Check this out from Politico:
Obama plans to ask Congress for a stimulus package of $675 billion to $775 billion, so the planned tax cuts will total about $270 billion to $310 billion.
So Bush gave us tax cuts and record spending, and now Obama’s going to do the same damn thing. Government spending in excess of its revenue as a path to economic prosperity. Does anybody believe that this is possible? That wealth has ever been created in this way? It’s preposterous, but will anyone in the mainstream media dare to say as much? Of course, Russell Roberts over at cafehayek has quickly identified the fundamental lie at the heart of this proposal:
An increase in spending coupled with lower tax collections is an INCREASE in taxes. AN INCREASE in taxes. NOT A TAX CUT. If I spend more money and collect less, the government is promising to collect more taxes in the future. It is not a tax cut. Not a tax cut. Not a tax cut. And when you don’t cut rates but rather give people a lump sum of $500, there are no incentive effects other than to increase the probability that the US Treasury will be unable to honor its obligations in the future.
What makes this level of basic deceit palatable to fellow citizens? Why are so few outraged by the essential dishonesty involved in a public policy that promises prosperity today at the expense of prosperity tomorrow?
I think it’s because many would prefer to believe the lie. They prefer the comfortable feelings that arise from their faith in the virtuous intent of the State and in its power to make good on its promises. And the quantification of that faith is the national debt and what it affords us.
Currently, the U.S. debt is over $50,000,000,000,000.00 (trillion!). One extraordinary leap of faith after another, and for what? Has the quality of health care improved? Is public education better today than it was two decades ago? Is our society better off with prisons swelling from drug use/possession arrests?
Obama’s asking us to tolerate another leap of faith with his proposed stimulus program. People seem eager to extend to him and his fellow professional pols more faith. They seem to think they can afford to do this as if their per capita share of the national debt is not ~$180,000.
Accepting propositions as true for which no evidence is demonstrable is the essence of faith. It is an evasion of reality to suppose that Obama is a magician instead of a professional politician, that wealth is created by targeted subsidies instead of voluntary trade. It is our culture’s thick-headed reliance on faith-based public policy that produces the success of our current batch of elected officials. Their power is a consequence not a cause of most American voters’ preference for fairy tales instead of facts.
What I wouldn’t do for a public policy approach guided by science instead of the whims of self-interested politicians. Though Democrats have always tacitly prided themselves on their secular sensibilities, in truth their faith in big government is as illogical and destructive as faith in the supernatural, if not moreso.
Lost in the incessant jabber about the dismal events that *would* unfold if massive banks or car companies were to go out of business are the bright inescapable facts that (1) these firms are insolvent and (2) the U.S. federal government is also insolvent.
Insolvency means that they do not have the means to pay for their maturing obligations.
Politicians assert that the federal government “must act now”, “must do something,” and their insistence on this binary conceptual framework (ie, good comes from government action, bad comes from government inaction) has taken hold, which is no surprise in light of mainstream journalists’ difficulties with critical, skeptical, investigative reporting. Quoted hourly about the importance of “being practical” and “saving the economy”, such politicians have succeeded in producing a raging debate in America about whether the federal government should “rescue” Detroit’s automakers and various Wall St. firms or allow the entire economy to fail.
The premise of such a debate is that our federal government both has the means to carry out such a rescue and that it is its proper role to pick which players in which industries will succeed and which will fail. Reject this premise! In fact, economic growth is not a function of government intervention. In fact, our government does not have such means (ie, it is broke). The government’s role with respect to the economy is to enforce laws against coercion and fraud. Profits and losses result from freely chosen, mutually beneficial, voluntary human action. Picking AIG and Citibank over Lehman Bros? Pretty sure that’s not what anyone but the lobbying firms for those companies (and recipients of donations from them) believe the government should be spending tax dollars on.
Some will say that this is no time to allow principles (ie “ideology”) to influence policy decisions. Certainly there’s never a good time for ill-conceived principles to hold sway over anyone. What freaks me out about Obama is that he has gone to great lengths to depict himself as a nonideological practical man, but has thus far signaled his intent to massively expand W’s initiatives. Indeed, he intends to somehow spend us out of the crisis on a scale that will dwarf the initial $700,000,000,000.00 expenditure.
Big failures become bigger failures when they’re subsidized. And the notion that public works programs will create economic growth is wishful thinking on steroids. Who will be paying for these programs? What would that money have otherwise been used for? The government is basically a massive wealth transfer machine. If it creates in one place, it destroys in another. Obama aligns himself with legions of impractical, ideologically distracted public policy makers when he urges you to believe that the economic activity that the government creates by spending your money is somehow more valuable than the economic activity created when you save or spend your money.
We’re going to get changes under Obama. But changes in degree of government action instead of what we need, changes in kind of government action.
And so ends my first political blog post. 
