More Editorializing, Just Because.

Right.

Now, from time to time I get email or private messages accusing me of making the things I talk about too overcomplicated for my readers to follow.

Based on the majority of those who comment, that seems unlikely in the extreme, but for the sake of argument, I will try to simplify.

I am opposed to any form of government "stimulus" as intervention into the market that does not take the form of reducing tax rates.

I will explain.

When you use a dollar of government money for ANY "stimulus" program, no matter what it is, that dollar has to come from somewhere. There are three things the government can do to get that dollar, and I will show you why each of them is a bad idea.

First, there's the obvious: taxation. This is when the government steals a dollar from someone, and spends it somewhere, to "stimulate" things. The problem is that then the person you stole it from, doesn't have it; thus negating the effect of your "stimulus." 

This is the functional equivalent of being in a leaky boat, bailing a bucket of water out of the back of the boat, and pouring it into the front because there's not as much water there yet. You're still sinking. It's just that now both ends of the boat are sinking at once, so you won't tilt as much.

Second, there's the only slightly less obvious: borrowing. This is when the government takes out a loan, on which it will owe interest, and spends it somwhere, to "stimulate" things. The problem is that not only you have to pay it back, but you have to pay back more than you borrowed, thus not only negating the effects of the "stimulus" but in fact making things worse.

This is the functional equivalent of being in a leaky boat, bailing a bucket of water out of the back of the boat, and pouring that bucket and a bottle of drinking water into the front because there's not as much water there yet. You're still sinking. It just that now the front end is sinking faster than the back, and the whole boat is sinking faster than it was before.

Third, there's the simplest, and thus most often used: printing more money! This is when the government says, "We need another dollar!" and prints one, then spends it somewhere to "stimulate" things. The problem is that the value of a dollar is based strictly on what you can buy with it; the greater the supply of dollars, the smaller this gets.. The more dollars there are, the less they're worth; thus negating the value of the "stimulus" and making things worse, because when you devalue the currency, other problems start to crop up fairly quickly, like increased interest rates - to try to stop the currency weakening - which discourages lending.

This is the functional equivalent of filling a leaky boat with snow instead of water, because it's lighter. You're still sinking, but now you're fucking cold, too.

I realize that these are overly complex ideas, but really.

Cutting taxes is good. It actually provides a stimulus effect. 

Why?

Because every dollar the government does NOT steal from us is one we can then spend, which ACTUALLY DOES stimulate the economy.

...It just doesn't stimulate the government.