Saturday, July 17, 2010

Shughart Agrees

William Shughart agrees with my assessment that Obama's "Recovery and Investment Act" stimulates neither.

Responding to the claim of Christian Romer, chairwoman of Obama's Council of Economic Advisers, that three dollar’s worth of personal income was generated by every federal dollar disbursed by the stimulus plan Shughart explains:

[W]hat are the principal sources of the public sector’s ready money? Washington has just three ways available to it for financing spending programs: taxing, borrowing or resorting to the Treasury’s printing press, all of which suck scarce resources from the private sector. Because wealth thereby is transferred from private to public use, expansions in the number of jobs “created” in “green” industries and other politically favored sectors of the economy must be less than the number of jobs destroyed in the private businesses that are forced to finance governmental economic “stimulus” packages but receive nothing in return.


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