Monday, April 2, 2012

Government spending will stimulate somebody's something somewhere...

Our government wants us to think that an increase in government spending will stimulate the economy in a way that raises private spending.
 
Our government wants us to think that an increase in government spending will raise employment and lower unemployment? 

In 2009-2012 America run by Barack Obama, Obama lives, eats, breathes and……. well you get my meaning.  Where the result has to do with the GDP, the government spending multiplier is more likely below one rather than above one. 

In other words, anything the government touches with its spending multiplier ideas, the result comes out a negative.  Remember 4th grad math when we began to learn integers?  A positive times a positive equals a positive.  A negative times a positive equals a negative.  The product of a negative multiplier is always a negative.  Always.

And no amount of tax increases is going to finance government spending.  Only part of government spending is financed by tax increases.  This lends to the reality that government spending not financed by tax increases is plain old deficit spending.  

In second grade form: Washington spends more than they take in.  Day after day after month after year after decade.

Again in second grade form: what would our individual banks do to us if we the private citizenry, tax paying working folks, lived our lives and operated our bank accounts this way?

Once again in second grade form: the bank will bounce our unfunded checks, the debit/ATM cards will be cut off and credit card limits will max out and cards will be shut off pretty fast.

If government spending is intended to raise employment and lower unemployment, my view is that intent is to create more government jobs.  So with those "more jobs", comes government regulation.  Those jobs have to meet all kinds of bureaucratic rules, limitations, qualifications, and reviewed by bus loads of checkers, and reviewers, and handlers. 

So in that, I offer that government is as a snake that has coiled back on itself only to devour itself from its own hunger created by its own appetite after devouring all the "lower down the food chain" prey and food supply.

No comments: