by Henry Oliner

The stimulus package assumes that the government can repair a badly damaged economy by sending checks to a certain sector of citizens. This is such a flawed view that it should be obvious to anyone.

The money sent to one party is taken from another party. The check Billy gets to spend at Walmart is simply taken from Bobby who will not get to spend it at Bass Pro Shop. The net effect on the economy is zero.

The government can only redistribute wealth, it can not create it. Even public spending on roads and bridges and the military is simply money taken from another sector. The tax money spent on roads is tax money not in the hands of the citizens that is not spent on a new car, a charitable contribution or a mutual fund.

It certainly does not feel like it is taken from someone else because it is taken later by either inflation or debt repayment, but the transfer is just as real as if it is taken the day it is spent.

We all know the money spent on the stimulus package has to come from somewhere at some time.

Rather than giving away money it does not have, the government should be focusing on ways to stimulate others to actually produce the wealth. This comes from free trade, low taxes, and a sound currency.

The sound currency portion will come from a balanced budget which inevitably means drastically reduced government spending. The two biggest government expenditures are Social Security and Defense. The cuts must start there. The Farm Bill, Medicare Prescription Drug Benefit, and other hugely expensive programs must go and fast.

No one ever solved a financial crisis by giving away money they don’t have.

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