First Rule: Stop Digging
Ok, I’ll admit I’ve been on a tear about this fake economic stimulus package now for three days. I can’t help it: it’s a waste of time and money that won’t work. For example, after announcing the fact that we’re all getting free money every day since January, the IRS decided it would be a good idea to budget for mailers as well: printing, design, and postage ain’t free, but hey if those 9 people that don’t own a television are reached, so much the better.
But yesterday, it took a turn for the truly bizarre. The Treasury has brought back the 1-year T-Bill. I am no economist, so I’ll let MSNBC explain:
The government stopped issuing the one-year securities in February 2001, a year when the government recorded a surplus of $127 billion. That was the fourth consecutive surplus but was also the last time the government’s books were in the black. The budget was pushed back into the red by a recession, increased spending to fight wars in Afghanistan and Iraq and, Democrats contend, by President Bush’s first-term tax cuts.
So we’re borrowing more, that’s not new. But WHY are we borrowing?
A big part of the increased borrowing reflects the need to pay for economic-stimulus rebates to 130 million households. The government began disbursing the payments on Monday in an effort to give the economy a jump start.
Wasn’t it reckless borrowing that got us into this mess to begin with?
As I say, I’m no economist, but even I understand basic Keynesian economics: when the business cycle is down, you deficit spend to put people to work through infrastructure projects and the like. The wages generated stimulate the economy, and bring the cycle back up, at which point you pay down the deficit (obviously this oversimplifies the whole concept).
But there is useful borrowing and their is useless borrowing. I don’t even want to KNOW how much has been borrowed from future generations, and when I do think about it I thank god my kid’s a Canadian and won’t have to pay for the mistakes of our parents’ and grandparents’ generations (I’m sorry, I just refuse to lay the blame at the feet of freshmen Congressmen and Senators: this mess we’re in is clearly the work of the Boomers). Borrowing all this dough to help pay for $600-$1200 checks sent to 130 million households that will use it to pay for necessities they can no longer afford is a waste of money: that’s not a stimulus, it’s a band-aid on a sucking chest wound.
The money should have been spent on infrastructure projects (in the US, not Iraq) that put people to work so they can bring home a wage and buy food for their families. It’s not like our roads and bridges don’t need the work: our infrastructure earned a D in 2005.
Minneapolis
More recently, I-95 in Philadelphia was shut down because the supports were crumbling under the highway: it’s not like there’s not work to be done.
First rule: when you’re in a hole, stop digging. Reckless borrowing and short-term thinking helped get us where we are today: more reckless borrowing and short-term thinking will accomplish nothing, except perhaps making the problem worse.
Leave a Reply
You must be logged in to post a comment.
