According to Bloomberg.com there is enough money in the bailout, bank guarantees, and stimulus packages to pay off 90% of the nation’s mortgages.
It is enough money to send a $1,430 check to every man, woman, and child in existence.
President Obama spoke last week regarding the opposition to his plan. He explained, “So then you get the argument, ‘Well, this is not a stimulus bill, this is a spending bill,’ What do you think a stimulus is? That’s the whole point.”
He’s right, you know. That is the point. Those who believe in Stimulus Packages believe that government spending will grease the wheels of the economy, and get everyone spending, like a pull-cord on a lawnmower. Once you pull the cord, the motor runs on its own, so the theory goes.
But there is a crucial error in that line of thinking. What is the cost of the Stimulus? No, I don’t mean the dollar amount. We know that cost is only $9.7 trillion (so far). I mean, what is the offset? Where does that $9.7 trillion come from?
It’s magic money, mostly. Let’s face it, they can’t tax us enough to pay that off, and they can’t really float that much money for very long and keep Government bond money worth anything. (How could they raise that much money in bonds, when no one believes that the US Government is good for it?) The only thing they can do is turn on their Wonderful Magic Money Machine and start printing. That makes ALL money worth less. Eventually someone has to pay the price.
Walter Williams recently explained it by analogy.
…If Congress taxes to hand out money, one person is stimulated at the expense of another, who pays the tax, who is unstimulated. A visual representation of the stimulus package is: Imagine you see a person at work taking buckets of water from the deep end of a swimming pool and dumping them into the shallow end in an attempt to make it deeper. You would deem him stupid. That scenario is equivalent to what Congress and the new president proposes for the economy.
I’d add the old President in that analogy, too. Let’s face it, Democrats don’t own the market on dumb; the Republicans are heavily invested there too. Obama, rhetoric aside, is using the same tired tactics that got us here. It’s just a matter of who receives the Magic Money – who the checks are made out to. Are they Republican special interests or Democratic special interests?
But as long as we’re determined to go down this path, I have to ask, Why not pay off 90% of the mortgages in America? Talk about directly affecting Joe & Suzy Everyman. Think of how much free spending cash we’d all have THEN! We could afford to be more charitable, to drive more economical cars, to upgrade our energy-wasting appliances with earth friendly ones. After all, we wouldn’t be making house payments!
Think of the charity we’d be free to support. Think of the time we could spend with loved ones, if only we didn’t have to work so darn hard to pay for our homes. We could afford organic food. Heck, we could all get our taxes doubled and still come out ahead! Think of all the new money for government programs with double taxation!
There would be no more bad mortgages, and all banks would get their money back in full, thus eliminating any issues with backing iffy banks. We could all afford to run to Best Buy and purchase our Digital TV Converters – or new TV’s, for that matter!
If there is nothing wrong with the Stimulus Package in general, there is nothing wrong with this version of it. But if you’re thinking clearly enough to figure out what’s wrong with this idea, then you’ll have a tough time explaining how Obama’s spending plan is any different.