Empower An Hour with Gavriel Aryeh Sande (7 minutes)
Caroline B. Glick The mullahs' big week
Suzanne Fields A Fallen Wall for Fallen Man
Nov. 5, 2009
The Kosher Gourmet: Three scrumptious -- but simple -- butternut squash dishes
JWisdom.com Hidden Hints: Unlocking Faith & Prayer with Rabbi Jay Yaacov Schwartz (10 minutes)
Nov. 4, 2009
Tom Hamburger and Kim Geiger: Should prayers be covered?
JWisdom.com When God played peacemaker With Rabbi Sroy Levitansky (5 minutes)
Nov. 3, 2009
Martin Peretz: Beware, Barack. Beware, Rahm. Beware, Axelrod
JWisdom.com Are you are closet idolater? With Sara Yoheved Rigler (10 minutes)
Nov. 2, 2009
Paul Greenberg: The Holocaust is now on Facebook
JWisdom.com Abraham's Strange Change With Rabbi Yitzchok Fingerer (5 minutes)
Oct. 29, 2003
Mortimer B. Zuckerman: Graffiti On History's Walls (MUST-READ!)

Jewish World Review Feb. 10, 2009 / 16 Shevat 5769

How ‘stimulus’ prolongs pain

By Dick Morris & Eileen Mc Gann


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http://www.JewishWorldReview.com | FROM Nouriel Roubini, the economist who most closely predicted the current mess, comes a warning couched in economic jargon that needs to be deciphered and publicized.


In a column on Forbes.com, Roubini warns that the United States, in its response to the economic crisis, may be following in the disastrous footsteps of Japan - whose sluggish and overly lenient response to a financial crisis led to a decade of economic misery.


In economic jargon, Roubini warns: The "market-friendly, case-by-case approach to the necessary debt reduction of insolvent private non-financial agents - corporate for Japan, households for the US - will be too slow." He calls for an "across-the-board debt reduction" - lest we be condemned to a "systemic debt overhang."


In English, this means that by helping people to stay in homes they can't afford, buy cars beyond their means, pay for college through loans - in short, to acquire goods and services on credit they can't sustain -we are doing them no favors. Instead, we're assuring that debt will "overhang" their lives like a vulture sitting on a branch, inhibiting their buying habits and inhabiting their nightmares.


But if we force an "across-the-board debt reduction" that makes them move out of their overpriced homes, trade in their luxury cars, transfer to state colleges - and, if necessary, escape from under their credit-card debt via bankruptcy, we can eliminate the "overhang" and let them and our nation get on with their lives.


Roubini realizes that this approach is "not politically feasible, at this point, in the US." But it must become feasible.


Remember, it was kindness that got us into this mess in the first place. It was the willingness of Fannie Mae to buy up mortgages that could never be repaid and the availability of low-interest student, car and home-equity loans that encouraged people to live beyond their means and thus spread this miasma of bad debt over our nation's economy.


And let us also remember how Japan's and Europe's soft-love economic policies served them so ill in the last 30 years.


In Japan, banks that should've failed were allowed to live on. Employees who should have been laid off got lifetime-employment guarantees. Companies that should've gone under were propped up.


But Japan's deficit spending didn't work - all its economic stimulus fell flat. As economist Barry Elias notes, Japan raised its "gross government debt as a percentage of GDP" from 45 percent in 1989 to 170 percent today" with no real effect.


Companies in both Western Europe and the United States faced the opportunity to raise productivity through the new information technologies that became available in the 1990s. In the US, firms were free to fire workers who became redundant as a result of the new computer systems. In Europe, they couldn't. As a result, the US grew rapidly in the last 20 years while Europe stagnated.


The lessons from all of this evidence is that by helping households stay in their homes, cars, colleges and lifestyles through bailouts or stimulus spending, we're killing them with love and consigning the United States to live in the permanent shadow of a debt overhang that will inhibit consumer spending, corporate expansion and economic growth.

Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.


JWR contributor Dick Morris is author, most recently, of "Fleeced: How Barack Obama and Hillary Clinton, Media Mockery of Terrorist Threats, Liberals Who Want to Kill Talk Radio, the Do-Nothing Congress, Companies ... Are Scamming Us ... and What to Do About It". (Click HERE to purchase. Sales help fund JWR.) Comment by clicking here.



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