With Obama, Size Doesn't Matter

My buddy Tim has gotten in the habit of telling people that when it comes to the economy, he “wants to get his package stimulated”. Everyone thinks it’s funny except his wife. And let me tell ya, the package which team Obama is talking about is larger than any they’ve ever seen in Washington DC; a town that is all about size of your package and the larger the better. As many an American taxpayer can testify, they have always had a lot of big packages in DC, and they always seem to be doing the same thing to the taxpayer’s with them. But even on that scale this new one is a shocker.

According to our 44th president, he plans to spend roughly a Trillion dollars which he’s going to borrow from our children and grandchildren by issuing debt. He’s going to spend it with the intention of generating 3 million new jobs, 80% of which will be in the private sector. But that means that 20% of the jobs will be in the public sector… 600,000 new government jobs. And that depressing statistic tells you all you really need to know about Keynesian economic stimulus.

The truth is, when it comes to this stimulus package, size doesn’t matter, because the money will be spent in a way that impedes growth rather than encouraging it. In effect, the money will be wasted. Well … maybe not all of it, there is the occasional tax cut in there that might cause someone to actually produce something. But the vast majority will be thrown away on make work projects in Democratic districts, and a legion of community organizers. And that waste will be enough to reduce the economic return on this government ‘investment’ to a number so low that we’ll all regret having gone this way.

Think of it this way… An economy is like a Marathon, and you need lots of energy to run one. The best way to get set for that marathon is to work hard over a long period of time to get in shape. Make your heart, lungs and muscles into highly efficient machines that make absolute best use of the energy you provide them. This makes them strong and able to bounce back quickly from any external shocks or stress. You eat a well balanced diet while in training, but the night before the race you may load up on carbohydrates to bank a few last minute calories.

But that’s not what American society is doing. Instead we’re sitting on the couch complaining about how fast some of the other runners are. We talk about their unfair training practices or that their limbs (their labor market) are naturally more efficient than ours. We complain about their determination and demand that the rules be stacked to favor middle aged pot bellied retirees who sit on the couch all day. Then the night before the race we load up on sugar, caffeine and nicotine in the hope these drugs will give us the stimulus we need to run the race.

That sugar, caffeine and nicotine are the Obama stimulus plan. Will it stimulate the economy? Sure… in the short term it will stimulate the hell out of us just like sugar, and nicotine. But it won’t get us back on track. It won’t make our economy any more healthy and efficient. In fact, once we start to feel the after effects it will be clear that it not only didn’t help, but it actually hurt. The after effects of sugar and nicotine are a bloated waistline, a hacking cough, and maybe a few more serious diseases like Diabetes and lung cancer. The after effects of the Obama stimulus plan will be a bloated public sector (along with a bloated public debt), a devalued currency, and maybe a few more serious diseases like a widespread tax revolt, or credit devaluation.

Obama’s plan is to produce 3 million jobs with infrastructure projects. But the people who are losing their jobs are real estate agents, well fed UAW line workers, and Wall Street executives. Maybe it’s been a while since Obama has spent any time with the common folk, but the guys I know on Wall Street don’t know much about running backhoes’ or driving tractors. What he’s really going to do is create 3 million jobs that Americans don’t want to do, and that’s exactly who’s going to end up doing them. In New Jersey for instance, 280,000 illegal aliens work in the construction trades and will be the inevitable recipients of the relief for the homebuilder’s association that governor Corzine has been going on about.

Some in Congress say that we should train Americans to do those jobs, but that’s not the problem either. Any chump with a degree in Art History or Women’s Studies can swing a hammer or push a wheel barrow. The thing we’ll need to train Americans to do is to get by on $12,000 per year like the rest of the Guatemalan carpenters. But if I’m not mistaken, the Obama administration has a solution for that too.

Rather than borrowing the money from future generations they’ll just print money and pay off the debt today. That will kill 2 birds with 1 stone. The federal debt load will be conveniently reduced getting rid of one of those nagging statistics that politicians would otherwise have to try to distract people from every four years or so. And the unemployed $200,000 per year executives will all get jobs (and shovels) with the federal department of hole digging and refilling that pay them the same $200,000 per year that they made in their old jobs. Of course with all that inflation it might buy just a little less… but I’m sure Team Obama has a plan for that too. They can just use the economic emergency as justification to ‘fix’ (that’s fix as in “make permanent” not fix as in repair) prices. And I’m sure that can be done with no serious consequences so problem solved.

Some might say that Obama’s package is so big, that we’ve just got to get some stimulation from it. Well not to be wet noodle about the whole thing but in this case, size really doesn’t matter. There is no amount of money so big that government can’t waste every penny of it. It kind of reminds me of that movie from the 80’s with Richard Pryor, “Brewster’s Millions”. In order to inherit 300 million dollars a minor league ball player has to utterly waste 30 million in a month and have nothing left to show for it. He finds it tricky at first but eventually gets there by spending the money running for public office.

Obama’s problem is the inverse of Pryor’s. He needs to spend a Trillion dollars and somehow avoid having nothing to show for it, in order to get reelected to public office. Throw in Jack Black as his VP/Best Friend to play the role John Candy filled in the original, and find a way to work the New York Yankees into it and you’ve got a film deal. Someone get the screenwriter’s guild on the phone.

Some might complain that Obama’s not as funny as Richard Pryor but I don’t see that as a problem. Everyone knows that if you’ve got a big enough package, you don’t need to be funny.