Government spending: Stimulus or bribe?
This may come as a big shock: Each U.S. citizen is at least $44,000 in debt. That is because (accordingly to the Associated Press), our government spending and debt now total $13,310,379,000,000. If your credit card debt level is at the national average, you can add $5,165, for a total of $49,165.
How did this happen? The Obamessiahs’ $787 billion stimulus package ended up costing $814 billion. Next, they had the $3 billion Cash-for-Clunkers program. After that, came the $10 billion in government union bailouts. The $16 billion Medicaid bailout was piled on top of $13 billion in home-buyer tax credits. Most recently, state teacher pension plans got a $26 billion rescue.
Because this $882 billion in “stimulus spending” did nothing to lower the national unemployment rate -- which continues to be 9.5percent -- the Democrat-controlled Congress plans, insanely, to use the post-November “lame-duck” session to pump out even more “stimulus” dollars. (One definition of insanity is doing the same thing over and over again while expecting a different result.)
Let’s estimate the “lame-duck” Congress will spend an additional $118 billion. That’s probably too low; however, it gives us the round figure of $1 trillion to work with. Lest anyone think this guesstimate too high, the Congressional Budget Office (CBO) says the federal deficit will surpass $1.3 trillion this year. Over the next decade, the CBO says there will be an additional $6.2 trillion in deficits.
Now, let’s say someone offers you $3,226. In fact, if you are a member of a family of four, you can have $12,903 to do with as you please.
Think about it. If you were handed $3,226 right now, what would you do with that money? If you pay off credit-card debt, your money goes back into the pool of money the credit card company has available to lend. That would stimulate the economy.
If you use the $3,226 to make a down payment on a better vehicle, you would stimulate the automobile industries and its suppliers and maybe even reduce carbon emissions as well. A family of four might be able to take that $12,903 and invest in a home or a better home for the family.
Now, where did those $3,226 and $ 12,903 figures come from? Take the population of the United States, estimated to be, say, 310,000,000 and divide that number into $1 trillion dollars and you get $3,226. For a family of four, multiply by four.
In other words, if that $1 trillion in stimulus money had been given to you instead of being spent on hiring more government employees to create more rules and regulations that hamper the economy, you would have $3,226 to spend or save as you see fit.
Even if you put it into savings, you free up capital for others to use. Most of us would spend those dollars on goods and services -- the kind of spending that creates jobs.
So where did the Obamessiahs get the $1 trillion? Government has no way of earning money. The $1 trillion comes from taxation and by raising money through borrowing money from other governments (like Red China) and from private investors. The countries and the people who buy our government bonds and our treasury bills expect to be paid back in full, with interest. If we can’t honor our national debt, we are bankrupt.
Both Alexis de Tocqueville and Alexander Fraser Tytler are credited with saying: “The American Republic will endure until the day Congress discovers that it can bribe the public with the publics money.” The stimulus money has been targeted to hire more government workers and to bailout union pension plans. The stimulus money is being spent to stimulate big government and big labor, not the overall economy.
Nationally syndicated columnist, William Hamilton, studied at Harvard’s JFK School of Government. Dr. Hamilton is a former assistant professor of political science and history at Nebraska Wesleyan University.
© 2010. William Hamilton.