If I hear one more word about this stimulus package, I may lose my mind.
Actually, I may go nuts if I simply hear the word "stimulus" again. God only knows how irate I'll be if this monster gets passed.
But, of course, we know something will be passed, don't we? After all, we've got few conservatives left in Congress. The moment a Republican president started pushing to bail out our failing U.S. auto industry and was joined in the effort by a Republican running for president, it was pretty clear that fiscal conservatives were a dying breed.
Sure, real conservatives like Ron Paul are howling about this stimulus nonsense, but he's in a true minority. Even Republicans in Congress have picked up on the disturbing theme that the free market needs a major nudge from the government and that throwing good money after bad is a great idea.
For just a second, let's overlook the junk in the stimulus package that has nothing to do with economic growth (i.e., sneaking in some nasty government controls over health care, etc.) and talk about the flawed premise that gave rise to this nonsense. What the government is attempting to do is simply prop up a system that's unsustainable.
Here's the thing. Our entire economy is based on credit and, as such, is an illusion. Things have gotten so odd that prosperity is often viewed as something that can be obtained by those who have a good credit rating. When enough people borrow money like it will never be paid back, they get bitten one day.
Things have gotten so odd that a good number of economists out there have argued against tax cuts by declaring that they won't help because people might be tempted to (gasp!) save money instead of spend it. No, the answer to getting the economy going again is to get credit flowing once again, thus allowing people to borrow more money and get themselves further in debt.
How do we do that? Well, we have the government borrow money from our friends in Japan and China, thus putting the nation further in debt. The problem, of course, is that individuals and governments must make good on their debts one day, yet the government seems perfectly satisfied to delay that day as long as possible.
So we're just about to jump in and push off the inevitable for a bit longer. Still, we can't borrow forever and the longer it takes to learn that fact, the worse things will be when it does come time to satisfy those outstanding debts.
It's worth mentioning that some dramatic, societal changes will have to take place before we can address the nation's real economic problems. I doubt more than a few politicians have the guts to discuss anything else but the quick fix, temporary solution of a stimulus package.
We, as a society, have gotten ourselves in a mess. Look at it this way. If we go back 50 years, a fellow with a solid, middle class job like mine could easily afford to support a wife and a couple of kids. Here in 2009, however, my wife works and we get by just fine by virtue of her income.
What's changed? Taxes have gone through the roof in the past 50 years, the cost of living has increased dramatically and wages haven't risen nearly as much as everything else has. In that environment, it only makes sense that a lot of people have fallen back on credit to augment their incomes.
When you combine the easy availability of credit with the notion that we ought to have everything we want right now, it makes sense that people choose to go deep into debt rather than decide to save up and actually buy stuff with real money. When people can get credit easily, they're less fussy about how much things actually cost, so it's no surprise that we've watched the prices of everything go through the roof.
Take the housing market, for example. The ridiculous gains in values we saw through about 2006 were based -- in part -- on easily available credit. If someone with a pulse and a job can get a "zero down" loan to buy about any home he wants, then that person is less picky about how much the house actually costs.
The same goes for cars and just about anything else. If we're going to rely on growth in credit debt to fuel the economy, the problems that have been playing hell with us right now might get smaller for a time, but they won't vanish. No, they might lie dormant for awhile, but they'll grow larger in time.
In other words, the feds can dump as much money into this economy as they can borrow. The root economic problems, however, will remain.