Idaho's Weekly Journal of Local & National Commentary Week 2815


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by Free Market Duck

The Great “Stimulus” Hoax
Feb 17, 2009

Everybody wants a “Stimulus” but nobody has defined what a “Stimulus” is or where the term came from.

Washington, DC – Pour yourselves another hot cup of Rocket Java and listen up, girl friends.

   Former President George Bush put forth a $1.2 Trillion “Stimulus” Package called The TARP (Troubled Asset Relief Program).  Congress voted “YES.”  Nine months later, new President Barack Obama put forth another $1.2 Trillion "Stimulus" Package called The ARRA (America’s Recovery and Reinvestment Act).  Congress voted "YES."

   What the hell is the definition of a "Stimulus" and where did the term come from? 

   When British pseudo economist Lord John Maynard Keynes gave his Big Time Socialist Easter Egg Hunt Speech, essentially stating, "All the Government has to do is bury lots of non-backed paper money, send everybody out on a monetary Easter Egg Hunt, and when the masses discover all the booty and spend it, they will have created a stimulus 'Multiplier Effect' of -- hey, let's pull this out of a hat like White Rabbit in Alice in Wonderland -- 1.75 Pound Notes for every 1 Pound Note buried in the dirt."

   Brilliant American economists quickly extrapolated this idiotic Easter Egg Hunt analogy from the Pound Note to the Dollar and, hesto presto, we got an entire school of Village Economic Idiots in American universities proclaiming that for every $1 the U.S. government shoves into the economy, we hit the jackpot and receive $1.75 (or whatever positive multiplier number they currently agree upon).  Keynes in his idiotic Easter Egg Monetary Scenario, assumed that all other parameters in basic free market economics 101 wouldn’t exist.  Note also that Keynes’ Stimulus Multiplier must be a positive number greater than 1.00, else – following Keynesian logic -- one would be creating a Negative Multiplier Effect, which would, oh-oh, tend to destroy an economy instead of enriching it.  More about that later.

   Finally, the Keynesian Village Economic Idiots multiply Barack Obama's $800 Billion (make that $1.2 Trillion with interest) Economic "Stimulus" Package times The Assumed Magic Multiplier Number, divide some portion of that by the average annual union worker wage rate, and Wowie Zowie come up with how much "Stimulus" injection of non-backed Pulp Fiction Dollars it takes to presumably create 4 million jobs!  Yahoo!  Solid economics, right?

   Buzz, wrong!

   Unfortunately... ah hem, cough, cough, what if The Multiplier Effect Premise is, duh... WRONG?  What if other subjective free market parameters exist -- along with previous governmental interventions into the market -- and what if these parameters play a more pivotal role in the market to dampen the so-called Multiplier Effect -- even reducing it to less than 1.00 -- than the Keynesian Village Economic Idiots realize?

   As it turns out, there is NO such animal as The Stimulus Multiplier Effect.

   The Stimulus Multiplier Effect was, and is, a Fig Newton of Keynes' socialist imagination.

   In fact, hundreds of economists today, using the numbers and models of the Keynesian Village Economic Idiots have come up with different – yes, girl friends, different -- Multiplier Effect Numbers which are more like 0.48, or 0.37, or 0.75, or less.

   Which means that these economists’ results show that for every $1 that the Feds inject as ha-ha a so-called "Stimulus," we get back only 48-cents or less.  So, even using the Village Economic Idiots' Quantitative models, Obama's $1.2 Trillion Economic "Stimulus" Package would DESTROY jobs and INCREASE unemployment, not create more jobs.  Never mind all the rest of the individual rights and constitutional issues surrounding the ridiculous idea of a Multiplier Stimulus Effect in the first place.

   Therefore, based upon false economic premises of the Keynesian Village Idiots, President Obama and Congress are pouring trillions and trillions of non-backed Pulp Fiction Dollars into the U.S. market in the hopes that it will “Stimulate” a Multiplier Effect greater than 1.00, create 4 million jobs, and, hooo boy, enrich the economy.  That’s funny (not really), but history has shown over and over again that this type of ridiculous hyper-inflation of a nation’s Funny Money destroys an economy, increases unemployment, and usually ends up in trade protectionist wars as all nations retaliate with their own Pulp Fiction Paper Money.

   Once again, it looks like the politicians got it bassackwards, as usual.  In fact, isn’t this type of government monetary manipulation exactly the same policy that got us into the subprime mortgage and toxic derivative financial mess that we’re now in?

And since the Federal Reserve, the Treasury, and Congress already destroyed the value of the U.S. Dollar with Keynesian pseudo-economics, including their insane concept of a presumed government “Stimulus” Multiplier Effect to enrich the economy, it is not surprising that graduates of this philosophy from our major universities gravitated to Wall Street where they extrapolated these same deficit concepts to what we now call “toxic derivatives,” which – like the Dollar – also have no value and thus precipitated our current financial crisis.

   I guess that's why FDR's Treasury Sec Henry Morgenthau said in 1939, after six years of failed jobs and other government programs started in 1933, "We have failed!  Our unemployment in 1939 is the same as it was (20%-25%) when we started our jobs programs in 1933, except that now we have an extraordinarily huge debt!" – FM Duck

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