RUSH: We got a great question here on the phones. It is from Patricia in Barstow, California. I’m glad you called, Patricia. What is your question?
CALLER: Well, Rush, we all know that government spending can’t pull us out of a recession. But we say… Worse, everyone knows that World War II pulled us out of the Great Depression. But didn’t government spending on all the resources we needed to prosecute the war, was that what did it or was it something else?
RUSH: No, I’ll tell you why this is a great question because it points out something very important. It allows me to point something out very important. The New Deal, which Obama is trying to recreate here on an even grander scale, had no impact whatsoever on ending the Great Depression. In fact, some people say — before we even get to World War II, now, Patricia — that the spending of the New Deal seemed to lower unemployment when FDR put a ton of people on the public relief and public jobs roll. However, you need to ask the question: Should we count people receiving welfare checks as employed? Even if they are licking a stamp now, if that’s all they’re doing or if they’re mailing things out from an office — and even at that, even with all of his spending, unemployment was at 14%, Patricia, when the New Deal part 2 took effect and the true downward trajectory was realized when the war started. Now, why is that? And that’s your question, right?
RUSH: Okay. What did FDR spend his money on and what is Obama spending federal money on right now?
CALLER: Well, make-work jobs that don’t actually produce anything, don’t create any wealth.
RUSH: He’s not even doing that. There hasn’t been a job created because of what Obama did. Evan Bayh just admitted it. There hasn’t been one job created in the last six months by the government. Not one. There hasn’t been a job created in the private sector.
CALLER: Right. There hasn’t been a job in the private sector created but they created jobs in the public sector.
RUSH: No, what they’re doing is ‘saving’ jobs at the state level. Most of the stimulus money has gone to protect union employees at the state level and at the city level. The money has been used to help the states delay the day of reckoning on their bankruptcy, because of their deficits. Now, in World War II, federal spending was in the private sector and it was building things. It was building the armaments of war. It was building ammunition. It was building guns, airplanes, boats. The country was on a full-fledged war footing, and products were being produced. There was actual merchandise being made. People were being paid for making things. There was genuine productivity. The gross domestic product was ratcheted up because we were at war. The GDP is not affected by the kind of spending that FDR did in the New Deal or by what Obama is doing because we’re not building anything. We’re not making anything. We’re not producing anything. We’re simply giving money to selected union Democrat officials and state governors to forestall their day of reckoning. So war spending like we were engaging in to the extent that we did in World War II, was a unique circumstance. We cannot pretend that we’re at war every time we get into a recession and start funding the way we did in World War II. The government cannot create jobs in the private sector during the normal ebb and flow of daily life in America. FDR proved it with his New Deal 1 and 2 and Obama is proving it now. No goods being produced. The GDP is not growing the way it should. GDP equals CIG, and the way to understand this —
RUSH: Well, you’ve heard me explain that.
CALLER: Right. (garbled) Yes.
RUSH: There is no consumption going on (that’s C), there is no investment going on, but there is massive growth of government going on. So all of this spending is doing nothing but propping up a bunch of Democrat Party union allies and governors in various states around the country, for a little while. They can’t do it forever. Chris Christie. We’re going to get to his speech, his State of the State Speech. This guy, I hope he’s got a great security detail because he told them what-for. His state is on the verge of utter bankruptcy if he doesn’t do some serious cost-cutting and program cutting, and he announced that he’s going to do it and he’s going to do it with executive order because he’s working with a Democrat legislature. He’s gonna cut as much as he can on his own. Does that answer help you or do you still have some lingering confusion? How can I explain it better?
CALLER: Well, Rush, just to make sure I understand you. By that logic, theoretically if the government spent money on producing things — say even actually building infrastructure — then the government could incent or cause recovery in the private sector. But the facts are that by the nature of government, government doesn’t do that except in extraordinary circumstances, like World War II —
CALLER: — when they were forced to.
RUSH: Yes, ’cause the nation’s security was at stake. The problem is, we’re living under a bunch of false premises. The infrastructure of this country is not falling apart. Everybody wants to say we are. We had one bridge collapse in Minneapolis, and ‘the infrastructure is falling apart!’ The things that are falling apart in this country are the things run by liberal Democrats: The school system — and I’m not talking about the buildings. I’m talking about the actual thing that goes on in the buildings. Our education system is nothing but corruption. Any effort to privatize education with vouchers, even to benefit minority kids, is cut by Obama because the fealty is totally to unions.
RUSH: We don’t have a glaring infrastructure repair need as evidenced by the fact that no infrastructure rebuilding is going on. All of this is a giant myth. Everything about this stimulus bill was premised on totally false things. That the country’s falling apart here. We got shovel-ready projects to get going here. None of it is happening. It’s all make-work, and the make-work stuff is obviously, by definition, not necessary. So it’s just busybodies running around, and it’s not even that much going on. This is just a transfer of wealth from producers to non-producers. It’s just simply the redistribution of wealth disguised as ‘rebuilding the infrastructure’ and ‘rebuilding our schools’ and so forth. Let me tell you what I just read. There’s a story, I think, in the Washington Post today. The DC mayor has asked residents to get out there and shovel the roads themselves; get out there and shovel the sidewalks themselves. The city can’t handle it.
