The Fake Outrage about Stimulus Package Waste

I read in the news about every week some story about wasteful spending related to the stimulus packages from both Bush and Obama. If you had the chance to confront a politician about it you'd get some fake outrage about how terrible it is and they'll promise to look into it. You must understand though that if they voted for the stimulus funds believing that they would help the economy, they are LYING about their concern for how it was spent.

You have to understand first that anyone who supports this type of economic rescue plan does not believe there is such a thing as waste when it comes to stimulus. Every politician has an economist who is close to them and assures them that this money had to enter the economy somewhere, and it mostly doesn't matter where.

President Obama introduced his stimulus as being available for "shovel ready" jobs to assure you that people would go to work immediately, but we find out everyday that pieces of the whole plan were spent on some silly projects.

As Bastiat pointed out over a hundred years ago, people who believe in this type of economic system believe that even if you use the money to hire people to break windows, the glass man gets paid and when the glass man has money he will buy food and goods and services with it. For this reason Keynesian economists and the politicians they advise will only pretend to be outraged by where the money is spent.

The fatal mistake of these plans is that they ultimately put the financial money supply in the wrong places. This cannot be centrally planned. Instead they give resources to the politically connected at the expense of those who may use it productively. So if the money is spent to hire a guy to hold a shovel, resources for someone to build and manufacture a better shovel will be scarcer. Even well-meaning ideas like "green jobs" or some other centrally planned industry will put resources in a place that a free market won't...at least not yet.

Our nation's hope to pay back the debt we've been accumulating since the 1980's will come from either currency devaluation (pay back cheaper dollars than those we borrowed) or through increased productive capacity. It's doubtful we'll reach higher productivity with an economy supported by reinflated market bubbles waiting for the next round of government influenced mal-investment to be exposed.

I'd like to see some genuine outrage about the government's role in these recessions and less fake outrage over how their "rescue" plans were enacted.