Government Stimulus Causes Kitchen Warming
Do you believe you can cool your kitchen by opening the refrigerator door? Please tell me you know better.
Sure, you’ll get a cool spot just in front of the fridge, but overall you’ll be heating the kitchen with all the heat being pumped out the back. Come on, everyone knows that. Then why on earth are there those who believe that you can stimulate an economy by using tax money to create jobs?
When a government taxes to create jobs, it reduces the output of the nation by much more than any industry it could possibly create with that same capital, (even if they were efficient).
Government can be wonderful and is certainly necessary to coordinate our interstate infrastructure and protect our nation globally. However when it comes to the economy, it can only do harm. The government is not the brains of our nation. God help us all if it becomes that. It does not need to regulate the economy any more than you would want to consciously control your heartbeat. Good grief!
So why would any right minded American want to put our economy in the hands of the most inefficient bureaucracy possible? The design of our government is remarkable, however there is no design that can eliminate the “mission creep” that has grown our Federal Government so out of proportion.
The larger the government the larger the tax burden on industry. Therefore the goal of government should be to remain as small as practical. From the point of view of being responsible for the economy, our government has decided to take more and more control of our economy and look what it has created.
We hear so often that the housing bubble crisis was a result of government deregulation, when in actuality it was directly due to government regulations requiring banks to lend to low income, “subprime” customers. The last thing banks want to do is lend to those who may likely default. However the government included incentives and guarantees that make it lucrative for those banks. Naturally compliance became universal. It seemed like a nice thing to do, so the less fortunate can live the American dream of home ownership. The reality is that the government was not running the risk, it was the tax payer and all the home owners (same folks) via the cost of those incentives, the risk of payment for defaults, the risk of home devaluation, and a big bailout cost; not to mention the inflation that was caused by the creation of capital by the Fed to do so.
Another supposedly unintended consequence was the rapid inflation of home prices that made it more difficult for the less fortunate to purchase a decent home even before the bubble burst. Now, lending is so regulated and banks are so paranoid that borrowing for either home purchase or industrial investment has become unreasonably difficult. This causes nothing more than more depression and unemployment, thus more defaults and tighter lending. Jobs move overseas, and so on. The answer has been more government help and regulation by the very people who got us into this mess by doing the same things they are doing to try to get us out, (see Frank – Dodd). Holy crap!
When your risks are managed by those who are not held accountable, suffer no consequences, have no responsibility, and even reward themselves for their folly; there should be no surprise at the outcome. It is your property, your taxes, and your risks all in the hands of those who need money to become reelected.
They make money when there are problems and loose when the problems go away. That just might be why they are so much better at building problems than solutions. They’ll build you electric cars to keep from polluting without mentioning where all that electricity is going to come from to charge them. They’ll make you use “efficient” lightbulbs that are themselves a hazard to dispose of, and such a hazard to produce that they’re made in China. Next, they’ll build you new refrigerators without doors to counter global warming.