Just as a Ponzi scheme relies upon successive victims to temporarily sustain it before inevitable collapse, Obama’s stimulus bill was of such magnitude that repayment by successive generations may prove similarly impossible.

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“America continues to move from Keynesian to Ponzian economics.” 

So said former chess champion Garry Kasparov in his February 13 Wall Street Journal commentary.

Kasparov’s observation was particularly timely, since this week marks the one-year anniversary of Barack Obama’s $787 billion “stimulus” bill.  Although a former Soviet icon and now a pro-democracy activist in Russia, Kasparov may have captured the essence of Obama’s massive stimulus boondoggle more cogently than any domestic observer. 

The term “Keynesian,” of course, derives from early-20th century economist John Maynard Keynes, whose theory asserted that massive centralized government spending and economic intervention constituted the conduit to economic growth.  The movement was ultimately discredited by Ronald Reagan’s supply-side revolution, which triggered the greatest burst of economic expansion and prosperity in human history by reducing government intervention and taxation – the opposite of Keynesian theory. 

Despite that lesson, Obama and the Pelosi-Reid Congress convinced themselves that the laws of economics had somehow been suspended, and decided to give Keynesianism another try following the 2008 elections. 

Unfortunately, as noted by Kasparov, Obama’s incarnation unleashed such enormous amounts of unsustainable spending that it came to resemble a Ponzi scheme more than conventional (albeit anachronistic) Keynesian policies.  Just as a Ponzi scheme relies upon successive victims to temporarily sustain it before inevitable collapse, Obama’s stimulus bill was of such magnitude that repayment by successive generations may prove similarly impossible.  

Obama and Vice President Joe Biden, of course, predictably claim that the bill has been a success even though it piled another $1 trillion onto the already-crippling deficit with no obvious benefit.  Undeterred, Obama flipped his teleprompter’s hyperbole switch to the “on” position this week, saying, “we have rescued this economy from the worst of this crisis.” 

Joe Biden, apparently convinced that the believability of his utterances is directly proportional to the degree to which he stresses the words and grimaces as he speaks, insisted “it’s working – it’s WORKING.” 

Of course, this is the same Biden who once said in a public speech that Obama’s economic agenda boils down to a focus on, “as Barack says, the three-letter word:  jobs, j-o-b-s, jobs.”  Whether it is indeed Obama or Biden who has difficulty counting to four is an interesting question, although Obama’s embarrassing campaign statement that he’d visited 57 states might render him the prime suspect. 

Biden’s notorious gaffe aside, do the cold, objective facts support the Obama Administration’s claim? 

Well, among Obama’s remarks at the stimulus signing ceremony in Denver, Colorado, he promised, “today does mark the beginning of the end.”  At that time, his administration also promised that the bill would prevent the nation’s unemployment rate from surpassing 8%. 

Since that date, however, the nation’s unemployment rate quickly surpassed 8% and even 10%, and now remains mired at 9.7% with little improvement expected anytime soon.  Accordingly, the stimulus has failed to achieve Obama’s stated goal of capping unemployment below 8% and marking “the beginning of the end.” 

Additionally, Obama claimed during his signing ceremony that the stimulus bill was “put together without earmarks or the usual pork-barrel spending.” Even more astonishingly, he added that it “will be implemented with an unprecedented level of transparency and accountability:” 

“With a recovery package of this size comes a responsibility to assure every taxpayer that we are being careful with the money they work so hard to earn.  And that’s why I’m assigning a team of managers to ensure that the precious dollars we’ve invested are being spent wisely and well.” 

Well, that didn’t work out as promised, either.  Notoriously, stimulus dollars were directed toward non-existent zip codes and Congressional districts, which hardly constitutes “being careful with the money they work so hard to earn.” 

Most fundamentally, however, Obama and Biden must explain the fact that only one-third of the $787 billion stimulus bill has actually been delivered one year later.  Of that one-third, moreover, most went to government programs and state bureaucracies, rather than such options as private-sector jobs or “shovel-ready” infrastructure projects. 

Given America’s gigantic $14 trillion economy and $1.4 trillion 2009 deficit, Obama cannot coherently explain how an additional $300 billion in stimulus spending on government bureaucracies somehow “saved America from the next Great Depression.” 

The fact is it did no such thing.  One year later, the stimulus has merely taken dollars from the private economy as part of a giant Ponzian shell game. 

Unfortunately for future generations of Americans, this Ponzian scheme must also eventually come crashing down.