Calling John Galt

The stimulus package that is.  Has government payments to individuals helped mitigate the impact of the current recession?

In the Freakonomics blog, Justin Wolfers tries to make the case for another round of Federal Stimulus.

Some argue that the original stimulus didn’t work, and so we shouldn’t try more.

This is silly for a variety of reasons. First, it is way too early to tell. Second, the economy may be bad, but to figure out whether the stimulus helped or hurt, you need to know the counterfactual: how would the economy have performed otherwise?

The two arguments here are stunning in their lack of logic.

1. If it is way too early to tell if the Stimulus was a failure, then it’s too soon to throw more money at the project!
2. The fact that we had a first stimulus destroys the counterfactual – just as not having a second stimulus destroys the counterfactual argument for continuing the program! How will the economy perform with more stimulus?

Finally, there’s the issue of all the unspent Stimulus. We’ve only used a fraction of the $800-billion originally allocated. Maybe Wolfers could argue we should have spent that allocation faster, and on actual activity that stimulates the economy and not special interest groups and partisan political projects?

If I buy a dozen eggs and eat two of them, it would be stupid to come back and say “Four eggs would be great! Let me buy another dozen!”

The resistance to the Stimulus is the broken eggs – the sheer amount of waste we must deal with to get to the “good spending.”  (Yes, I deny the existence of “good spending” in my opposition to Keynesian theory, but for the sake of argument if you grant them the possibility their own logic still fails.)

Has Goverment regulation and ineptitude created the 80k long waiting list for kidney transplants?  What do we need to do to solve this problem?  Is this something where free markets can work to save lives?

Do the voters deserve some of the blame? Definitely. We all do. Are they the sole reason California has the problems it does? Definitely not.

Is this a harbinger of what is to come should we as a nation not support everything the political elite want to do. Most definitely.

Bill Whittle nails it. Do we deserve the government that we have? I certainly hope not!

More from Meg Whitman:

Whitman says 50 percent of California’s spending on education, Grades K through 12, goes into overhead, not classrooms, compared with 20 percent in, for example, Connecticut.

Great post from Megan McArdle on the myths of Medicare cost savings.  She has some great arguments put forward by socialist supporting Nationalization of the health care system:

• National health care will be cheaper because we will reduce administrative overhead
• National health care will reduce wasteful competition in the form of me-too drugs
• National health care will reduce wasteful competition in the form of advertising and other marketing expenses
• National health care will allow us to rationally distribute care to where it does the most good rather than the current messy, wasteful hodge-podge
• National health care will use resources for production instead of profits
• National health care will achieve economies of scale in purchasing and record-keeping
• People will not overuse free goods because there are hard limits to desired consumption

Beware, you will see more of these as time goes on and the “debate” intensifies.  As she mentions, they all look good on paper, but fail in the real world.

If it waddles like a duck,
and quacks like a duck,
and swims like a duck,
and sits on little duck eggs to hatch ducklings…

…it must be a Fee.

Not just California:

“We do not have a revenue problem, we have a spending problem of epic proportions.”

So says Meg Whitman.