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DECEMBER 18, 2020

NY Times: Congress Nears $900 Billion Stimulus Deal

 After months of stalemate, congressional leaders are on the verge of cementing a roughly $900 billion stimulus deal

REBUTTAL BY

In the upside-down insular world of Keynesian / Marxist macro-economic theory -- a school of quackademic crack-pottery which holds that prosperity and abundance flow from government manipulation and bureaucratic interference -- the state can "stimulate" the economy by taxing and/or further indebting the already indebted people, and then either spending or redistributing the stolen loot. This idea -- enshrined at our most hallowed "institutions of higher learning" -- is akin to trying to increase a sleepless man's alertness and energy levels by making him drink more coffee, all the while ignoring the underlying problem of the caffeine overdose that is preventing him from sleeping well each night.

From the article:

"The stimulus measure, which has been under discussion for months as the coronavirus has ravaged the economy, is expected to provide a new round of direct payments to millions of Americans as well as additional unemployment benefits, food assistance and rental aid. It would prop up sputtering businesses with federally backed loans and provide funding for schools, hospitals and the distribution of a just-approved vaccine."

You see, the "stimulus" ™ scheme is supposed to "prop up" that which the government itself is destroying. The fact that heavy taxation, regulation and inflation -- and now, add in the Stupid-19 lockdowns -- are the true causes of economic stagnation in the first place is not even considered. It's always more forced coffee for the sleep-deprived man -- when all he needs is to be left alone.

1. The British sodomite John Maynard Keynes is the founding father of the anti-market, pro-big government manipulation economics which has infested the business schools of America and Europe. Keynes' groupies preach that government spending creates prosperity. // 2 & 3. What the poor man needs is a good night's sleep -- which he can't get because Commie Keynesians won't stop "stimulating" him. After a while, the constant caffeine "stimulus" becomes the actual cause of the sleeping problem.

This article represents a textbook example of what the 19th Century French free-market economist, Frederic Bastiat described as, "The Broken Window Fallacy."  Forget about ever re-educating the dogmatic econo-eggheads of Harvard about basic macro-economics. But methinks "youse guys"  would surely appreciate the simple logic behind Bastiat's "Parable of the Broken Window" (From "That Which Is Seen and That Which Is Not Seen"). It's a timeless classic -- very short and sweet too. Here it is:
 
"Have you ever witnessed the anger of the good shopkeeper, James Goodfellow, when his careless son has happened to break a pane of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact that every one of the spectators, thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation – "It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers (glass cutters / installers) if panes of glass were never broken?"

Now, this contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.

Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier's trade – that it encourages that trade to the amount of six francs – I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.

But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, "Stop there! Your theory is confined to that which is seen; it takes no account of that which is not seen."

It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented."

Tell it, Monsieur. Tell it!

Broken windows and the shifting of a pile of cash from over here to over there does not create wealth.

The lesson of Bastiat's allegory is this: Money taken from taxpayers to inject into one sector of the economy deprives another sector of the economy of that same investment. And if the "public" expenditure does not add to the net wealth (GDP), society is actually poorer because of the transfer scheme.

Bastiat's clear, concise and passionate writings (The Law, Economic Sophisms, The Man and the Statesman), were penned at a time when more and more French "intellectuals" were becoming smitten with Marxist-style foolishness. His writings are essential and understandable reading for free-market / sound currency liberty lovers. It's a damn shame that most of today's economics majors will never even be exposed to Bastiat, or others like him.

Frederic Bastiat
1801-1850

Frederic Bastiat
1801-1850

Boobus Americanus 1:  I read in the New York Times today that Congress is nearing agreement on a $900 Billion stimulus deal.

Boobus Americanus 2: That's good. We could use some economic stimulus to offset the damaging effects of the necessary Covid lockdowns.
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St. Sugar: It'ss actually an economic depresssant, dumb-ass!  -- not a sstimuluss!

 Editor: Indeed. If taxing, borrowing, inflating and spending were the solutions, we'd all be rich by now!


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