Let's tie Obama's hands behind his back, then bludgeon him on "weak" job numbers

[girl gone mad]

141. In context, the statement is even worse.

I know that people like to hear these platitudes and they want to believe in the confidence fairy and all, but when our nation's prosperity is on the line, it's essential that our leaders know how economies really function. Based on Obama's statement and the context you provided, he doesn't have the first clue, and that's extremely disturbing.

At the time Obama gave this speech, we were still dealing with the fallout of global economic collapse caused by excessive credit creation (unsustainable private sector debt). Economists have understood for well over 100 years that the only way to reverse the effects of a massive private sector debt deleveraging event such as this is for the public sector to spend. That's the reason virtually every industrialized western nation has automatic stabilizers and at least modest safety nets in place.

The line Obama was pushing here is pure bunk. The private sector was contracting at an alarming pace. The Federal Government, as the sole issuer of our sovereign fiat currency had precisely one role to play in the crisis. That is to be the main engine for our recovery. The private sector cannot create money. If we were operating under policies that promote trade surplus, it might be possible for the private sector to grow on its own. Under our current system which encourages dollar reserve, trade deficits and asset bubbles, it simply would never happen.