Basically we are sacrificing long term prospects to head off an immediate crisis, like the water damage the fire department does to your house to keep the flames from burning down.Sareth wrote:I am neither democrat nor republican. I'm libertarian, if that helps matters any. But I am confused a great deal about the stimulus package, as well as the bailouts.
I have a simple question I have yet to have answered.
"Where is the money coming from?"
. . . Anyone care to tell me how we're going to pay for this without undoing the very good we're trying to do?
The American economy is grinding to a halt, bleeding a hundred thousand jobs each week. The credit markets have been paralyzed for months and the productive parts of the economy have been slowly shutting down for lack of credit, which means lack of customers, which means little or no profits, which means even less chance of getting credit. Right now, only the Federal government has the credit resources to get the production cycle moving again.
The company I work for produces contractor’s tools, airplanes, and helicopters. The executives have laid off 20% of our work force—they canceled their own bonuses, bless their game little hearts—and are hoping major federal infrastructure work, aid to state governments, and loans to private industry will give our customers some money to spend on tools, airplanes, and helicopters. Our contractors buy things from their suppliers, we buy things from our suppliers, everyone pays their employees wages, and money starts cycling through the economy again. It’s not much more complicated than that. If no one else has the confidence to pump the business cycle, the government has to do it, or we deflate down to a fraction of industrial capacity and twenty or thirty percent unemployment. Welcome to the Third World! By the way, we will still owe the Chinese that other four trillion dollars. Can’t pay the interest on that with a stalled economy.