The Obama administration is clearly in over its head.
Anyone expecting revolutionary proposals to come out of Thursday's joint session of Congress ought to set their expectations very low.
Like all "insane" (the Einstein definition) central planners and policy junkies, the Obama administration appears bent on proposing the same initiatives over and over again in hopes that somehow a different outcome will materialize.
Remember the "cash for clunkers" and "first time homebuyer tax credit" policy scams?
How many of those ridiculous make-work road projects with the "Project Funded by the American Recovery and Reinvestment Act" signs do you estimate that you have driven by in the last couple of years? 10? 20?... More?
What about the nearly $300 billion of Recovery and Reinvestment (remember recovery.gov) funds that have already been doled out to numerous government contractors in hopes of "saving or creating" jobs?
It should be perfectly clear from looking at measures like real GDP (particularly the recent benchmark revisions), the U6 unemployment rate, the length of stay on unemployment and food stamps participation that the Keynsian multiplier effect has been grossly overstated and that our "leaders" have only lead us further down an abyss of economic malaise, insolvency and likely default.
While there are whisper numbers of another $300 billion in proposals to be outlined by Obama on Thursday, you can bet that it will come in the form of more lame ideas and possibly a few temporary tax cuts.
It's important to recognize the point that we have now reached in this epic economic unwind.The Federal Reserve, while bluffing about additional "policy tools", has all but tapped out while fiscal policy has clearly hit a wall with the administration similarly attempting to bluff it's way through to the next election.
So the feel-good proppers and liquidity pumpers have effectively lost all credibility having gained very little traction on the economy at the cost of trillions of dollars and the loss of our AAA credit rating while confidence on the part of the populace has taken a dramatic turn for the worse as a new recession looms on the horizon.
Is a new recession near? Maybe... some sensitive economic indicators seem to signal so but in any event, it's clear that we are worse off and that policy action is fast becoming irrelevant.