Thursday, February 19, 2009

Brain tumor? Take two aspirin and call Congress in them morning.

In the long run, it doesn’t matter if the stimulus package has pork and earmarks in it. It doesn’t matter if it’s wasteful. It doesn’t matter if it addresses infrastructure. It doesn’t matter if it includes tax cuts or makes us energy independent.

What matters is getting money in the hands of consumers. Then consumers will buy stuff and businesses will hire people to make stuff to sell. The people they hire will get paid, so they’ll buy stuff, too. And soon we’ll be back in the whirlwind of earning, buying, selling, and paying that we called a healthy economy.

Then what?

We got here because people were buying more stuff than their paycheck would pay for. So they borrowed. They borrowed until they were paying so much interest that they couldn’t buy as much as they could have if they hadn’t borrowed. Obviously that has to end sometime, and it turned out that sometime was last fall. Consumers couldn’t borrow more so they bought less, so businesses started firing people who were suddenly getting paid to not make stuff that consumers were not buying.

So we have a recession because consumers lost their buying power because they borrowed until they couldn’t borrow any more. Our solution is to have the government take up the borrowing where the consumers left off. The borrowed money will go to businesses who will hire people to make stuff that people can buy because they have gotten hired with more borrowed money, and the whirlwind gonna whirl again! Somebody say Amen!!

Eventually the government will be paying so much interest that it won’t be able to hand out as much money as it would if it hadn’t borrowed. Obviously that has to end sometime, and when sometime comes around again there will nobody who can borrow money to give to the government to give to…well you get the picture.

We have an economic tumor growing in our economic brains, and we’re taking economic aspirin for it. Sooner or later the tumor will squeeze our brains so tight that we won't be able to avoid surgery. And we’ll find we can’t borrow money to pay for anesthesia.

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