Feb. 21st, 2009 | 09:06 am
George Mason University college Professor Richard Wagner wrote this for the office of the House Republican Leader: “Any so-called stimulus program is a ruse. The government can increase its spending only by reducing private spending equivalently. Whether government finances its added spending by increasing taxes, by borrowing, or by inflating the currency, the added spending will be offset by reduced private spending. Furthermore, private spending is generally more efficient than the government spending that would replace it because people act more carefully when they spend their own money than when they spend other people’s money.” A short translation of Wagner’s comment is: There is no Santa Claus!
If the value of all that we in the USA will produce in 2009(our gross domestic product (GDP)) totals $14 trillion. There should be no disagreement that if Congress spends $4 trillion, of necessity there is only $10 trillion left over for us to spend in the private sector. In other words, if Congress is going to spend $4 trillion, it must find a way to get us to spend $4 trillion less. The most open and somewhat above board method to force us to spend less privately is to tax us to the tune of $4 trillion.
Another method to force us to spend less privately is to print money and inflate the currency. Rising prices reduce our ability to spend privately since each dollar we hold will not buy as much. Another way is for Congress to borrow,(from Communist China, Japan or Brazil) thereby reducing our ability to spend privately.
By the way, all of this means that in any real economic sense to those who study economics, is the federal budget is always balanced. That is, if Congress spends $4 trillion we must privately spend $4 trillion less whether it is accomplished through taxation, inflation or borrowing.
This is where the government and specifically President Obama are acting like the mythical figure Santa Claus.Santa magically appears each Christmas eve to deliver presents to all good little children. The children do not know the presents come from their parents at first, but believe the benevolent Santa has given them their gifts with no financial consequences for anyone.
What Obama and his minions are doing with the stimulus package and fear, is shifting money to those who have not earned it, but still were allowed(actually encouraged) to buy houses that they could not afford.
But the government has no money to give, they have given all your tax dollars to the first “bail out”(TARP) for which there has been no accounting of how it was spent.
Since the Federal government makes no money, and relies on taxes and fees to support their largess. They should extend the tax cuts due to expire soon, and this would kick start the economy and produce more taxes.
The almost 800 billion dollars in the governments bag of gifts is tax dollars and IOU’s from taxpayers not yet born! But they like Santa Claus don’t tell those whom receive the gifts that they come from elves in the North Pole. The Obamaites are busy telling them they are taking the money from those greedy money makers who have taken advantage of the “have nots” far too long! And Obama and his cadre are here to redistribute the wealth while creating a welfare state!
And if this is not enough to make your blood boil, consider this. In 2010 there are 15 separate taxes that are scheduled to rise that will cost taxpayer an additional 200 billion dollars in Federal taxes. If you think Obama will stop the raises I will tell you the story about the tooth fairy!