The Neo Deal? The Big Deal? The Raw Deal?

Congress has passed the stimulus package. The Washington Post notes that it is much larger than Roosevelt’s attempt to pull us out of the Depression:

The New Deal of the 1930s equaled no more than 2 percent of the nation’s gross domestic product. The new legislation represents over 5 percent and is probably no more than an opening bid — Obama and his congressional allies will next turn to the foreclosure crisis, the reform of financial markets and an overhaul of federal budget practices.

One of the most liberal Democrats in Congress celebrated the victory of his ideology:

“I think we need to appreciate that the bill is the largest change in domestic policy since the 1930s,” said House Appropriations Committee Chairman David R. Obey (D-Wis.).

Comments the Post: “The legislation represents the start of a new ideological era that places the federal government at the center of the nation’s economic recovery.”

The era of small government, such as it was, is over. Big government is back with a vengeance.

We are in uncharted waters. Worries about deficits assume old-school economics. We are embracing “fiat money,” assuming that since value is relative and arbitrary we need no gold standard or now even labor standards; rather, the state can impose the value of our medium of exchange as an act of power. (Note the postmodernism of all of this: What we have done to truth we are now doing to economics.)

Will this work to restore prosperity, or will the iron laws of economics in all of their objective truth assert themselves? We’ll see.