Friday, August 19, 2011

Who’s up for some more Keynesian Kool-Aid?

First we had White House press secretary Jay Carney telling us that unemployment checks were 'job-creators', now its Agriculture Secretary Tom Vilsack telling us its food stamps (from, emphasis mine).

"I should point out, when you talk about the SNAP program or the food stamp program, you have to recognize that it's also an economic stimulus," Vilsack said then. "Every dollar of SNAP benefits generates $1.84 in the economy in terms of economic activity. If people are able to buy a little more in the grocery store, someone has to stock it, package it, shelve it, process it, ship it. All of those are jobs. It's the most direct stimulus you can get in the economy during these tough times."

So according to this philosophy, we take money from the people who are producing (there by reducing their productivity or their ability to hire) give it to those who do not produce and magically, we get Jobs, Jobs, Jobs. Okay that was a bit snarky. Their real philosophy goes like this. You give unproductive people some form of money and those people but something with that money. The businesses that sell goods to the unproductive then get a 'stimulus' because they sold something and get to keep the doors open and then will subsequently hire those unproductive folks.

The problem with this is that the money the government doles out has to come from somewhere. And, oddly enough, that money comes from the businesses that are not hiring anyone because the government keeps taking their money and giving it to unproductive people. These knuckle heads never acknowledgment that for the government to spend a dollar, it has to take it from the private economy that is then supposed to create jobs. The multiplier theory only works if you believe there's a fairy passing out free dollars.

I just wish these guys would stop and listen to themselves just once.

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