A couple friends emailed me invitations to participate in a Tea Party Tax Revolt. One was a web-site petition. The other was a web-site petition which actually disguised an advertisement for a book on the economy. That one made me smile. Another book from another economist. He was going on and on about how everything wrong with the economy is Washington, and how the “stimulus package” and “congressional bail-out” isn’t going to work.
One thing I don’t understand is why people think the Congressional bail-out won’t work?
What got us out of the Great Depression was the spending before and during World War II. The government spent billions on Roosevelt’s New Deal, and borrowed billions in war bonds to finance the European and Pacific campaigns. What got us out of previous recessions were more deficit spending. Reagen spent billions on the Strategic Defense Initiative (Star Wars) which never worked. Bush Sr. spent billions on the smart bombs they dumped all over Iraq during the Persian Gulf War. Bush-Cheney spent billions on the Iraq and Afghanistan Wars. These all created big budget deficits, but it also created an immense amount of cash flow. This money does go some place, even if it is the military-industrial complex. Those executives would spend their bonuses on goods and services. The bail-out might be wasteful in places, and have poor judgement, but it takes money and puts it into the cash flows of commerce. If everybody only bought precious metals and sat on their investments that kills commerce.
I will be receiving the biggest tax refunds from both Federal and State than I have ever received in my lifetime. (if the state refund isn’t an I.O.U.) This is a result of George W.’s and Arnold’s previous tax legistlation. I am going to take that money and go right back out and spend it on necessities, goods, and services. Collectively that is a major boost to the economy, to the cash flow.
I believe that anything that causes cash flow is good for the economy because the economy IS cash flow. If economy was only value and worth, then that gold could just sit underground, and those fields of grain could just sit unharvested and we could say we are all rich.
People always think that debt is bad. Debt is debt. It isn’t bad. What is bad is greed, which is hoarding and glorifying accrued value for value’s sake. It is bad, because good/bad is a morale judgement, and in Judeo/Christian philosophy, avarice or greed is a sin and considered evil and bad.
The only reason we know about the bail-out money being used for executive bonuses is because a New York State employee (Controller) violated his work ethic and revealed confidential tax records to the media, because he says he was morally outraged. Here, morality over-rode ethics, and legality. State Controllers do not legally and ethically have the right to publish personal financial records unless there was a crime. Getting a bonus at the expense of others is not a crime, it is morally reprehensible but not a crime.
What the government spends my tax money on is their business. I gave them the money. I elected them to spend it. However, when I vote next term, I base my vote based on what they spent their money on. If I don’t like the way they spent their money, I don’t vote for them. If any of that bail-out money gets to the financial institutions that fund the civil engineering projects I am working on then I support it. If the money is spent on the common defense I support it. If the money is spent on relief programs that don’t create jobs but only helps feed people then I don’t support it. That is what churches and relief organizations are all for, helping people; and those dollars are tax deductable.
One of my friends said that Wall Street and the Dow Industrial Average is “smoke and mirrors.” As for the smoke-and-mirrors, it is ALL smoke-and-mirrors. A dollar is an illusion of value. It isn’t real intrensic value, it is agreed value. You can’t eat a dollar, or clothe yourself in it. Smoke-and-mirrors is agreement, so it IS reality, until someone doesn’t agree with it.
My friend wrote me how China and Russia are contemplating refusal to receive any more United States Dollars (USD). At first this alarmed me. Then I realized it was a big “so what?” There is a new agreement-reality arising. Made-in-China is becoming a symbol of inferior and counterfeit quality. (Dry wall that emits sulfur fumes, low-quality electrical products, and toys and food products contaminated with lead). Russia exports what? Military hardware? Crime and violence? If China and Russia continue to provide goods and services of dwindling value and worth, they are aren’t going to be getting many USD anyway.
As for the “blame game” it is easy to make Washington wrong, but we put them there, and we can replace them, but with who? Economists like Greenspan? He was touted an economic genius/guru/hero, and now he is the scapegoat/bad guy/loser. Economists are as reliable as weathermen. They are accurate as long tomorrow is a lot like yesterday. They can’t predict earthquates, hurricanes, and tornados until they are already here. Then they sell books for $29.95 a pop to sell us the same thing the mass-media sells us; what we want, fear and paranoia.
Don’t worry, the Mayan’s say this is all coming to an end in 2012, so I agree with one thing my friend wrote…do something today that is fun and rewarding.
Written on 4-15-2009.