The result of the stimulus bill proves government is not the answer
I am sure most of you have heard the news by now: the stimulus bill signed by President Obama on Feb. 17 promises to increase the average worker’s weekly paycheck by around $13 for the balance of 2009. This tepid increase comes with a price tag of $787 billion dollars, or about $2623 for every person currently living in the United States, whether or not they get the extra money.
Even an economic optimist like myself-I believe that capitalism is the natural state of human interaction-has to admit that the economy is struggling right now, yet I wonder what the Obama administration thinks is going to happen when it borrows that much money and only gives $13 per week of it to the people who actually make the economy work: the American taxpayers.
Some people will retort, I am sure, that most of the money in the stimulus bill is designed to create jobs that they will claim the economy desperately needs. I am inclined to agree that jobs are needed, but I wonder about the value of jobs created by borrowing hundreds of billions of jobs from foreign nations.
Others may react with the claim that this kind of stimulus is needed to prop up the overwhelmed social welfare system. I wonder how propping up that system helps a capitalist economy, especially when the money being used to secure the system must be paid back with interest.
Finally, some people will say that the stimulus is needed so that we can improve our national infrastructure, which is in desperate need of repair. To what end, I ask. Certainly, the infrastructure needs to be addressed, but how does borrowing the money to fix something that we already pay taxes to maintain fix the problem?
All of these reactions focus on the wrong part of the economic equation. People who believe that $787 billion in borrowed money injected into increased government control over our everyday lives are ignoring the reality that the current economic downturn was created by the American people and will be solved by the same.
We are the ones who bought houses we could not afford, borrowed to our maximum credit, and became content with inflated wages at jobs that were inevitably destined to be replaced by the unstoppable march of technology and the ever-changing spending habits of worldwide consumers. We are the ones who let this mess happen by failing to hold our government and our industries accountable until after the damage was done.
Now, not only do we have to dig out from under the weight of our economic mistakes of the past few decades, we will now also have to do so carrying the weight of trillions of dollars in national debt borrowed, supposedly, on our behalf–$1.6 trillion for 2009 alone. If the current estimates are even close to being true, we will have to earn $20 trillion extra dollars in our economy above our annual GDP in order to pay back the borrowing that has been done.
So, how is government stimulus helping the economy? I do not believe that it is. Be careful with that $13. You are going to need it when the bill comes due.