Short but sweet today. I saw that the head of Obama’s Council of Economic Advisers (soon to be departing head), Christina Romer, made an interesting comment on how to fix the economy. She said we need to cut taxes (good) and increase government spending (what?). Sometime you just have to shake your head. You would think that her leaving is a good thing, but those left behind think we should increase both taxes and government spending. She used the liberal operative word investments to describe this spending; I guess hoping to disguise it from those not familiar with the terminology. I spent a little under two minutes to find a couple of reports that show the fallacy of this argument. We have Japan’s disaster, and also a report on similar spending in the US.
I guess you can add to these reports the common sense principle that when the government spends money it first has to either tax it out of the economy or borrow it. It is not creating anything, which is why government stimulus does not create economic growth. The left continues to think that they can reallocate resources better than the free market; an idea that is proven wrong every time they try it.
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