Econstories.tv rap Hayek vs. Keynes: Fear The Boom and Bust - http://www.youtube.com/watch?v=d0nERTFo-Sk

In Fear the Boom and Bust, John Maynard Keynes and F. A. Hayek, two of the great economists of the 20th century, come back to life to attend an economics conference on the economic crisis. Before the conference begins, and at the insistence of Lord Keynes, they go out for a night on the town and sing about why there’s a “boom and bust” cycle in modern economies and good reason to fear it.

Neil Barofsky, the special inspector general overseeing the Troubled Asset Relief Program that began under President George W. Bush, and was expanded under President Barack Obama, states in his Quarterly Report to Congress:

“It’s unrealistic to think we’re going to get all of that money back.”

“Despite the aspects of TARP that could reasonably be viewed as a substantial success,” he wrote, “Treasury’s actions (i.e. ‘Treasury’s refusal to require TARP recipients to report on their use of TARP funds, its less-than accurate statements concerning TARP’s first investments in nine large financial institutions, and its initial defense of those inaccurate statements’) have contributed to damage the credibility of the program and of the government itself, and the anger, cynicism and distrust created must be chalked up as one of the substantial, albeit unnecessary, costs of TARP.”

The Treasury Department has spent more than $454 billion. Of the $454 billion only $73 billion has been paid back, while $317 billion remains outstanding.

Source: Yahoo! News and SIGTARP

The Center On Budget and Policy Priorities report, Where Do Our Federal Tax Dollars Go? , has recently been updated (Compare to last years chart). The report breaks down how the Federal Government spent $3 trillion in fiscal year 2008. The big tickets remain:

• Defense and international security: 21 percent of the budget, or $625 billion
• Social Security:  21 percent of the budget, or $617 billion
• Medicare, Medicaid, and CHIP: 20 percent of the budget, or $599 billion. ($391 billion went to Medicare)

Peter Schiff in The Devil We Know is dead on with his comments that we will not experience change if we leave those individuals in leadership positions who  were responsible for creating the problem in the first place.

Bernanke’s re-nomination is a politically safe decision for President Obama, and at least Bernanke is a devil we know. However, this lack of a ‘change’ for the better should squash any ‘hope’ for a genuine recovery. If the Bush years were as bad as the Democrats claim, then it is curious that they are mimicking and magnifying the same mistakes. No one has been held accountable for a financial crisis that the professors, pundits, and politicians told us would not come. All the same players are running the game, always changing the rules so they stay on top. Real ‘change we can believe in’ would be a return to our roots in the rule of law and a system of sound money – but it’s hard to stay grounded when you’re throwing money from helicopters. (emphasis added)

Here’s to some new blood and some old ideas.

“A recession (or depression) ends when GDP returns to (or near) its trend line.”

Richard Posner,  with the  clearest answer I have heard on the subject.