“Stimulus Package” - what a colossal parade of ignorance. This episode of pandering is about nothing more than a bureaucratic desire to appear to be ‘doing something’ about the economic situation resulting from previous desires to appear to be ‘doing something’ - in both cases, economic ignorance is to blame. Walter Williams nails the do-gooders as he always does.

There are three ways government can get the money for a stimulus package. It can tax, borrow or inflate the currency by printing money. If government taxes to hand out money, one person is stimulated at the expense of another who pays the tax, who is unstimulated and has less money to spend. If government borrows the money, it’s the same story. This time the unstimulated person is the lender who has less money to spend. If government prints money, creditors, and then everyone else, are unstimulated. As my colleague Russell Roberts said in a NPR broadcast, “It’s like taking a bucket of water from the deep end of a pool and dumping it into the shallow end. Funny thing — the water in the shallow end doesn’t get any deeper.”

This “package” is nothing more than income redistribution, just like all other economic meddling perpetrated by our government. When government touches the free-market, regardless of how, value is taken from one person and either given to another, or simply destroyed - by force.

This entry was posted on Monday, May 5th, 2008 at 6:07 pm and is filed under Economics, Idiots. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.