What the world needs now: More government

Obama and Treasury secretary Geithner announced this morning new restrictions on executive compensation at banks receiving government aid under TARP. It was inevitable. With government aid comes government interference, administered by people who couldn't run a bank if their lives depended on it. Or any other kind of business for that matter.

There's no evidence that TARP has made any difference to the economy. Adding new restrictions makes the bailout more complicated without changing its true nature: A wasteful government program intended to fiddle with the economy hopelessly.

The so called "stimulus" package will be similar. The government will spend nearly a trillion dollars it doesn't have, more than a trillion if interest is taken into account. If you get your hands on some of that money then good for you. But there is no free lunch. The dollar will be devalued because more will be in circulation than before. If the borrowed money is ever repaid, it will be repaid by people who are not now living. Chances are, inflation will make the amount of the debt seem small in a few years. If the debt is repaid, it will be repaid with inflated dollars, which is about the only good thing you can say about the "stimulus."

Despite Obama's predictions of catastrophe if the "stimulus" is not approved, there is little chance it will make any difference. The same is true of TARP. You can be sure that government will be bigger after all this spending than it is now.