Thursday, February 5, 2009

Of course the economy will take a hit!

I read this blurb on Instapundit this morning:

OH, GOODY: Treasury in plans for record debt sale. “The US Treasury on Wednesday opened the floodgates of government bond issuance, revealing plans for a record debt sale in February and more frequent auctions in the months to come. The announcement came amid growing fears about US government deficits and sent the yield on the benchmark 10-year Treasury note rising to 2.95 per cent, up from just over 2 per cent at the end of December. The rise in Treasury yields has been pushing mortgage rates higher, complicating efforts to revive the economy.” So the “stimulus” is now a drag on the housing market. . . .

As Glenn Reynolds says.... "So the "stimulus" is now a drag on the housing market...."

Yesterday over lunch a fellow instructor and I were discussing The One, Congress, the massive debt act of 2009, and other weighty subjects. I told him "By their actions shall ye know them".

Put in terms we school instructors understand, it's all about goals and motivations. We as teachers have our goals.... do the best we can to educate our students and give them a fighting chance in the world. Administration has their goal, which is to keep every single warm body in a chair and bring the money into the school, no matter how disruptive a student becomes to the others. Looked at in these terms, both our actions and the administrations make perfect sense. Taken in light of 'mission statements' and such, suddenly common sense is out to lunch. The words mean little, what we do says everything.

"By their actions shall ye know them".

Ok, apply that to The One and Congress. Apply that concept to the massive debt acts of 2008 and 2009. What motivates them?

Government creates nothing. It only has the power to tax, subsidize, and destroy. Not to create. Government can take from one and give to another, and it can tear apart people and works. One thing it can never do is create wealth. Wealth defined as the productivity of working people and a working economy. Surely, government can print money, but that is not wealth. Printing cash, or creating it in slippery ones and zero's, is inflationary. It only devalues the money held within the real economy, making everyones holdings of less value. In other words.... printing money steals value from the cash already in the system, and is just another form of tax. It moves wealth from those who earned it to those who 'printed it'.

Tax, or inflation. Raising taxes always attacks the economy and costs jobs. Always and every single time. Lowering taxes stimulates the economy and allows job creation. Always and every single time. When the government sticks their hand in our pocket it weakens us as a nation. When they reduce leaching we get stronger.

The two to three trillion dollars in spending last year and this? It's a huge grab at the wealth of working people. It has to be paid for, and there are only two ways to do it since government can't actually create wealth. They have to raise taxes, which steals wealth from working people, or they have to print money, which steals wealth from working people.

No matter how it's done, the so called stimulus package is the hugest money grab and wealth redistribution since the formation of the Soviet Socialist Union.

Are the people in congress really too stupid to understand this? Is The One too stupid to understand this? No.... I doubt it. I think it comes back to the idea of motivations and actions. They know exactly what effect their actions will have on the economy and on us, and it fits within their motivations. It's acceptable to their goals.

Give that some thought, if you care to. Think about what goals and motivations it would take to make destroying our economy acceptable, or even desired.


gtd said...


Nearly every remedy or action by the Left involves these three elements:

1. The Expansion of government power
2. The Concentration of that power in the hands of the elite
3. The Diminishment of the sphere of personal freedom

Chris Muir said...

Well said!

Anonymous said...

Basically, when your sole talent consists of advocating and/or administering the redistribution of wealth, things look grim for you when the economy is good because no one really needs your services. The actions of the Democrats resemble that of an undertaker who throws poison in the community well to drum up business.

Mister Snitch! said...

Don't forget: You can't spell "USSR" without "US"!

Captain Ramen said...

Hey, it's not as if the government produces nothing. Certainly items such as infrastructure (highways, internet connectivity) makes it easier for the rest of us to produce wealth. And the other public good, security, ensures we can keep it.

But beyond that I have to agree with you. I mean I have people trying to convince me that FOOD STAMPS are economic stimulus. Maybe it has a short term effect but sooner or later the money borrowed MUST be paid back. And I'll be goddamned if I am going to work harder or see my savings evaporate so some lazy fat ass can stimulate his gut with food stamps.

Anonymous said...

I hope you have readers from Maine, because their senator Susan Collins is about to vote for this bill. Maybe she's hoping Maine will be the Novosibirsk of the new neo-Soviet America and they can build a shipyard or some tractors there or something.

Sissy Willis said...

You make it so clear and commonsensical. A regular Thomas Sowell you are. Thank you.

SamIam said...

Folks, it's all over. You are seeing the bare beginning of what the Democratic Socialists are going to do to make sure they will never be out of power again. Priority #1 is that, consolidate power and make it permanent. Priority #2 is advancing their ideological goals.

You may not want to hear this, but this election really marked the end of America as we know it. All traditional methods of redress are going to be steadily eliminated with the willing cooperation of our media. Eventually good Americans will begin to realize that there is but one way to refresh the Tree of Liberty. It's that, or bow down forever and accept that the American experiment failed and embrace our new masters and paradigm.

Zimri said...

Mister Snitch: Technically it's the first U and the last R in U.S.S.R. (corresponding to the first sigma and last rho in "C.C.C.P.") which parallel our "U.S." initials best.

