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Milton J. Madison - An American Refugee Now Living in China, Where Liberty is Ascending

Federalism, Free Markets and the Liberty To Let One's Mind Wander. I Am Very Worried About the Fate of Liberty in the USA, Where Government is Taking people's Lives ____________________________________________________________________________________________ "Extremism in defense of liberty is no vice. Tolerance in the face of tyranny is no virtue." -Barry Goldwater-

Saturday, June 06, 2009

Lets assume that what we have seen since the market bottom in March is the beginings of an economic recovery.....

There are signs that the economy might be recovering. This optimism may turn out to be unfounded. Or it may turn out to be justified. But the reason I mention that only $36 billion of the stimulus has been spent in the first 3+ months since the stimulus bill passed is to remind people that we were told that we needed to spend $787 billion urgently without discussion or thought to save the economy and that the reason it would work was because It—and "it" is the spending of this enormous sum of money—would create jobs. It would create jobs by stimulating aggregate demand in the face of a slump in consumer spending. If indeed the economy does recover—the so-called V shaped recovery, then it cannot be via this increase in aggregate demand caused by government spending.
From here.

So if the economy is in fact recovering, its not due to the central government spending deemed so necessary several months ago that $787 billion had to be wasted on legislators pet projects.

Ah, but as one may point out, economies sometimes turn around on expectations. So the expectation that the porkfest will turn the economy around actually bolsters the investors and consumers confidence and then the economy does all the heavy lifting and turns around. So, then I offer this: If its just expectations, then why not just announce gigantic stimulus packages, skjillions of dollars and then actually never spend the money. This would be the best outcome, economic recovery and no debt to payoff in the future associated with wasteful spending.

So, if its true, that the economy is actually recovering when the stimulus money has actually not been spent, then we can also safely deduce that stimulus money that is actually spent is therefore unnecessary and therefore wasteful.


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