Monday, February 16, 2009

Get You Pork-filled Stimulus! II

This post has a received a comment by an Anonymous poster and I want to it address here. The comment:
Skyler my friend, you obviously have no concept of the purpose of the bill. EVERY SINGLE one of these so-called "pork spending programs" will create jobs jobs jobs and improve infrastructure. Yes, in a way it is sad our country has come to this. But, apparently there are people in the country who believe capitalism is only for the big-shots. The american people are not allowed to use their imaginations anymore because a select few have monopolized the entire economic structure of or country in the name of "capitalism." Come on. You're better than that.
First and foremost, the poster has subscribed to an economic fallacy called the Broken-window-fallacy. That fallacy demonstrates the essence of looking only at what is seen and ignoring what is not seen. For example, as per the broken window example, when a barber's window is broken by a young hooligan's rock-throwing, the town gathers and soon it is proposed that the window being broken is a good thing as it will create business for the window-glazier. As the window-glazier profits, he will buy a new suit, thus creating business for the tailor. An on and on the economy is thus stimulated. That is the seen. The unseen is what the barber would have done with the money had he not had to spend it on a new window. He could have bought a new suit, for example, and on and on, thus stimulating the economy.

The poster above says that the government will be creating jobs, jobs, and more jobs. What he ignores is first where the government gets it's resources (by pulling them from the market) and second what jobs those resources would have created had they been left in the market. Another fallacy thus committed by this poster is one that holds that the government knows how to spend taxpayer money better and more efficiently than the taxpayers themselves. This is absurd, as anyone can tell by considering the money in their own wallets, and who knows better how to spend it then either themselves or someone else. The government can't create wealth. It can merely shift it around, and destroy some of it in the process, thereby making society worse off than before.

What the government needs to do to really stimulate the economy is reduce the size and scope of itself. Let people and businesses keep more of their earnings, thereby creating the incentive to produce. What the anonymous poster says about people not being able to use their imaginations because a select few have monopolized our economic structure, is not something I'm able to respond to because I'm not sure what he/she means.

1 comment:

Anonymous said...

Skyler,

The fact is that we are now in an economy where credit is frozen, banks refuse to lend money, and there is no incentive for anyone to spend. There have been plenty of opportunity for the economic environment to change, but quite frankly this has not happened. No, the government cannot create wealth. However, it IS the government's responsibility to increase consumer confidence, which in cased you have missed it, is nil. This fact, coupled with the fact that we are continually discovering that businesses have been grossly mismanaged and irresponsible in regulating themselves, means someone needs to act. The american businessman won't act. Unless they are coerced. Look at the Big Three. It was not until they got caught that they decided to restructure their business models. (I look forward to seeing what that brings today). If it was not for the government, the Big Three would have let the american people hang with nothing. In a previous post, you called Obama ignorant. No, this is not the case. President Barack Obama is tired of the status quo. As am I. I am tired of the same old arguments from fiscal conservatives that have produced NO results. Who knows? Maybe the stimulus plan will fall flat on its face. But I would rather have a president for one term making every attempt to do what is right by the people, than have a president for two terms looking out only for his own agenda and allowing the same ridiculous economic policies to rule. Quite frankly, it is pathetic that it seems we in this country have learned nothing from our history, and that we are even in this situation in the first place. At the very least, I am glad I can wake up every morning, closed storefronts and all, knowing the President is doing SOMETHING. If it is really true that the window glazier would just go buy a new suit, then he must be waiting for an executive special ordered suit, or for prices to drop so low he can trade buffalo chips to get it. Cause he's not buying the suit now, and if the american people don't grow up so the government CAN get out of the mix, he won't buy it at all.

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