The Loud Oink Echos in the Halls of Congress
The only thing that I can imagine being worse than not passing a stimulus package is - passing a stimulus package.
As I sit hear listening to the drumbeat of awful economic news, I am torn between two visions of the future.
In one, a stimulus package is passed and it has the intended effect of providing stimulus to an economy where end demand has collapsed. Never mind that most of us think that living beyond our means, over consuming and funding it with debt is what got us into this in the fist place.
In the other, I have this vision of pouring a huge pile of taxpayer money into giant pig trough. This vision looks a lot like a political cartoon. In it, there are giant pigs standing next to the trough. They are labled, Teachers, UAW, State Government, Greenies, Road Junkies. These pigs are feeding at the trough. Meanwhile, the trough is spilling into a puddle on the ground spreading like an oil slick. It is labled 'wasted spending.'
Got the picture?
Two problems exist. One, having the government allocate this big a pot of money in a hurry is bad. Our government has been captured by those that can afford to invest money in influencing it. This is only those who have a lobbying machine in place already (remember, this is being done in a hurry) and get a return on that investment already by having recieved public funds over the years. See the above pigs. I am quite sure I've missed some.
Two, I thought we decided (outside of the pols and the mainstream media that is, i.e. people who think) that Keynesian economic thinking on stimulus driving economic recovery just didn't work?
Dan Mitchell of the Cato Institute has put out an excellent video that pitches why not. He focuses on the fact that government cannot create wealth to spend, only allocate wealth you and I have already created.
My simple math says that this spending would be insufficant to influence the economy. Even at 825 Billion United States Dollars it would only create - hold your breath for the big moment now - a 5.6% increse in spending in a US Economy that is roughly $14.7 Trillion in final demand. Not enough to change much.
Plenty to change forever the level of money the federal government allocates in the economy.
Even if we should spend, here we are with the washington pols setting up the pig trough so that everyone's favorite pig can slop.
Despite all this, I am encouraged that Obama is sticking to a 280/825=33% alloaction to tax cuts. Not becasue I'm a proponent of small government, which I am, but becasue at least this will be allocated by plain folks and not the pig farmers that roam the halls of congress hallowing 'Sooie' as they cultivate obediant pigs.
I am opposed to the Stimulus package becasue it won't work and it will feed the parasitic pigs that feed on our federal government. I beleive that anyone with an accurate view of reality will be opposed as well.