Tuesday, January 13, 2009

Send in the neoconservative clowns


Two articles on "stimulus" today in Kristol's rag.

One recommends having Congress fork over some amount of money -- the placeholder number is $2000 per capita by population -- to the states as "block grants."

The other recommends ... get this ... boosting "defense" spending.

Peter J. Hansen offers the "block grants" proposal as a "faster, better" alternative to federal "public works" projects.

Tom Donnelly touts the "defense" proposal to "help close the large and long-standing gap between U.S. strategy and military resources."

As the youngsters like to say, er, type: OMG! WTF?

Why have the federal government collect money and disburse it to the states as "block grants?" Let the states try to collect it themselves if that's what they think they need to do.

And "defense?" The primary activity of the US government for the last 60 years or more has been to see how much money it can transfer from your pocket to "defense" contractors' bank accounts. The US government spends more on "defense" than the next 20 countries combined. The bulk of the current defense budget ends up invested in waste, fraud, abuse and -- last but not least -- idiotic interventions in the quarrels of other countries, often escalating to just plain naked aggression. Want to link "stimulus" and "defense?" Start by cutting the "defense" budget in half.

Both of these proposals are non-starters not just from a libertarian perspective but from any reality-based perspective. Which, of course, is why they appear in a neoconservative publication.

The best way to get money into the economy is to leave money in the damn economy by reducing the amount of money taken through taxation.

And, if we're still on the right side of the Laffer Curve, the best way to get more money into "public works" and "defense" is to ... leave money in the damn economy where increased productivity and income will more than make up for reductions of taxes as a percentage of that income vis-a-vis government revenues.

Not that I approve of increasing government revenues, mind you -- I'd rather see us get all the way over onto the left side of the curve and start shrinking government. And I also reject the "supply side" argument respecting where tax cuts should start. Putting a "floor" under FICA and/or increasing personal exemptions to the federal income tax would put money into the demand side which, being an aggregate of more parts, would probably provide more accurate economic information (e.g. a thousand customers with $X each saying what they want to buy with it is a better indicator of economic demand than one entrepreneur with $X*1000 guessing at what those thousand people would want if they had the money to buy it).

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