Please don’t stimulate my economy…

Country Politician - George Bingham

In my other recent blog, In Defense of Capitalism, I argued that increased government activity would exacerbate this crisis. I argued that, in the long-run, investment will fix itself. As I read the news, I hear good and bad things. I cringe when I hear that the government is going to spend $850 billion for a stimulus package. But, I am encouraged when Barack Obama wants to cut taxes to stimulate the economy. I fear that government spending, on this scale, is bound to be inefficient and may makes things worse. But, I also know that tax cuts tend to stimulate economies in the long run. When people can spend their own money, they tend to benefit an economy. Money is invested wisely, looking for returns. The government is a bureaucratic mechanism that is extremely slow to work. When it does finally work, it tends to lend and trade favors not always for the social economic good. Governments tend to overspend on shotty merchandise. You need only look at the J. Edgar Hoover building to see how poorly the American government spends its citizens’ money. What makes you think they will use $850 Billion any wiser?

Rebate Check

There should be little doubt at this point that our economy is hurting. But, what does this mean? Besides the obvious fact that many Americans are now out of work, or looking for work, there is the predictable backlash against some scapegoat. Our economic woes aren’t our fault, they must be someone else’s. I recently received this email that perfectly illustrates what I’m talking about:

As you may have heard the Bush Administration said each and every one of us would now get a nice rebate. If we spend that money at Wal-Mart, all the money will go to China. If we spend it on gasoline it will all go to the Arabs, if we purchase a computer it will all go to India, if we purchase fruit and vegetables it will all go to Mexico, Honduras, and Guatemala, if we purchase a good car it will all go to Japan, if we purchase useless crap it will all go to Taiwan and none of it will help the American economy.

We need to keep that money here in America, so the only way to keep that money here at home is to buy beer, since those are the only businesses still in the US.

Old MacDonald had a Farm Bill

It looks as though the more people talk about change in Washington, the more things depressingly stay the same. The House overrode President Bush’s veto last night with an impressive majority (316 to 108 ) on the 2007 US Farm Bill. The Democrats are talking about feeding the poor and self-sufficiency, while the Republicans are (suddenly) taking the fiscally conservative opposition. Farm bills seem to have been part of the American landscape as long as most people can remember. Their wasteful subsidies skew crop prices and protect farmers from competing with world prices. It began as a means of fighting the Great Depression (wasteful then), but has evolved into an ever-hungry beast. Many rural folks and their politicians would have you believe that without subsidy, farmers wouldn’t be able to produce sufficient crops nor could they feed themselves or their families without it. That hogwash may have worked when food prices were low, but now is the worst time for farmers to have their pockets padded.

Poverty and the Politician

So I see that John Edwards has finally hopped off the fence and picked a candidate. It seems like he was waiting for a winner to become apparent before making his endorsement. As I laid in bed, suffering through Edward’s speech, my ears perked up when he mentioned poverty. The main reason he is supporting Barack Obama is because Obama plans to cut poverty in half within ten years. Those words seemed to echo of Lyndon Johnson’s ‘Great Society’. Those words sent shudders through my body; not because I favor poverty, but rather I fear the means used to eliminate that poverty. If there is one thing the state can never do, it is eliminate poverty.