Reuters has an interesting article about how the addiction to bailout money from the government could wind up causing a lot more trouble than it is worth.

U.S. companies, consumers and communities may grow so addicted to government financial help that cutting them off could trigger another recession soon after the current one ends.

Between the U.S. Federal Reserve’s trillions of dollars in lending programs, the $787 billion stimulus package and $700 billion — and counting — in bank bailout funds, no one can accuse officials of soft-pedaling their crisis response.

But there is increasing concern that when the flow of public money subsides — beginning next year when much of that stimulus package is spent — the economy still won’t be strong enough to stand on its own.

Let’s see, we have companies such as AIG and GM who cannot stay afloat without bailout money, but what is going to happen to them when the bailout money is all gone? What happens to them when the government won’t or can’t give them more money? Their businesses are going to fail. They would have failed in the first place without a bailout, so why is the waste of money that is the bailout worth giving them in the first place? To “try and save them” is not going to do any good, because, as the article argues, companies are just going to grow dependent on an automatic, assumed income from the government. There is no motivation to change themselves and make themselves more efficient and profitable independently. So where do we end up? With companies reliant on government money to survive.

The big question on everyone‘s mind right now is just how far will President Barack Obama take the country down the path towards socialism. Congressman Mike Pence, the chairman of the House Republican Conference, thinks the President has already began the journey with great enthusiasm. He called Obama‘s stimulus plan during an interview on Fox News Channel last Wednesday “the European Socialism Act of 2009.“

So is Obama‘s stimulus plan a means by which the government can expand itself? Absolutely. If you read carefully over what the stimulus bill entails, you will find that the expenditures are primarily on government-based projects that will not only be the antithesis to economic recovery, but will also expand government influence. After all, it‘s quite difficult to pull the country out of a slump by doing more of what helped bring it into the mess in the first place: spending too much, too quickly. With every president, we are getting further and further away from what the founding fathers of our nation envisioned for the country.

Let‘s take a step back and look at our own past. We‘ll start with the 19th century. How many economic recessions and/or depressions did we have during that century? We had an incredible amount. They were deep and they were bad. But they were over quickly. Why? Because government intervention did not hamper recovery. Government expansion and spending did not divert money needed in the private sectors to climb out of the economic down turns. Instead, the money was where it needed to be, in the hands of the individuals; in the hands of the people who need it the most.

Fast forward to 1921. Republican President Warren Harding is in the white house when the greatest economic crisis to occur since the early 19th century befalls the nation. Unemployment hit extremely high rates and production declined sharply as the country looked on in horror. What did the President do? Nothing. The economy not only fully recovered by 1923, but the economic expansion that occurred afterwards encouraged by a huge growth of production that was unprecedented and ultimately set off the roaring ‘20s.

These examples prove that the country can not only survive, but prosper under the prospects of genuine democracy and capitalism. Just take a look at the major technological advances made by this country in the 19th and 20th centuries. What do the other, government controlled, countries have to show? Britain quickly learned the lesson in the late 18th and early 19th centuries when its government began to release its stranglehold on its own markets and thereby triggering a global industrial revolution.

We are slowly putting that stranglehold back in place. By the time we see the end of this economic downturn, we will see the government with its grip on most, if not all, industries. Federal rules and regulations, inefficiency and high tax burdens will dominate the economy bringing progress to a halt.

Free market and real democracy are, as of now, a thing of the past however. And with every new bill the President signs into law, we are painfully reminded of it. Some say we should embrace socialism while others say it cannot be helped. I reject both of those statements. The American people need to rally together behind democracy and the free market, not some deified president who is dragging our country ever closer to European socialism.

European socialism. Not American socialism.

That is the way it should stay and in order to defend what so many Americans have died for in the past, when our country was more truly democratic and our markets free, we need to act now. We are not socialists. We are free-thinkers, individuals and entrepreneurs. We must hold on to the idea of capitalism through perseverance and personal responsibility. That is the American way. Let‘s rally as true Americans: behind real democracy and real capitalism.

The original article was written for Despotic Democracy and can be found here.

You know, I don’t understand why politicians feel like they have to meddle in every situation that occurs. There are some places they really should just keep clear of and the economy is one of them. Yes, I know they are trying to prevent an economic meltdown and ultimately a recession (or let’s face it, that should be depression). Yes, I know they are trying to prevent the unemployment rate from plummeting. But I also know that whatever they do is going to result in one or both of 2 things: it’s simply not going to work and the government will have wasted tax payer money frivolously, or they will have succeeded in spreading government power and influence drawing us ever closer to a socialist state.

No matter the result though, the government is going to use money it does not have. The national debt will continue to grow as they borrow more money from abroad or by issuing bonds, or they will print more money causing the value of the dollar to rapidly decline. Those are their only options.

I really must say that it would be very much appreciated if they would just let the free market work. We will have our ups and downs and they can be potentially bad, but we will have those whether the government intervenes or not. Not to mention government involvement will only exacerbate and prolong the problem. Instead of solving it now, we are just going to pass the problem down to our kids and their kids and their kids and so on.

According to the BBC:

Senior Democrats in the US Congress are considering backing a huge economic stimulus package to try and steer the country clear of recession.

Nancy Pelosi, speaker of the House of Representatives, said economists were suggesting a package worth “several hundred billion” dollars was needed.

During the US election campaign President-elect Barack Obama pledged to pass a $175bn (£118bn) stimulus plan.

No, we don’t need another stimulus package that isn’t going to work. The first $700 billion stimulus package didn’t do any good whatsoever. Nothing has improved and nothing has changed. In fact, things have only gotten worse! Why, then, do we need another one? Why does Obama feel the need to waste tax payer money on useless stimulus packages as one of the first things he does in office? That isn’t the change I want.