It's days like yesterday when the full destructive power of Obanamomics is plainly visible for all to behold.

On Thursday, the stock market lost a staggering 512 points (4.3%), its ninth-worst point drop in history, and over 1300 points in the last two weeks. Gold dropped. The interest rate on 10-year bonds fell to 2.45%. When the stock market, gold, oil, and interest rates all drop together, it's a good bet the market is panicking.

And with good reason:

• The service industry grew at its slowest pace in 17 months in July.
  
• Factory orders dropped 0.8% in June.
  
• Consumer spending dropped in June, the biggest decline since September 2009.
  
• The economy, as measured by GDP, is stalling.
  
• Job growth stalls while layoffs surge.
  
• Mass layoffs are once again in the news.
  
• Moody's put U.S. debt on a negative outlook.
  
• There are increasing chances that the economy will fall back into recession. (Did you even notice the first one ended?)
  
• People are increasingly recognizing that Obama's expensive stimulus didn't work.
  
• Japan is intervening in the yen to weaken its currency.
  
• Switzerland intervened in the Swiss franc to weaken its currency.
  
• Europe intervened by printing money to buy Portuguese and Irish debt.
  

The reality is that there hasn't been a real recovery. Everything over the last two years has been little more than artificial and unsustainable government intervention by way of trillions in deficit spending and trillions in newly printed money.

As I wrote back in June 2009--when the buzzwords were "green shoots" in the economy--Obama's economic policies threaten the economy.

"We're in the middle of an economic experiment. If anything good comes of it it will be the final realization that Keynesian theory doesn't work. Any theory or policy that defies free market forces is as sure to fail as a sand levee holding back the raging sea. It's simply inevitable. In the end the only economically sustainable policy is that of fiscal conservatism. But the current administration might have to crash our economy into the brick wall of reality before it accepts that that reality actually exists."

And now we're there. We tried it Obama's way for years by borrowing, printing, and spending more money than ever before and it hasn't worked. The government has bailed out banks, the auto industry, stolen Chrysler from bondholders, presumed to stimulate the economy with an $800 billion stimulus package, tried to prod auto sales with Cash for Clunkers, endeavored to prevent the housing correction with additional tax credits, and attempted to reduce foreclosures by modifying existing mortgage contracts.

And it all has failed and we're hitting the brick wall of reality.

Then, earlier this week, we succumbed to the the false fear that the debt ceiling was a crisis when, in fact, it wasn't. Rather it was the debt ceiling agreement that represented "a very serious crisis because it will demonstrate that our politicians are incapable of addressing this issue in a serious way." And, since Tuesday when Obama raised the debt ceiling, the stock market has cratered 748 points (6.2%) as markets have realized that our politicians are, in fact, incapable of addressing the issue... and due to the fact that politicians agreed to legislation that created uncertainty as to what and how much, if anything, will eventually be cut. Markets hate uncertainty.

In addition to the uncertainty caused by our own massive debt problems and the possibility of tax hikes over the next year or two, the EuroZone seems to be falling apart, Japan, Switzerland, and the European Union are intervening in their currency and bond markets, and unemployment remains high.

There are so many sources of uncertainty, and those things that are certain (Obamanomics, out-of-control government spending, and printing money) only worry markets more.

Thus it's not surprising to see the markets collapsing as we have the last couple of weeks. In fact, it's somewhat reassuring that the markets have finally recognized the reality of what conservatives have been warning about for years.

The economy and jobs will not truly recover until Obama's unsustainable Keynesian policies are abandoned and the free market is allowed to function on its own.

Until that happens--and until conservative economic policies are implemented--we will see more and more economic problems in American and around the world.

Crossposted: Townhall.com