Giving 30k to everyone to revive the economy
12-20-2011, 07:37 PM
Ahh... the wonders of economic (be it personal, micro or macro) illiteracy.
300 million people multiplied by USD 30K is... 9 trillion USD.
About 60% of GDP.
Where would that money come from? My friend, if the US government could do that, it would already have done so. What do you think Obama's stimulus was about - except it was not as simple as your idea, the principle was the same. And it completely failed to achieve what it set out to do. Ask yourself why?
Why did good, old-fashioned Keynesian principles of government stimulating demand fail to get this economy running again?
Here are my answers:
1. The aggregate national debt was already very high. Expectations till now had been that growth in production would outpace growth in debt. Reality caught up with everyone.
2. All economic growth the past decade has been artificial and based on higher borrowing and lower savings ratios as opposed to productivity growth
3. Government regulation and special interest groups have made legislation so cumbersome the loss inflicted on business efficiency could be measured in hundreds of billions of dollars.
Do I have any empirical data to back these casualities up? Nope.
In any case, one of the PhDs at my bank (where I work) was talking about how the current crises is mostly one for the lower classes. Well-educated Americans are actually coming out OK.
If true... if the problem IS mostly with the lower classes, then the problem is immigration of low-skilled labor from 3rd world countries. They are willing to work the fields in San Bernadino for $8 an hour in blazing heat while the single, fat Mom sits in her decaying house in Detroit waiting for the government to save her from the dumb decisions she made.
The reason for our current crisis is not the economy. If it was just that, the problem would've solved itself already. The economic crisis is part of a larger, more dire structural crisis afflicting the entire Western world - voters and politicians alike, bankers and special interest groups. Everyone. This entire forum is a testament to it. How many men on this forum are going to become model citizens, stay put, have a stable career and income, pay their taxes and raise three children? That's right. 0. Instead, we're all trying to get off the sinking ship - we've seen it coming a long time.
And when more and more men realize this, the ship is going to sink even faster. Progressive, the New Left, Feminism... they've already killed the goose that lays the golden egg.
The current crisis just a symptom of a more sinister disease that has permeated all aspects of society. It's what made the grotesque and irresponsible greed of the sub-prime crisis possible, the wanton government spending and massive deficits, the outrageuous entitlement culture that makes Americans say "gimme, gimme, gimme" or "what's in it for me" every time a politician opens his mouth. It's the problem that lets second-rate dictators, who are nothing compared to the tyrants we used to face up to, push us around when we could have deposed and defeated all of within 3 years of 9/11. Had we spent $2 trillion on a 2y-war instead of $200 bn a year on a 10y war, the world would've been safer, respect for the US would've been greater, and our pride in it's proper place. And maybe the younger generation, brain-washed by the verbal vomit spewed by the progressives, neo-cons and the New Left, would've realized that America still was master of its own fate and we wouldn't be seeing crowds of whiny bitches yapping Occupy Wall St and demanding others yield the fruits of their labor, while they ought to be creating value themselves, staying with their parents, saving every penny to get ahead.
The damage done already has been immense. Government debt at 100% of GDP and unemployment at 9% to show for it. The last time the debt was that high, we had built 300,000 warplanes, 100,000 tanks, more than 100 aircraft carriers and millions and millions of shipping tonnage. 11 million Americans out of 140 million were in uniform, and more than 200 million enemy citizens were on the verge of being conquered. We were by far the most superior military power in the world - not only ourselves, we had supplied the USSR and the UK both their war material. And in just 3½ years.
Compare that with the achievements of today?
As Roissy has already described: the solution is less government in the private sphere. A restoration of civil society, military prominence, and personal responsibility at all levels of society: fiscal responsibility in government, personal responsibility for kith and kin in the households. Taxes that do not adversely affect productivity levels of individuals, and that encourage firms to base their operations in the US. Less faith in the good will of our enemies and more faith in the power of persuasion of large carrier battle groups and tank divisions against which the rabble our enemies often constitute have no chance, nor our adversaries to be: namely China and her minions (Iran/Syria/Russia... Venezuela?).
People can often solve their problems, and the solutions they manage to find are usually better than those government could hope to offer (one-size fits all, by its very nature). In the realm of defence, the most important task of government, we should expect that as a free nation, wanting to remain so well into the 21st century as well, we must maintain at all times military supremacy over our adversaries.
It's a simple formula to prescribe... but completely anathema to the establishment, elites and intellectuals of Western society. There is no easier way to describe the nature of our crisis than their hostility to these very simple ideas I have put forth. No wonder we are at the mercy of Chinese to bankroll our irresponsibility, or the Taliban to accept a peace deal now when they could do better by waiting till tomorrow.
I can only hope that at least one Western enclave will break away from the rest before it's too late.
A year from now you'll wish you started today