Look at the following image:


What the fuck?

I think some jackass named Keynes is to blame. Blamed because he is the beard for which this thing hides behind to gain credibility.

In reality, of course, this is spending is not based on any economic theory or reality. It's a power grab, it's a reward for allies. And, it's just the beginning.

I am not a tribal hack, hating on HugObama because he's of the wrong political persuasion. That thing above, that is the result of 100 days. And maybe 15 minutes of debate. This thing isn't a moderate, cool, rationale way to govern. This thing isn't even a well thought out way to socialize the country. It's just a testament to how idiotic, ignorant, and dangerous superhacks like Pelosi, Reid, and Obama are. 100 days. Open the floodgates. Any pork, project, or reward...come and get it.

Fine. Even pretending that they're sincere (they aren't or they're ignorant). They believe that you solve a crisis of capital in a financial sector by repaving roads and other "stimulus" activities. Sure whatevers.

The summary of Keynesism is that by merely employing a man, you grow the economy. The example is, apparently, you pay guy to dig a hole and then pay him to fill it back up. He gets paid, he spends the money, and the greatest country and economy that the world has ever seen sprouts to life.

Can we, ah, unpack this train of thought?

What can we agree on? Wealth is created, right? Price follows the law of supply and demand, right? If you are an American and can't agree to these two basic precepts of the market economy, the economic system that has granted you more luxury, safety, and material well being than any other country ever, then leave. Please.

Ok, what is the demand for a dug hole. Not that great. Noone is going to spend a lot of money on a dug hole or a hole that's been refilled. No wealth is created by this meaningless act. It does nothing. Money is invested and nothing is returned.

More insidiously, what does this ditch digging and filling job do to the digger, the man himself? His value is tied to his job, he is not gaining new skills. He is not even being criticized or held to any standards. Just show up and do this thankless, meaningless work. Soon, the man discovers that the sum of his efforts is the same whether he works hard or softly. Or if he shows up drunk or high. Hell, why not show up late and leave early.

His soul degrades to the point where he won't even take a real job. He is programmed to earn his money for free. Real work is devalued because the compensation for an actual job is most likely trivial compared to what he makes for nothing. And, because he is a ditch digger, the opportunities for a jump in income from make-believe work to real work are small.

What proof have I of this? Look at the bloated unions driving GM out of business. Look at the hoards of French protesting the inevitable end of their 2 months of vacation and 35 hour work week. Look at the inner cities of America. These examples sprung not from my cold rationality, but from the empathy of make believe work. You loved these people to death.

Want more proof, what is this?

Now, I am not opposed to some spending. The seduction, the siren call, of giving jobs to people is there. And, maybe, some people can only dig ditches. But this theory is wrong and cannot be the basis by which an economy grows. Furthermore, yes, debt spending (another issue, but a related issue) is not always bad. Reagan had to agree to spending increases in trade for growing the military. At least military spending is the opposite of the ditch digging job. The science and engineering required to make and maintain advanced weapons systems (like the Spartans, there are no American "cannonfodder," every soldier and sailor is precious and can strike back at the enemy with unimaginable power) added to this nation's wealth. We got the internet, radars, VCR's, computers, medicine, etc. Not dug and undug ditches. The men emerging from the military were taught, if not marketable skills (how to shoot a gun, drive a boat, fly an airplane), they gained marketable traits (hardwork, leadership, and responsiblity). This spending added to the country's wealth and made the debt incurred relatively small.

Look at that thing again. Did our economy quadruple is size? Will it? No. So, where is this money going to come from? I have no idea. I expect we are going to borrow some of it and monetize the rest.


Japan is another example. They had an economic crisis. They spent like mad. They got new roads and shiny new stuff. Did it help or matter? no. They just ended up with more debt. This is known as the "lost decade." So, their debt is coming due and they don't have the economic growth to repay it. That debt is just as expensive now as it was then.

Think about it, you take out loans to get a degree, say $50K. You hopefully get a job that will make you enough money to pay off that debt. That $50K is less of a burden to you after school and better job than on the day you signed those student loan papers. If you went out and spent $50K on shoes and rims that spin, your income remains the same. That $50K is still as expensive to you on day 1000 as it was on day 1.

On the other hand, we have had the last 30 years of economic growth. Our lifetimes have been blessed by the Reagan presidency. He lowered taxes and cut regulatory interference. Our economy grew. We had several recessions and missteps, but we grew and we are stronger because of it. These recessions allowed us to clear the economic deadwood and to learn lessons. Instead of a lost decade, the recession is a rebuilding year. Think about it. We may have just abandoned the Patriots or Colts role model of the metaphorical football world because we didn't win the SuperBowl one year and decided to take up the Detroit Lion's managerial style instead. One bad year versus a bad lifetime.

Nonetheless, despite the success that we've had thanks to an embrace of the markets, the taxes crept back and the regulations crept back. They always do. Governments want more. And the power to tax is also the power to reward and to punish. And, the ignorant think that economics is a zero sum game and taxation is a linear event.

Bush is being blamed for the current recession. He was also blamed for inheriting Clinton's recession. Luck guy, eh? You saw what he did with the recession he inherited. He made life easier for businesses, not government. We grew...yes we did...hitting a record string of months of economic growth. Eventually, we hit a recession. This one caused by things that have no name (i.e., government regulations forcing banks to make bad loans and then forcing these loans to be sold as securities). But, despite a war, despite a lost city, despite many things, the economy grew.

So, think. Please. Many president inherit a recession. It's the cyclical nature of the beast. Funny how that works out. Some presidents do ok, some kick ass, and some cause and prolong the Great Depression.

So, whither Keynes? Fuck Keynes.

Give me Laffer. Give me Friedman. Give me Reagan. Hell, give me JFK. Give me Hayek. Give me Rand. Give me my freedom!

You can keep the change.

UPDATE

The super-duper deficit keeps burrowing into my brain. I grew up post Reagan, I have zero recollection of Carter. We, as a country, have had it pretty good my entire known life. But, one stupid election, the flood gates are opened. The people currently in power are not ready for this and they are dangerously willing to spend away thirty years of economic growth and prosperity.

And think about what else they've done. They rewrote the game of investing without so much as a whimper. So, why ? how? What's going to grow if people aren't even sure that their investments are safe?

And the thing is...there's historical precedent for what happens when people like HugObama take over a society. At best, we could be in for an FDR era rough spell, you know 15 years of poverty. World War. That sort of thing. But as much as liberals love their dystopic-future-fiction, the world's shitholes of poverty, soul killing oppression, and lost time comes from the totalitarian model we may be embracing.

But who knows, maybe all the spending will work. Maybe Obama's a benevolent steward of our welath. Even so, there's one thing Reagan and the Bushes weren't able to even touch. And one thing Obama isn't going to touch. Social Security is going to go boom very soon.

Think of that when Howard Dean tells you that capitalism is bad. Government is much worse.