Posted on 01/28/2009 8:21:00 AM PST by governsleastgovernsbest
I might have expected Harry Smith to cheerlead Pres. Obama’s stimulus plan. But interviewing an economist this morning, the Early Show anchor was surprisingly skeptical.
Smith’s guest was Mark Zandi, chief economist at Moody’s Economy.com, who appeared before the House Budget Committee yesterday in support of the stimulus proposal. Zandi testified that the plan “will ensure that [the downturn] remains a recession and not a depression.”
Smith began by surprising Zandi with a full-page ad in today’s New York Times [sponsored by the libertarian Cato Institute], signed 200 economists saying the stimulus package is unnecessary. Zandi retorted that there are thousands of economists, the vast majority, who think we do need a stimulus.
Smith seemed to remain dubious, citing a variety of ways in which the proposal differed from what people imagined a stimulus plan would be.
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(Excerpt) Read more at finkelblog.com ...
Frost alert in Hades ping to Today show list.
Don’t you think these MSM talkers (I remember Harry Smith when he was a crappy DJ in Denver in the 70s) are not starting to lower the expectations so it doesn’t look like BHOs fault when his dopey plans fail?
It isn’t as surprising as it might appear at first blush. The election is over. Their boy won. Now, they need some street cred, so they like to make it appear that they are little bulldogs instead of permanent lapdogs. Next election cycle, it’ll be all-pro-liberal, all the time.
That explains the frigid temperatures we are expecting in Central Florida.
Look! Up in the sky! It's a bird! It's a plane! It's a flying pig!
All this talk about what good the stimulus is going to do ignores the truism that the money for the stimulus has to come come from somewhere. We can look only at the "seen" - the good that is supposedly going to come from the stimulus (as zero and his band of merry economic magicians would like us to do) but we must consider the "unseen" - the fact that every dollar spent on the stimulus is a dollar that was not spent or saved somewhere else, by the original provider of the dollar.
In truth, the so called stimulus is nothing but a huge wealth transfer, and the likelihood it'll do any good - any more good than would come from the original owners of the dollars being allowed to keep them and do with them as THEY chose - is minimal.
The government can get the the money for the stimulus in one of three ways;
1. From direct taxes. Clearly, in this case, the money they take is money that would have been spent (or saved) on something else. If spent, it would have "stimulated" just as much as if the government takes it and spends it. If the government takes money that would have otherwise been saved, they take it away from what might have been productive use by a borrower. The only thing taxing does is switch the decision about how the money is to be used from the person who earned it, to the politicians.
2. From borrowing. Which really is just the government taking money (this time voluntarily) that would have otherwise gone into savings, and spending it. Again, when measuring the good done by the government spending it we must ask how the money would otherwise have been used. We don't know, so how can we say that the government would do more good with it than would otherwise have been done?
One thing's for certain. If the money is lent to the government long term, the lender is pretty likely to be poorer at the end of this process since the government will not be paying back the loan with dollars of a value anywhere approaching the value of the dollars lent. So let's hope our trading partners continue do the bulk of the lending instead of our pension plans. Let's hope out trading partners don't wake up to the fact that they're getting ripped off.
3. From inflation. Only the government (and counterfeiters) have the ability to create money out of thin air. When the fed does so via the fractional reserve banking system they are essentially just taxing all dollar holders. But it's a stealth tax, difficult for most to see and understand, so if they can't borrow the money for the stimulus this is government's preferred way to transfer the wealth.
Once again, does this new money help? Maybe, maybe not. It helps some (those who receive the dollars) but it hurts others. We can't say who is hurt because we don't know what the the dollar holders who just had some of their purchasing power stolen from them due to the increase in the money supply would have done with that purchasing power.
So it really should be clear to all but main stream economists who can't envision that a coin has two sides. The "stimulus" is nothing but a wealth transfer and while we will be able to see how it helps, we'll never know how it hurt. Knowing how inefficient government is, it's highly likely that the stimulus will make matters worse than they otherwise would have been.
In truth, the stimulus is nothing more than politicians taking control of purchasing power that could have stayed with the original money holder. Maybe they mean well. But we Americans are still fools to let them do this to us.
Good point. Another reason might be that even the LIBS are growing fearful about the depth of penetration the feds are going for in our ecnomy.
Nah, they don't give a rat's behind about "street cred" - - that would require some shame. They are already at work on getting their party more seats in the next election, getting Zero re-elected in 2012, and writing tomorrow's history about Zero's astounding "legacy".
???
That's what socialists WANT.
“Zandi retorted that there are thousands of economists, the vast majority, who supported the stimulus...”
Must be the same ones who believe in global warming.
Yeah...but Smith might be seeing—with the banks and the cars and the insurance insurance—and saying NOT SO MUCH!
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