More Economic Stimulation

This Economic Stimulus Package (they had to call it a Stimulus Package, now didn't they?) and my prior economics class have been bugging me for a while. Without crossing over into world domination conspiracy theories, why would any economist think that this so-called Economic Stimulus Package would fix anything.

But I figured it out today. I love having a job engaging enough to keep me entertained yet simple enough to allow my mind to go a pondering. The way to grow an economy is to have people engaged in financial transactions. Simple enough. If you want to get a lot of people spending a lot of money, give a bunch of money to people who don't often have a lot of it. Almost all of them will go right out and spend it. Give a panhandler a $20 and you can be pretty damn certain he isn't going to open a savings account. It only sounds ridiculous because their solution is so incredibly short sighted. If the last Economic Stimulus Package is any indicator, most people will go out and buy a television. Nearly all of those televisions will be made in another country. If instead these people all insisted on buying American made televisions, the manufacturer of that TV would now have more money to spend which would strengthen the economy further.

Huckabee (despite being a total father raper) has mentioned that we should use that money to build up infrastructure. On the surface it seems like a decent idea. All of that money would be spent on American goods and American labor. The problem is that government is typically extremely slow to move on anything. It does not give the economy any sort of immediately measurable boost. Like most Americans, I can spend $600 in a single day with little effort. I can think of all kinds of things I would like to buy if I only had a spare $600 lying around. In this case I won't, but I trust you can see my point.

Here lies another problem with the plan. Cash money spent is worth more to the economy than credit as far as immediate impact. With a cash transaction we have certainty. If I go out and spend $600 all people involved in the transaction know that $600 exchanged hands at that time. If I purchase something worth $600 using credit, there is the possibility that I will never be able to pay that money back. The goods or services received will have already devalued if/when they try and get it back from me. There may be some income from interest, but possibly not enough to cover the value of the amount credited. When a government trillions of dollars in debt decides to let that debt pile even higher by handing out money it doesn't have to the citizenry, that money isn't worth as much.

This is some whack-job speculation here based on no real numbers. I present this theory as something for others to ponder. If you devalue the economic effect of our currency based on purchases of foreign made goods and then devalue it again since the money being spent is actually on credit, wouldn't that make the dollar worth about a third of what it could be if those circumstances were otherwise? And doesn't that make a lot of sense when thinking about the current prices of gas, homes, tobacco, socks, firearms, alcohol, beef and flannel shirts? When was the last time you pumped less than a dollar into a soda vending machine?

So these economists have part of the equation, they just aren't very forward thinking. Either that or it is a conspiracy to bankrupt the nation so it can be taken over by rich bankers who wish to dominate the world.