Wednesday, July 8, 2009
While Talking About Keynesian Stimulus, Feds Are Really Just Giving Money to the Big Boys
Keynesians like Paul Krugman say that fiscal stimulus will get us out of this economic crash.
Austrian economists say that the Keynesians are wrong, and that they erroneously think that stimulus spending is a "free lunch".
But - whether you agree with Keynesians or not - the fact is that what the government has actually been doing is spending our money on helping out the big boys, and spending next to nothing on even trying to stimulate the economy. The government is giving trillions to the big banks and financial giants, but almost zero to the working people.
Specifically, the stimulus bill was $787 billion, which is less than a tenth of the money thrown at the financial elites.
The lion's share of the $787 billion was for pork, not for anything which could actually stimulate the economy.
Of the $787 billion, only about 10% has been spent so far.
The Government Accountability Office says that the $787 billion stimulus package is not being used for stimulus. Instead, the states are in such dire financial straights that the stimulus money is instead being used to "cushion" state budgets, prevent teacher layoffs, make more Medicaid payments and head off other fiscal problems. So even the money which is actually earmarked to help the states stimulate their economies is not being used for that purpose.
Stimulus? Where's the stimulus?
So when Obama's economic people say we need another stimulus program, they are pretending that the government has tried - in good faith - to stimulate the economy, but that they've underestimated how severe the economic problems are.
In fact, the government has simply undertaken a massive redistribution of wealth from the little guy to the big boys. That is not stimulus. That is robbery.
Don't believe me?
Okay, but leading economist Dean Baker said the true purpose of the bank rescue plan is "a massive redistribution of wealth to the bank shareholders and their top executives".
And Nobel economist Joe Stiglitz says the Geithner plan will rob US taxpayers.
And congressman Grayson puts it succinctly when he demands "Stop stealing our money!"
The fact that lobbyists from the financial industry have paid hundreds of millions to Congress and the Obama administration is clearly just a coincidence. See this, this, this, this and this.
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Love your blog! Keep up the great work!
ReplyDeleteHi from South Carolina. I'd like to be the first to point out a common denominator to the entire financial crisis. Without knowing how and why I know this, it might not make sense. My information has been suppressed across the board.
ReplyDeleteIn fact, the FBI and Secret Service have been stopped from investigating these matters I am complaining about.
They are real in other words.
Now, I know this information for the most bizarre reason you'll ever hear.
I found my privatized Social Security account at a certain " firm".
That firm is the common denominator.
No one would ever see it without knowing my information.
Please read about Argentina's Social Security system.
Then remember, the Governor of South Carolina " took missing" for five days... in Argentina.
I'd point fingers if I weren't such a nice person.
A horrendously abused person for knowing this information, egregiously abused by a separate and brazenly illegal system... but remember, I am a nice person.
When you google Argentina's Social Security system. don't miss the part about how it crashed the economy when it was put into place.
All spending, if it takes place in this country is stimulus.
ReplyDeleteIf we are using stimulus funds to keep teachers jobs then those essentially are jobs that have been created, because without the funds the job would be gone, and there would be another person collecting unemployment.
If we supplied the 45 million folks that do not currently have healthcare with healthcare that would be stimulus because the services that these people would use are would require new jobs to be created to deal with the greater volume of healthcare recipients.
We can argue about which spending strategy is more effective at creating jobs, but there is no doubt that everything except not spending the money or giving it to someone else who won't spend it in the USA will stimulate the economy.