Now, how much do you think the people that live there are paying in taxes for just this kind of thing? Twenty-five percent of the snowplows are broken down and unusable, and now the mayor’s asking people to get out there and shovel it? Now, I’m not against people getting out and shoveling sidewalks and so forth, but people are paying exorbitant taxes all over the country for this kind of thing to happen. Now, where’s the money going if the snowplows are not operating and if there aren’t sufficient personnel to handle these kind of weather circumstances? Where’s the money going? I’ll tell you where it’s going, it’s going to protect people that raise money and donate money to Democrats and vote for them in great numbers and get other people out to vote for them. There’s nothing of any true economic benefit at all from any of this $1 trillion slush fund that Obama set up. But there was tremendous economic benefit when we funded the war — and, by the way, the difference in World War II was we still had private sector companies building the airplanes. This was the defense budget. This is something constitutionally required. This was not the government overstepping its bounds. This was FDR moving in and defending and protecting the country and the Constitution, which is a constitutional obligation under the Oath of Office that he swore. There’s literally no comparison. The closest comparison we have is to New Deal ` and New Deal 1 with what Obama is doing, and even at the beginning of New Deal 2, we still had 14% unemployment in this country. Ten years after the Great Depression.
CALLER: I’m aware of that.
RUSH: Well, I don’t care. I’m not trying to insult you with this.
RUSH: I’m just saying trying to be clear in my answer because it’s a great, great question. Because there are a lot of people who do think that there have been times in the past where government spending has in fact revived an economy, and those are emergency circumstances. It’s something that can’t last in perpetuity — and, remember, it didn’t.
RUSH: We didn’t conclude after World War II that the best way to run the private sector was for the government to run it and to keep deciding what gets funded and what doesn’t, because politics was playing no role here. The necessity of building the armaments and machines of war to defend and protect the country — and everybody in this country being on the same page with a minor, minor percentage exception — all joined the effort. Rosie the Riveter and all of that.
RUSH: I will go out on a limb. I’ll go out on a limb and say the evidence throughout American history is clear: There is not one instance where anybody can find for me that this kind of spending — New Deal kind of spending, Obama stimulus kind of spending — expands the American private sector, which is what produces wealth in this country. Obama doesn’t even understand that — and if he does understand it, he resents it and is trying to see to it that the private sector is deemphasized. What is going on as a result of this man and his administration is hideous. Glad you called, I really am.
RUSH: That was really a great question from Patricia out there in Barstow, California. And I want to add a couple things to this related to government spending versus private sector economic activity. When the government spends — and we see the evidence of it right now with Obama — what is the objective, what’s Obama’s spending objective? Snerdley, take a wild guess? What is Obama’s spending objective right now? It is to cripple the US. Well, his stated purpose is to end the business cycle so there’s no ups and downs, to take risk out of it. I believe his real purpose is to destroy it and replace it with the government being the sole place anybody turns to for anything. But more specifically, if that’s a little bit hard for you to get your arms around, more specifically, when the Obama government spends, the objective is to make sure that their party members, union members particularly, make sure they keep their high wages, that they don’t lose any ground in their pension or their health care benefits no matter what the economic circumstances are in their businesses or in their states.
There is nothing market driven about Obama’s spending, and that is the key. Every decision that Obama is making on spending is political. And when it’s political, it is for his and his party’s benefit. Health care is not about you. Health care is not about improving health care. It’s about improving the Democrat Party and helping the Democrat Party. There are no rational business decisions being made because there’s nobody in the Obama administration who’s ever been in business in the private sector, not one! Not one of the czars, not one of his cabinet secretaries has ever met a payroll. They are all academicians, theoreticians. In World War II specifically, we were making things that were needed. We were making things that were desperately needed to defend and protect the country. The New Deal wasn’t about that. There was nothing desperately needed that the New Deal was tackling. The New Deal was just like Obama’s spending; it was to enrich Roosevelt and the Democrat Party.
Is Obama spending making anything anybody wants? Nobody wants windmills. The windmills that we have spent money on are leaking fluid and they become refuse and waste in places like Hawaii. Shovel-ready projects. We’re supposed to get shovel-ready projects last year. We didn’t get any of those. We’re not getting anything anybody wants. We’re not even getting jobs with this slush fund. Now, when the Nazis and when the Japanese were overrunning the world, there were a lot of people that wanted tanks. There were a lot of people that wanted airplanes. There were a lot of people that wanted guns. There were a lot of people that wanted bombs. There were a lot of people that needed tanks, there were a lot of people that needed airplanes, there were a lot of people that needed bombs, and there were a lot of people that needed guns and there were a lot of people that needed petroleum. Need. Market oriented need versus public sector spending, which is purely a political calculation.
You’re being lied to so profusely, you’re being told the purpose of this spending is to create jobs, and here goes old Evan Bayh letting the cat out of the bag saying there hadn’t been one government job created by Congress in the last six months, make it the last 13. It’s just silly. I can understand people making the comparison, and we do have a lot of people in love with the notion of government as a protector, as a benefactor, as an equalizer and so forth, but it depends on who’s in charge of it. And the people in charge of government right now have only one interest, and that’s themselves and their party and their power. And for them to acquire power, folks, we all have to lose a little liberty. For them to acquire power we have to lose a little freedom or a lot, depending on how successful they are. They’re not about helping us. They’re about helping them. I defy anybody to point me into one direction of any Obama agenda item and you tell me where it’s helping the country or helping individuals, other than public employee union people and Democrat governors. You tell me where it’s helping the private sector of this country.