Anonymous said...

We are doomed.

The elite (politicos) know this: Give a man a fish (that someone else caught), and he'll need you to shake that fisherman down tomorrow.

Eventually, you've got classic addictive dysfunction.

Increased dependency is their goal.

The Spending Bill is their means.

It will fail. Our economy will crash and burn.

Then they can justifying another massive bill in the fall, plus the imposition of martial law when the society falls apart.

Beware the jackboots of our current administration and Congress!

Sarah Rolph said...

Great essay.

Captain Ramen, the government does NOT produce anything. It does not produce highways or security. WE PAY the government to perform those services. With the wealth we create through our productive work in the economy.

If we all stopped working, believe me, the highways and the security would not happen. The government itself has no money.

Patrick said...

It is pretty obvious what their goals are - they want to make everyone dependent on the government so they can maintain their hold on power.


Anonymous said...

So, if you want government out of the market, then Citi Bank would have failed. Then Bank of America would have failed...the list goes on and on. If that happened, where would we be today? My crystal ball is as murky as everyone else's but I think we would be hoarding gold and stockpiling food in the pantry. I certainly would have no trust in the banks...because we would have no FDIC to insure our deposits.
Think of this. In Somalia there is no "real" central government and there hasn't been one in years. Same for Afghanistan. Would you prefer that the US find itself in the same situation as these countries? I would like to think not. There are plenty of complaints here, but not one potential solution. This is typical of the conservatives who are doomsayers in their projections. If the US is that bad, why don't you move to Afghanistan or Somalia, then I think your comments about the government would be valid, but until then why not think before you write?

Shrugged said...

As always, 'anonymous'.....

While I said nothing in his post about wanting the government 'out of the market', it happens I DO wish them out of the market. That would include 'out of the market' in ordering banks to loan money to people who clearly could not afford it (so called Fair housing laws). That was a large factor in those banks going bankrupt.

This post is about the supposed 'stimulus' package, which is appearing worse and worse as it's actually dissected in public. I have no doubts as to why it's proponents want it passed as fast as possible... the marks are beginning to catch on.

Public support for the massive debt act is at 40% and dropping. Congressional aproval ratings are at 27% and dropping. For pete's sake, even the Feds own OMB says the spending will do more harm than good!

This post is about debt and spending. These trillions of dollars have to come from someplace, and the post explains where... the wealth of people who work for a living. It's a money grab, a wealth transfer, a theft.

Old NFO said...

Well said... well said.

Anonymous said...

If you want the government out of the Market, then that means completely out. Then the banks should fail (they haven't because of the government). It 's like the compensation for the executives of the banks, if you don't think we (as tax payers) should have a say in compensation, then don't take our money. Let your institution fail. Then you can set any salary you want (but you won't be a company).
I'm too am not for spending to spend, but something has to be done. If we hadn't invaded Iraq, we would have $400 BILLION to spend here in the US.
And remember the good that government does. Without government we wouldn't be able to communicate on this forum, the forum wouldn't exist. Without government you wouldn't have had RFD (Rural Free Delivery). Without government there wouldn't be paved roads. If you really hate heere in the US so much you do have the option of moving to where there is no government. As the note before mentioned, Somalia and Afghanistan fit that parameter. Enjoy it there.

Shrugged said...

Once again, 'Anony-mouse':

I can understand why you might wish to drag the conversation away from the posted topic (the massive debt act of 2009). It's pretty much indefensible and insupportable.

As it happens, I am a supporter of government. In fact, in a way, I am a government employee. Most of the people I know are government employees, and a fine bunch they are.

No.... none of this is about how much I believe in government as a part of society. It's about debt, unconscionably wasteful spending, and taxation.

The bill about to pass CONgress, and about to be signed by The One, is a farce. It has nothing to do with 'economic stimulation' and everything to do with pork spending on pet projects, gathering political power, and incurring utterly massive debts on the backs of this nations working people.

Defend it... explain it... say something that pertains to the topic... Read the list of spending above this post and explain how a TRILLION DOLLARS of things like that will have a positive effect that outweighs the harm it will do.

It's all got to be paid for... and as always.... with 'other peoples money'. As Margarette Thatcher said "The trouble with Socialism is eventually you run out of other peoples money".

Anonymous said...

I'm a different anonymous, because I don't feel like registering and divulging my private data, and I agree that the government should stay out of the market.

If the government had stayed out of the market those banks wouldn't be failing, because the regulation induced market distortions that led to this 'crisis' would not have occurred.

So I say let the process of 'creative destruction' occur as quickly as possible and get the monolithic and self-important government the hell out of the way. Even if the stimulus bill really was intended as such, all it could do is delay the inevitable market correction. And the bill being considered is not very much about stimulus, and is very much about enacting the liberal agenda of the past 40 years.

I think we can all agree that over-borrowing to support our standard of living contributed to this recession. So explain to me how massive borrowing to enact entitlement expansion and repeal of welfare reform is going to stimulate the economy.

I have my kids studying Mandarin so they will be prepared for their lives. I told them, "If you speak Mandarin you can be a house slave while the rest of us toil in the rice paddies".