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Politics : Welcome to Slider's Dugout
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From: Northern Marlin1/31/2009 9:36:11 AM
4 Recommendations  Read Replies (1) of 50328
 
A model of the "Stimulus" plan

I sent this letter to the editors of the local paper:

Are you wondering about the “stimulus” package recently passed by Congress and being considered by the Senate? Here’s a simple model to illustrate the concept: Imagine a bath tub full of water to represent our economy. Take an empty pail and fill it with water from one end of the tub. Next, walk around to the other end of the tub. Some water will slosh out of the full pail. Last, pour the water back into the tub. The water you took out of the tub represents the value of the “stimulus” package (that’s right, it is taken from productive members of our economy through taxes, borrowing, or inflating the money supply). The amount that sloshes out of the full pail is the amount skimmed off by the new bureaucracy that will be formed to administer the “stimulus”. The water you poured back into the tub is the money that will be showered on the lucky individuals and businesses chosen for “stimulation” by the political class. However, the American economy as a whole will be worse off. The bottom line is this: government can not and has never been able to stimulate an economy.

If there are any flaws in the model please point them out to me. If you have any suggestions to make the text more readable or easy to understand please alert me.

Phil
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