If the $800 billion stimulus bill passes, which is still debatable, it will have minimum impact at best. Why? Because unlike the 1930's when government spending would go into the pockets of American workers and American companies to build American infrastructure, any stimulus that is initiated by the US government today will almost immediately exit the country and end up in the hands of a foreign country.
For example, think about the Blue Ridge Parkway which was built during the Great Depression as a way of stimulating the economy. American companies were paid to build it, and Americans were paid to do the labor. The money that went to companies was used to purchase equipment and materials. These items were almost certainly manufactured by other American companies. Thus the stimulus money created jobs on the Parkway, and in the equipment manufacturing plant in Detroit, the shovel factory in Atlanta, etc. Those business hired people who got paid and thus kept the stimulus going. Workers purchased goods with their earned money that was almost certainly American made. Thus the stimulus flowed throughout the entire economy.
Now consider what will happen today. A stimulus package to build a bridge. It will be awarded to a foreign national company who will use it to create a few jobs in the US to build the bridge but the bulk of the money will exit the American economy and go back to the home country. The materials will be purchased from the Japanese and the Chinese and maybe the Koreans.
The workers will take their money and buy a Japanese car, or maybe a nice HDTV from China, etc.. Thus their money will help sustain a retail job in the US and then exit the American economy and stimulate the Chinese Japanese Or Korean economy.
Because America produces next to nothing in this country, we cannot spend our way out of this mess like we did in the 1930's.
What the American economy needs is incentive to produce things in this country that will be desired by other Americans and people in other countries. Not more products produced by American companies in China (like Apple's iPod) but true quality, American products produced by American workers
Wow...that almost sounds like a union advertisement. Maybe they were right after all.
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2 comments:
Hey, is there a little controversy brewing on the Pulpit? It has not gone unnoticed to the Pulpites that this post looks strangely like the comment from the prior article...hmmmmmm.
We want - no DEMAND - more original content!!
I thought that was odd too. I posted the "Why The Stimulus Bill Won't Work" on Sun, Feb 8, 2009 at 12:19 PM.
The previous post's comment was made at
Sat, Feb 7, 2009 at 10:25 PM, but I never read it (since the site now allows posting without moderation).
I thought it was odd that the poster was stealing my stuff, but now it looks like it is actually the other way around.
Perhaps we're listening to the same sources?
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