the other side of the coin...

what could be wrong with a government stimulus designed to employ people, build infrastructure, and get the economy out of a recession? well just as there are two sides to a coin, there is also a flip side to any money a government proposes to spend, that's what. clearly for those in a direct line to receive the stimulus money there's an immediate benefit. with the income they're able to make purchases and support themselves, which in turn will benefit those businesses and people they patronize. so far so good, more jobs and people consuming again, where's the trade off?
in order to understand the ill effects of government stimulation we need to recall the source of the government's ability to stimulate: taxes. taxes imposed on other citizens and businesses who's income and purchasing power are proportionally reduced. in the best of cases the net effect would be zero, what is taken from one in the form of taxes, is given to another as a "stimulus". no net increase takes place, we are simply removing it from Peter in order to pay Paul. of course we aren't in the best of cases, and 100% of the levied taxes do not pass directly to the "stimulants", rather the government itself takes a piece in order to provide for it's own expenses. real money actually leaves the economic system!
worse yet is what is presently being done: taxes are not being increased to pay for the stimulus. the money is coming from the printing press and ultimately debt issued by the government. those saddled with the burden of paying our debt will be our children and our children's, children. it's like giving money to Paul and expecting Peter's kids and grand kids to pay it back! we are making it a little easier on ourselves and sticking our posterity with the bill.
so why do it? the simple answer is it's easier to ignore the ramifications of our present actions than to suck it up and deal with the problem now. politicians aren't elected when they talk about difficult decisions, as a nation we elect legislators who promise to give us something for nothing!
like most things that sound too good to be true, the governments ability to "fix" an economic recession is dubious. even if it worked (which it doesn't) the citizenry payed the bill not the suits in washington.
i'll finish with a quote from Thomas Jefferson, "If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy"


-joe

obviously you don't understand...

i found this on bencasnocha.com apparently there are others having difficulty understanding how re-inflating the credit bubble is a solution to our economic woes.

this is how Ben introduced the video to his readers:
"Congressman Peter Stark (D - California) represents all that is great about American politicians: humility, wide-ranging and mature vocabulary, and a genuine warm-heartedness towards those interested in political issues.
Take his must-watch interview with libertarian Socratic Dialogue devotee Jan Helfeld discussing the national debt. Congressman Stark, tripped up after saying that a country's wealth increases as its national debt increases, tells the interviewer to "shut up." He then tries to end the interview by telling Helfeld to "get the fuck out of here or I'll throw you out the window."

-joe

"

so that's the problem...

While listening to a podcast some time ago I heard the following comment: "the economy is suffering from a global savings glut", what struck me as odd was the use of the terms suffering and savings in the same sentence. I can think of many things I (we) suffer from, but a savings glut is not one of them. As I began to ponder that statement a few thoughts stuck in my mind:

• America doesn't save so our suffering must be limited to the effects of other nations saving.
• if we are in fact suffering because other nations saving their money, why?
• aren't we supposed to "save for a rainy day"?

I came to the conclusion that saving is only bad if your entire economic system is based on the expansion (artificial inflation) of money and credit (which ours is), but this is only partially true as someone will eventually benefit from all the spending and end up accruing some savings. In fact this does happen and it has a name: The Cantillon effect after economist Richard Cantillon. It turns out that the people who get the newly minted money and credit first are disproportionately benefited over those at the bottom of the barrel, in other words inflation hasn't set in for the first few recipients of the money (typically the politicallly well connected), however by the time the average citizen receives the money prices have already increased and at best any raise that may come from inflation will be to break even with the already inflated costs. Either the leadership of our country has been incredibly stupid the last 80 years or it was known that through the artificial expansion of credit and money supply, an increasing number of people would become dependent on the government. As it stands right now the primary political parties have no incentive to make the necessary long term corrections, especially if the citizenry remains largely ignorant.

The time for action is at hand, being a passive citizen will no longer suffice. We need to:

1. Learn. Education leads to awareness.
2. Share. Contribute to the knowledge of others.
3. Unite. Together we can stimulate change.
4. Act. 1-3 are irrelevant unless something happens.

-Joe

inaugural Address

To the people of America. For too long now we have allowed politicians and special interest groups to steer our country into oblivion. The time is at hand to wake up, take responsibility, and demand accountability from our elected officials.

At it's current rate our federal deficit will broach the TEN TRILLION dollar mark before the end of 2008.

What does this mean to you?

It means that if significant changes are not made immediately, the future of our nation is at risk.

In the Revolution Tavern there are no republicans or democrats...liberals or conservatives... only Americans. Citizens concerned with the direction of our country. This is no place for rhetoric or slogans, only intelligent debate.

Through education, dialogue, and discourse, members of the Revolution Tavern plan to alter the course of a nation. Just as our Founding Fathers convened to hatch the bold ideas that formed the foundation of our country, we take up the task of restoring the ideals that made us great.

So come, join us for a cold one and discuss the restoration of a government that is by the people and for the people.

In other words: complacency must die.

-Joe and Brian