BYLINE: Peter Morici
President Obama’s strategy to combat the recession courts disaster.
He proposes huge federal deficits from 2009 to 2011 to prop up domestic demand and break the negative feedback cycle of rising unemployment, falling incomes and sinking consumer spending, while recapitalizing the banks to get credit flowing again.
This would require nearly $4 trillion in federal borrowing. Such deficits are unsustainable over the long term. The president promises to borrow less in 2012, when he believes the economy will grow robustly again.
However, these policies do not address the root causes of the recession and will likely put the economy back in the sink.
Three great …