Monday, 16 February 2009

How Worse Will It Get?

As expected Obama and Pelosi's 1000 page stimulus package has passed both the US House of Representatives and the Senate, to be signed into law by Obama ASAP.

Let's go over some aspects of it: the bill is some +700 billions dollars of spending in various areas. First off, where will this money come from? They can take it directly from taxes -which the populace will notice directly, and not be happy about. Better to print money instead, and only notice it over a long period of time -when over stimulus can be passed. Glenn Beck shows the increase in the US money supply:



Secondly, what will the money be spent on? Rebuilding American infrastructure, economically, sounds like a good idea. But what's the point of building infrastructure if no one's going to use it? Infrastructure is built to facilitate economic growth now, when it is cost-effective. The sorry state of US infrastructure now is the result of over-enthusiastic government infrastructure building in the 50s and 60s, which couldn't all be maintained at once. Government planning in those days also centred around the suburbs, leading to unnecessary infrastructure projects.

Thirdly, is it moral to take money from those who still have it to use for projects that won't be used? To distort market signals leading to another collapse? Is it wise to take money from the producers who, like Atlas, hold up the American -and World- economy and give it to people whose only business is consuming without producing?

The answer to all these questions is a resounding: NO!

3 comments:

Elijah Lineberry said...

Good post, Callum!

No, it is not moral to waste all this money on nonsense projects and even worse to expect taxpayers to fork out to pay for it.

It will be interesting to see what Obama has to say in the Autumn of 2011 when everything has failed dismally! ha ha!

S.A.Clank said...
This comment has been removed by the author.
S.A.Clank said...

Unfortunately, this hyperinflation will continue if Obama keeps on passing these so-called stimulus bills, and what's even more worse is that the majority of the American people believe that this kind of spending is actually going to work.