Acton Commentary: The Abracadabra Stimulus Plan

by Brittany Hunter on Wednesday, February 18, 2009

In this week’s Acton Commentary, Anthony Bradley exposes the “legislative incantations” designed to artificially create consumer demand (where none exists) via the stimulus bill. “Real needs must be permitted to create real demand, and thus truly sustainable jobs,” he writes.

Read the commentary at the Acton Institute website and share your feedback here.

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Esuga Abaya

You don’t properly account for the irrationality, sinfulness, and shortsightedness of human desire. While the market can tell us what is efficient, it cannot tell us what is virtuous.
mommakat

The government is not a Church and is not to dictate morality in the economy. The only exception is when it hurt others. Our government hasn’t outlawed pornography, abortion or contraception which are all immoral and sinful but endorsed by our government.
Dave

Certainly one cannot use government as the barometer of what is virtuous, one only has to look at the ingredients of the ‘stimulus’ bill to see this. Folks in government are human just like non-government folks and just as sinful. The ‘shortsightedness’ of those in government is a main cause of this housing/financial mess. To put your trust in those folks is a recipe for disaster. Actually I think a strong case can be made that those in government will tend, on average, to be less moral because power tends to corrupt oneself. Ultimately morality must come from within each person, from a desire to please God in what we say and do.
Jim Pakala

Obama is right to fund rail transportation just as Eisenhower did the Interstate system, although the amount for rail is miniscule in comparison. The “market” will not provide roads, rails, locks & dams, the FAA services, etc. Trains conserve energy, land, even my own nerves and pocketbook. Indeed, I now hate driving and flying because I fall asleep driving or have to fight looney traffic and because flying is a huge hassle nowadays as they frisk you, confiscate your stuff, and shoehorn you in. The problem is that we are way behind in rail transportation even as cities lose air service or become unaffordable to fly to. And cars of course are not public transportation.
Joseph Keckeissen

Bradley is half right. What he says about the absolute need for consumer validation is fine. But the consumers can´t validate what the producers (domestic or foreign) do not produce. An economy is motored by savings, investment, and production. Without production the consumers cannot validate anything. We ought to stop this nonseeense about consumer buying and begin to stree our long-lost tradition of saving. I do not see how this article touches upon morals. That is another subject.
Sincerely, jk
http://financialmarketmeltdown.blogspot.com/ Craig Bardo

In 1942, even Keynes came around to the belief that tax relief was superior to the notion of stimulus created by the aggregate demand of government spending. He literally forgot to take into account that government only funds itself through the private economy.

“In correspondence with the economist James Meade in 1942 Keynes says he is ‘converted’ to Meade’s idea of altering the social security payroll tax over the business cycle. Here are Keynes’s words:

I am converted to your proposal…for varying rates of contributions in good and bad times.

(June 16, 1942). Keynes, Collected Writings, vol. 27, p. 208.

…[Y]ou are able to show fluctuations in income of an order of magnitude which is significant in the context… So far as employees are concerned, reductions in contributions are more likely to lead to increased expenditure as compared with saving than a reduction
in income tax would, and are free from the objection to a reduction in income tax that the wealthier classes would benefit disproportionately. At the same time, the reduction to employers, operating as a mitigation of the costs of production, will come in particularly helpfully in bad times.

(July 1, 1942). Keynes, Collected Writings, vol. 27, p. 218.

In 1939 Henry Morgenthau, FDR’s Treasury Secretary told Congressional Democrats “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises … I say after eight years of this Administration we have just as much unemployment as when we started … And an enormous debt to boot!”