Why The Stimulus Had To Fail

It’s simple economics.  Government money comes from taxpayers.  The more government spends the more it relies on taxpayers to pay for its spending.  The less money taxpayers have the smaller the economy will be the fewer jobs there are, which means less income, less taxes, more debt. 

The stimulus, the huge budget bills, the massive deficit, is all debt created by the government to prop up whatever.  It could be unions, a specific kind of commerce, or to simply increase the size of government.  But it’s unsustainable and temporary.  That means that at some point the money runs out, you can’t ask for more, and you still have trillions’ in debt.  That’s where we are now. 

While the government was happy to spend money it did not have to prop up the market (and its special interests) when the private sector debt bubble burst, where is the money going to come from to prop up the federal government when the public sector debt bubble bursts?  Taxpayers who don’t have it.    

And there is not enough money in the economy now to sustain it because what little growth we have was derived mostly from printing and borrowing.  It was false growth.   When we default all the false growth created by trillions in democrat debt will collapse, any paltry number of jobs “saved or created” lost, every planned infrastructure project stopped, and every state that was dumb enough to rely on federal money to “balance their budget” (John Lynch and the NH dems come to mind) would be S.O.L. 

It’s simple economics.  Democrats embarked on an unsustainable path making the cash-cow of last resort (the US treasury)  into an anemic raisin.  

The only way to stop (or even slow it) it is to cut spending, cancel all the slush funds, stop relying on money that does not exist, stop handing out money we don’t have, and let people keep more of what they already earn.  It will take a while, it will still hurt like hell, but we might make it back from the brink.   

So what do democrats have planned?  Let taxes go up.  Add new taxes on energy.  Drive up the cost of doing business and the cost of living, which will reduce free market revenue and starve private sector job creation. 

The stimulus failed.  Every jobs bills failed.  And as long as laundering money through the federal government is the only game in town, it is only a matter of time before the bottom falls out.

Comments

[Rick Barnes]

I think your first paragraph highlights a problem Democrats have right now. They are spending money but they are scrambling because they know increasing taxes to cover the level of spending they have pushed us to would cause them to lose every election for the next 10 years. Instead they are living in a fantasy world in which they spend and the money comes from no where. Of course we know the truth is it's coming from our kids since we're just putting it off on credit cards.
The real concern is we've now hit levels of spending were we are putting more on credit cards each year then the country actually produces. Even at a 100% tax we wouldn't be able to cover the level of debt being created. That's a HUGE problem.

[Steve Mac Donald]

Rick I think there is a greater danger of another debt default (public one) but this time the government won't be able to bail itself out.