Walter E. Williams on the stimulus package:
Suppose the value of all that we will produce in 2009, our gross domestic product (GDP), totals $14 trillion. There cannot be any disagreement that if Congress spends $4 trillion, of necessity there is only $10 trillion left over for us to spend privately. In other words, if Congress is going to spend $4 trillion, it must find a way to get us to spend $4 trillion less. The most open and aboveboard method to force us to spend less privately is to tax us to the tune of $4 trillion.
You might say, "Congress doesn't have to tax us $4 trillion. They could tax us $3 trillion and run a $1 trillion budget deficit." You have that wrong. There is no way for Congress to spend $4 trillion out of our 2009 $14 trillion GDP by getting us to spend only $3 trillion less privately. It has to be $4 trillion less. Another method to force us to spend less privately is to print money and inflate the currency. Rising prices reduce our ability to spend privately since each dollar we hold will not buy as much. Another way is for Congress to borrow, thereby reducing our ability to spend privately. By the way, all of this means that in any real economic sense the federal budget is always balanced. That is, if Congress spends $4 trillion we must privately spend $4 trillion less whether it is accomplished through taxation, inflation or borrowing.
The stimulus package, otherwise known as the soaking of the American taxpayer part two, is essentially a massive transfer of wealth that will not do enough to create jobs in the private sector. Oh, I will admit that it will create some jobs, mostly in the public sector. But the private sector of the economy will see little to no real benefit. Senate Republicans need to vote against this wasteful package; they need to resist the President's attempt to guile them into backing a bill that will eventually fail. Let the Democrats own it. And when it flies like a lead zeppelin, they won't be able to hide behind the excuse that Republicans thought that it would work too.
5 comments:
Walter Williams and Thomas Sowell are two of my favorite economic writers.
Having said that, I am tired of all the scare tactics the Democrats are using in order to sway public opinion about this so called stimulus package. It is an old playbook and only the truly ignorant will fall for this.
Our last chance for this to not pass is in the Senate. We can only keep our fingers crossed.
Paul Krugman is my favorite economist and he supports President Obama's plan.
Bush drove this economy off of a cliff and sat in his office looking stupid after he did it.
It is going to take President Barack Obama a little while to get it back on the road.
Stop listening to Rush Limbaugh. He will rot your brain.
Bush = Hoover
Obama = FDR
How about we try James Madison instead?
Mr. Tedder,
Paul Krugman, a noted Keynesian, predicted a recession every single quarter since 2001 in his New York Times pieces; a recession did come but only after 6 years had passed by---even broken clocks are correct twice a day: Mr. Krugman has a poor record for predicting what is going to happen with the American economy. The fact that he supports Obama's stimulus package should be cause for alarm. He should stick to what got him his Nobel Prize---the theory of comparative advantage/Trade policy. I wouldn't be betting on Krugman being right if I were you...you may miss the money you lose.
I find it hilarious that liberals actually believe that there is a great big difference between George W. Bush's economic policies and the economic policies of someone like LBJ or Barack Obama. I hate to break it to you but there is very little difference. Well, except that Obama is intent on besting George W. Bush on how much national debt he's going to unload on the American taxpayer: He's going for the record. Yup, that's "change" alright.
You should stop listening to Keith Olbermann---He's an idiot and he will rot your brain.
Paul: If Senate Republicans stand their ground and vote against this disaster of a package, I will be very happy with them. (The Democrats can pass the package without Republicans.) Then Democrats will own it. So that when it fails, they can't use Republicans as a cover--"Hey, they voted for it too."
Hi VH,
I do hope that the package the way it's presented is not going to get passed. Unfortunately, the latest news is that there are three Republicans who are swaying towards voting for it. What a shame indeed.
Tasha
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