The Stimulus Was Doomed To Fail « A Voice in the Wilderness

3Dec/092

The Stimulus Was Doomed To Fail

I absolutely believe that President Obama wants Americans to be working more than they are. But who really creates jobs? Can a professor and community organizer in the executive branch? Can any politician?

It isn't that Barack Obama hasn't held enough Job (and/or Beer) Summits, it's that his economic philosophy and policy proposals are inherntly flawed. They won't work. Ever. Not in this world.

As The Heritage Foundation points out, the key thing Americans who support government stimulus packages keep forgetting is that the money does not magically appear out of nowhere.

Congress does not have a vault of money waiting to be distributed. Every dollar Congress “injects” into the economy must first be taxed or borrowed out of the economy. No new income, and therefore no new demand, is created. It is merely redistributed from one group of people to another.

Removing water from one end of a swimming pool and pouring it in the other end will not raise the overall water level – no matter how large the bucket. Similarly, redistributing dollars from one part of the economy to the other will not expand the economy, no matter how much is transferred. Yet that is all the stimulus bill is doing.

The problem is not the people running the White House and Congress these days. It's the ideas, it's their worldview. The only logical conclusions are that they either don't know what they are doing, or are so idelogically committed to increasing the size and scope of the federal government (i.e. socialism, collectivism, etc.).

Take your pick, America.

Remember, there are people out there with real ideas...ideas that have worked in the past and can work again.

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Phillip Sandusky
December 8th, 2009 - 22:17

Obama does not really care about creating jobs. His main strategy is turning our Constitutional form of government into a socialistic form, found couched in his language of “change you can believe in” and “we are going to fundamentally change this country.”

He is set on redistributing the wealth within the United States and from the United States to the developing world. His tactics are creating turmoil and fear on every front so his strategy may be fulfulled. His tactics are not designed to create but to destroy.
Caleb Bennett
December 10th, 2009 - 20:21

The fact that you (the above commenter) are trying to disconnect socialism and jobs shows that you clearly have no idea what socialism is. Socialism is the government ownership of the means of production, with the primary goal of universal employment and equal distribution of resources. To say that Obama is socialist and that he doesn’t care about jobs is self-contradicting.

It’s not entirely true that the stimulus is redistributing money from one area of the economy to the other. We aren’t taking the stimulus from taxes. We’re taking the second option, which is to go into debt. By going into debt, we are not redistributing money across markets, but across time. We are taking the money away from expected future growth and using it to bring ourselves out of the recession. Instead of thinking of it like a pool, think of it more like a sandbox. There are several large mounds of sand in the box, but the rest of the sandbox has little-to-no sand in it. What we are doing is effectively redistributing the sand from the mounds to make a level sandbox. The analogy is a bad one, but I’m sure you get the idea. The goal is to break the cycle of boom and bust so that there are as few disruptions in the economy as possible.

The technique, in a rigid authoritarian government where no mistakes are ever made, would work, though the interest on the debt would lower the net economic growth (ideally speaking, under such a system, there would be no interest). The problem with this idea is that government officials act rationally. By rationally, I mean that they act in their own best interests. For the government to perform the necessary redistribution, it would have to be entirely concerned with the “national interest”, a mythical concept that infers a universal value structure common to all citizens of a certain nation. That would require government officials to act irrationally, that is, to act in such a way that it is not in their own best interest.

Politicians are primarily concerned with maintaining their power. This includes keeping certain interests and constituents happy, which takes money. Of course, said interests and constituents are also rational, and are therefore concerned with their own wellbeing. Basically, there are too many interests involved for a policy of financial redistribution to be effective. Too many hands in the pot serving too many private interests. That’s why we get bills like the stimulus package. In all honesty, that’s why we get all of the bills we have. Politicians are trying to keep their private interests and constituents happy.

This is why government intervention is a bad thing. It is also one of the guiding ideas behind our constitution. The founders didn’t want the type of corruption I just described, and tried to build a set of conflicting interests that would keep each other in check. Of course, the greatest example of this is the electorate, which is composed of as many interests as there are people who qualify to vote. The one problem the founders could not protect against was the ignorance and stupidity of the American public. We have failed to serve our own best interests, and are thereby allowing private interest groups to control the government. The politicians are just representatives of whatever interest group gets them elected. That interest group is supposed to be the electorate. Unfortunately, it’s not.

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