Failing Econ 101

Bernanke should be wearing dunce cap. He needs to take an economics refresher course. He's suggesting another "stimulus package".

When anybody says the "government" needs to spend money, remember that the government doesn't have any money. In order to get it, they have to take it from the taxpayers.

But, 40% of the people in the United States don't pay taxes; and they'll get "stimulus" checks too. Where exactly does that money come from? Why, from the rest of us who do pay taxes, of course.

So Bernanke's idea of an "economic stimulus" is to take our money and give it to somebody else. But wait. Neither the logic nor the math works. Whatever amount a non-taxpayer receives to spend (to stimulate the economy) has been taken from a taxpayer (whose ability to stimulate the economy is reduced by precisely that amount). Therefore, there is no net increase in purchasing power. There is, therefore, no increased "stimulation" of the economy. The exact same amount of money is available to spend; not a cent more. It's just in different wallets.

All the government did is move spending money from the people who earned it to the people who didn't.

If I have $100 to spend and you have $25 to spend, our total combined spending power is $125. If I'm forced to give you $25, you are $25 richer, and I am $25 poorer, but our total combined spending power is still $125. There has been no increase in our total spending power to "stimulate" the economy.

Remember, no matter the timing...any "government" money spent is taxpayer money taken. If not yesterday, then tomorrow. The piper always comes for his pay.

If money for "stimulus checks" is borrowed and comes due later, taxpayers will pay it. If it is diverted from other government projects, government will have to replace it, and taxpayers will pay it. One way or another, the transfer of wealth for the "distribution" of "stimulus checks" will be born by those who pay taxes, and benefit those who don't. And it will ultimately reduce the available capital for investment and increased productivity which will delay the recovery of the economy Bernanke is so desperately trying to "stimulate".

The Gunslinger