Friday, January 23, 2009

Government Stimulus or Boondoggle

Even if government spending in theory could “stimulate the economy” in a genuine, sustainable way, it would not follow that politicians and bureaucrats would know how to spend the money intelligently. The pressures to do something now and the perverse incentives facing those in charge of the money guarantee there would be more doggle than boon...

The government isn’t starved for tax money. It’s just lousy at spending it intelligently. “Spending is up 50 percent over the last 10 years, after adjusting for inflation. As a share of the economy, it will be higher this year than in any year since 1981,” Leonhardt writes...

Government will be government. As Russell Roberts says, expecting a stimulus bill not to have pork is like expecting a ham sandwich not to have pork...

Government borrowing and inflation is exactly what we don’t need. No politician, however charismatic, is capable of creating wealth by creating money.

Is there a role for the politicians? By all means. They must radically reduce the burden of government at all levels and in all ways. This includes spending, taxing, borrowing, regulating, subsidizing, and inflating.. An economy cannot serve consumers if politicians, pretending to know what they are doing, insist on interfering.

read the entire essay

My thoughts: Richman shows once again why he is of the best economic commentators today. Central planning does not work.

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