Thursday, February 12, 2009

Econ 101.

So, a commenter at Unc's place, in trying to defend the new Five Year Plan for digging holes and filling them back up again to "get people back into the workforce" said:
See, what’s needed right now, to generate more demand, is to put people to work. And it doesn’t matter at all whether it’s the government or the private sector that does it, as long as it happens.

Well, yes, it does matter.

See, when the government employs people, where does it get the money to pay them? Class? Anyone? That’s right, taxes.

And where does it get the taxes? Anyone? Bueller? That’s right, the people with jobs.

Are you seeing the problem, here? The government doesn’t generate anything. If everybody in a closed system was working for the government, you would be, in effect, trying to pull yourself up by your own bootstraps. You're trying to raise the water level in the pool by pumping water from the deep end to the shallow one; trying to build the wall higher by taking bricks off the bottom and putting them on the top. It doesn’t work.

You need private entities generating new wealth for the government to have a source of revenue, else the snake is trying to sustain itself on a diet of its own tail.

15 comments:

atlharp said...

The biggest problem with Liberals is that they view economics and prosperity as a zero sum game. They believe if someone makes a dollar, it is taking it away from someone else. It is an utterly naive and simplistic way of viewing economies. it also shows why they feel like they must have control over so many facets of it. What you are seeing is what many people are taught in economics classes, which is why so many "intellectuals" propose it.

Robb Allen said...

Well, don't forget tgirsch COULD point you to a dozen or so reports showing that governmental jobs create more stimulus than private enterprise, he just won't.

Because you won't believe it anyway.

It's like arguing with a child who doesn't quite understand that, no really, there isn't a fat guy in a red suit who drops down the chimney and leaves gifts. Just because there are hundreds of pictures of the guy and you can find him at JC Pennys here and there coupled with the fact you really really really want him to exist doesn't amount to much.

If t-bones' argument held any weight, then taken to its logical conclusion we could simply socialize every last function, make every job government controlled (including the hot dog vendors) and we'd reach infinite prosperity and be able to travel at the speed of light with our minds.

Instead, government programs work because private enterprise continues to function despite the government's interference. Russia was held aloft for as long as it was due to its capitalistic black market, not because the commies had a pretty good idea how to run things.

doubletrouble said...

Heh.
My sentiments exactly...

http://rattailbastard.blogspot.com/2009/02/time-to-party-like-its-1799.html

perlhaqr said...

Screwed every which way we turn.

At least with Barry in the White House the Republicans will mostly pretend to oppose him. If McCain had won, he'd be fucking us just as hard, and with even more Republican support.

Retardo said...

A liberal is an adult who still hasn't found out where goods and services come from.

Some of them even do that while holding down a job in the private sector. How, I don't know. It's like an obstetrician who believes in the stork. But there they are.

alath said...

Not to mention the long term economic damage that will result from unprecedented levels of government debt.

Projections of debt were already monumental and crippling before this spendaholic 'stimulus' spree.

fast richard said...

If a private business spends money on activity that does not expand the economic pie, they lose money. If they keep making bad economic choices they go out of business.

If the government spends money on activity that destroys the economy, they just raise taxes, increase government control, and blame the problems on "the failure of Capitalism".

kahr40 said...

A liberal is an adult who still hasn't found out where goods and services come from.

A liberal is an adult who wants to be a child again and have momma and poppa provide everything for them.

DirtCrashr said...

Oh, its tgirsch - what's expected is minimal synaptic activity and mainly at the surface.

Anonymous said...

Aw, there's gonna be some palliative effect, no doubt. Trouble is, an aspirin eases the headache pain but does nothing to cure the brain tumor.

The larger problem is that printing more money reduces the buying power of any single unit. I'm wrong? Okay, how come coffee ain't still a nickel a cup at the Upchuck Eatery? Is a cuppa Folger's "worth" a buck-sixty cents?

So, Nanny Fed is gonna run the printing presses overtime, and the price of what's bought with the Stimuli will go up/up/up. Won't that be nice? No, that won't be nice. But then?

Art

jimbob86 said...

"Are you seeing the problem, here? The government doesn’t generate anything."

And neither did the real-estate agents, banks, and mortgage brokers,..... other than a pile of leveraged IOUs...... and just like currency, a whole lotta IOUs perpetually refinanced by more IOUs mean each is worth less and less, until at some point, they are all not worth the paper they were printed on. Supply and Demand, reliable as gravity.

Robb Allen said...

JimBob, that's not necessarily true. My bank is making good money off my mortgage because I'm paying it back, plus the interest we agreed on. Same with the bank that sold me my cars. I paid them back on time, every time, and they got every penny we agreed upon.

I got the royal 3rd degree when applying for those loans. Being that the bank calculated their risk and realized I was the perfect type of person to make a loan to, they came out ahead. I got a house / cars out of the deal, they got more money (which they use to lend out to others).

Of course, I bought a house I could afford at a price that I realized the house was worth and at a fixed rate rather than something 3 times the size I needed with a variable interest rate that was guaranteed to go up.

A lot of those banks were guaranteed payment by the Feds if the loans fell through. Of course they're going to take what they can get.

Alas, though, you are 100% spot on. Supply and Demand are as reliable as Al Gore flying a private jet to a Global Warming conference.

Robert C. said...

"Alas, though, you are 100% spot on. Supply and Demand are as reliable as Al Gore flying a private jet to a Global Warming conference."


And the resulting snowstorm that inevitably occurs in the immediate area.

Charles Pergiel said...

I still think we should remake the rocky mountains into a series of pyramids. That would please the sun god!

Anonymous said...

Come on Tam, you keeo forgetting that these types think that everything you make belongs to the government. And out of the goodness of its bureaucratic heart it lets you keep some of it.