A Failed Stimuli Analogy

The brilliance of the democrat party is the ability of their mouthpieces to broadly apply the typically incomprehensible machinations of big government logic into effective sound bites applying nonsense that somehow seems similar to day-to-day activities. If the world was just this shell game administered by big government types would be dismissed as laughable. Unfortunately, big government has been winning for so long that the federal government is utterly confounding to most citizens and because of that it’s easier to conceptualize its unnecessary largess by talking point.

Recently a friend and successful small-business owner intoned on how perfectly logical the idea of the government’s stimulus was. The way that he understood it was as analogous to a slow month for his business necessitating some purchases on credit card based on the idea of building future business. And that was exactly how the failed stimulus was sold but never could have worked.

The reason is that the government only consumes. It does not produce anything that is actually demanded by actual consumers. There are certainly ‘entitlements’ and ‘benefits’ but as their names describe, they are demanded by beneficiaries that do not pay for their use. They are paid for by the government taking (in the form of taxes) from citizens who mostly do not consume or demand these ‘entitlements’. Because they are ‘free’ to those who consume them the demand for so-called ‘entitlements’ is often much greater than supply and to provide for more demand those who do not consume these ‘entitlements’ must be taxed even more.

The stimulus was meant to make large capitol purchases and to fix useful government offerings such as roads which in theory require people to do things that they are paid for and then in turn they would buy things after being paid. Bam, economy stimulated. Even better, democrats told us that not only would those who were paid would buy things, but that others would be motivated to spend by their spending resulting in a ‘multiplier’ effect where the economy would somehow magically grow at a rate greater than the money spent by the government.

Problem was that the stimulus was temporary and unsustainable. The new employee might not want to spend that money too quickly knowing that they’ll likely to be out of a job once the stimulus ended. And those businesses augmented by the spending also knew it was temporary, why would they invest in anything knowing that once complete with stimulus work future projects may not be there? Worse, much of the funding was used as stop-gap measures in state budgets, allowing them to avoid deficits by allotting those funds to existing debt where it did nothing useful.

An artificial infusion of cold-hard cash into the economy may provide a sugar rush but in the end that money has to be paid back sometime and those whom are taxed most acutely understand that they and future earners will be on the hook. Whereas my friend understands the business that he is in and can effectively plan for ways to grow his business by spending, our federal government has proven many times over that it cannot understand how to effectively make decisions for every citizen’s business. If my friend loses his investment, he’s out personally so he’s very careful with accounting. The government never does because democrats always blame “the rich” for their addiction to spending and claim that raising taxes will lift all boats. And when the country would have to find $15 trillion just to make it to even there isn’t enough to tax.