According to Bob Higgs we may as well call the so-called stimulus bill “swimming-pool economics.” It’s based on the idea that if you take water from the deep end and pour it into the shallow end, the water level will rise.
Over the next few years, the February 4 report of the Congressional Budget Office (CBO) assures us, the stimulus is all sunshine and lollipops. The CBO concedes that by 2019 the stimulus will have depressed GDP by somewhere between 0.1 and 0.3 percent, but almost no Washington politician has a time horizon that long. (And even if those arbitrary figures were correct, they reflect only the palest shadow of the real consequences of the stimulus, as I explain in my new book Meltdown.)
The Keynesian idea behind the so-called stimulus is that prosperity can be restored if the government is allowed to seize enough resources from the private sector and spend them on just about anything.
Well, to be fair, not quite anything: according to Section 1109 of the bill, “None of the funds appropriated or otherwise made available in this Act may be used for any casino or other gaming establishment, aquarium, zoo, golf course, or swimming pool.”
The CBO provides us with the usual arbitrary estimates of the number of jobs the stimulus will create: between 1.3 million and 3.9 million. Wherever they pulled those figures from (and I have my suspicions), what kind of jobs are these? Are they jobs the economy would have produced in response to genuine consumer demand, or are they jobs the economy would have to be, um, “stimulated” into creating? If “creating jobs” is all we want, we should hand out teaspoons and tell people to start digging trenches. Government, since it acts in isolation from the market, can’t possibly know what kind of jobs actually yield value rather than simply squandering resources and wealth.
Section 3(a)(4) of the stimulus bill describes one of its goals as stabilizing “state and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases.” Isn’t that nice? Instead of having to raise taxes or (perish the thought!) cut spending, the states can simply get free money! Why didn’t we think of this before?
Now if you’re a saboteur who hates America, which is how President Obama characterizes critics of the stimulus, you might be inclined to ask where the tooth fairy is getting the money she’s giving to the states.
Also, Young Americans for Liberty has launched a campaign to help get Woods on TV so that more people can be exposed to real cause of our current economic mess. Join up here.
[Incidentally, this will be the second book titled Meltdown that I'll be reading. Patrick Michael's book on the distortions and lies that surround global warming alarmism is also worth a read.]