Stop Spending

Every weekday morning while wrestling my bowl of cinnamon flavored oatmeal, I am monitoring the financial markets with the gang on CNBC's Squawk Box, sick twisted freak that I am. There have been some historic moments on Squawk, most notably with Rick Santelli's shout heard round the world , and the discussion today was along those same lines as America has a choice to make. Take a listen:



Although Joe Kernen and Rick Santelli have fun slapping Steve Liesman around, the choice America has economically is between the Keynesian economic theory regrading the issue of governmental stimulus in the marketplace (Obama) versus the supply side theories of very limited governmental intervention by lowering costs of production and helping to lift the entrepreneurial spirit of free market capitalism, which then trickles down benefiting everyone (Reagan).

New York Times economist Paul Krugman is in the forefront of those promoting the Keynesian theories, and recently wrote that due to a failure to spend enough, the United States is preparing to enter a third depression. Investors Business Daily takes him to task on that thought.

One of my readers alerted me to a piece blaming George W. Bush for all the deficits we are now experiencing. While the Bush administration did expand the deficit, due primarily to events in the aftermath of September 11, 2001, it is the current policies of governmental interference, in the form of increased regulation and taxation, the assault on small businesses across the fruited plain and the uncertainty of the playing field going forward that has hindered investment, placed meaningful growth in a stranglehold and exponentially bloated the federal deficit. In fact, the governmental stimulus in the public sector further crowds out private investment, where most of the jobs are created.

Explaining the poor decisions the current administration is making is Robert Mundell and Art Laffer, who joined CNBC's Larry Kudlow recently for a frank discussion.

The Obama administration has engaged in a level of governmental stimulus never before seen, and our economy has little if anything to show for it. Foreign countries that engage in this type of socialist activities have run out of other peoples money, causing the civil unrest we have witnessed. Uncle Sam will be dealing with these same issues if we don't change course quickly.

There are a few politicians emerging that understand the severity of the issue, including New Jersey Governor Chris Christie (R) and Wisconsin Representative Paul Ryan (R). For our economy to improve, outside of a sweeping change in November, the government should do just as Rick Santelli suggested, and that is to stop spending immediately.