Posted: June 3, 2010 in economy, politics, rants
Tags: ,

Saying “if we didn’t pass TARP & the stimulus, the economy would have been much worse” is like saying “if I didn’t do what the man with the gun said, he would have killed me”. Both statements are pure conjecture.

The fact is, we don’t know for sure if the gunman would have killed you if you didn’t do what he said. Maybe it was an empty, albeit convincing, threat. Same goes for the economy. Maybe it wouldn’t have been worse if TARP & the stimulus weren’t passed.

There’s actually evidence that taking a different approach would have been a better plan. There’s the depression of 1920-1921 (as bad from tip to trough as the Great Depression, but thanks to Harding’s mostly non-interventionist policies it didn’t last near as long) plus the depression that never was after WWII (economists predicted a depression because the govt cut spending, but it never happened). Those are just off the top of my head. Obviously, there are others.

But that’s neither here nor there because it’s become widely accepted that govt involvement in economic matters is a good thing. Why? Because they’ll make the numbers prove it. Want proof? Look at the stimulus numbers from CBO. They say the stimulus has created/saved over two million jobs. Their proof? An economic model that assumes for every stimulus dollar spent, it creates between $1.25 & $1.75, which translates into X amount of jobs. This is not based on facts or quantifiable evidence, only assumptions.

The fact is, over 450,000 people per month have filed new unemployment claims since the recession began. Over eight million people are still out of work. And we’re a long way past the 8% unemployment we weren’t supposed to exceed if the stimulus was passed. Still think you were right not to fight back against the man with the gun?


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