Obama "stimulus" put to work
One common fallacy that is perpetuated every day is the thought that spending by the government "fixes" things. It seems important for many of the same articles to also point out how certain spending also "creates" jobs. The statements are not based on making true statements that advance the argument, but rather normative statements that allow fallacious principles to build up a pyramid of falsehoods. Barack Obama is more than a man in the sense that few politicians have in the history of the world, notable exception who will not be named in order to keep order. Obama can make any absurd statement sound reasonable, despite the obvious fallacious principles it rests itself upon. An example: "Because of this plan, stories like the one we're celebrating here in Columbus will soon take place all across this nation," as found here. In this statement, Barry is commenting on how the "stimulus" package will "create" new jobs. Lets look step by step....
1.) In order for new jobs to be created, a basic economic principle is that there must be new need. We can not hire someone unless there is new work to be done in either the goods or services sector of the economy. The need for a new worker in any segment comes about because someone spends the money out of their pocket. A government trying to spend money belies the fact of "helping" based on how the government gets their money.
2.) There is truly one way that the government ultimately gets the money that they use; they steal it. No matter how you look at it, governments take money against peoples' will. If you asked any citizen of any taxable economy (note:every country on Earth), they would rather keep their money than give it away. The number one reason for this is the basic functionality of humanity: the person who best knows how to spend my money is me. I know how I think, I know what I want, I know what I think will benefit me both in the short and the long term. It does not matter whether I am always right, because the learning process is one best served by individuals spending their own money, not by bureaucrats trying and failing. If I think my best option is to buy a python and let it live in my house, that is my choice, and as long as I do nothing to harm anyone else it should not matter what I do with my money. This all goes to emphasize the point that a government can not know what is best for each individual person, because they can not reasonably and efficiently go and talk to 200+ million people every day to see what every person thinks.
3.) This fact means that the government taking billions and trillions of tax dollars, over multiple decades, to "stimulate" the economy is based on fallacious principles. If the government was more efficient any of the time, they would be efficient all of the time. The most effective and reasonable tool of all time for allowing efficiency and rewarding people for correct decision making is the market. Not only is the market the best way to allow correct decisions to be rewarded, it is the most efficient and scalable punishment for poor decisions. If you take a higher risk you get a higher reward, but also a higher punishment. It can be no other way, until the government itself becomes involved.
If these three things are true, citizens are entitled to keep their money and spend as they see fit. In addition, if businesses keep the money they deserve and have earned, they allow the economy and credit markets to better function. This in turn creates another whole segment of capital and fluency in all markets and directions.
After reading the above sentences and paragraphs, one must look at how the government can create jobs. The government believes injecting capital (cash) into an endeavor is the most likely way to make it successful. They are at least half right this time, which is about fifty percent better than they tend to be. Injecting capital into an operation is the surest way to help it, but only if doing so implies a need for that operation to do their best to make a profit. This happens when citizens and other businesses spend money, by creating a need for the company to make profit. If the company does not make profit, citizens will stop buying from them, since they will be broadcast as a failure. This is how injecting capital can successfully bolster a company, and likely create jobs. Where the government and Keynsians in general steer the wrong direction is in thinking that the capital itself is the driving force, which is false. The driving force is the need to profit, because businesses that dont profit dont stay open. In the current situation, what will business owners or shareholders likely do if their government capital injection does not work? In a market the only thing to blame is the choices businesses make, but in this situation the government is available to blame. It could be the way they deal out the capital, the amounts the delegate or what restrictions they make on the company, etc. If a company fails after receiving the injections, they will only expect further help, even though a partial reason for failure is going about the solution the same way the initial problem was caused. I would not heal a burn by putting my hand on a candle. This is obvious in real life, but the situation at hand seems to be an imaginary world to the people to who it should be the realest. Electing politicians is supposed to be based on the election of the person most Americans believe can help the most, but has it not turned into a populartity contest?