Rich Lowry on the Stimulus

Rich Lowry released a column this morning entitled The Stimulus — The Anatomy of a Failure, and it is worth reading.

I had only two problems with the article, as summarized below:

1) It's not just that the stimulus is not working, it's that it is making matters worse. The sheer magnitude of government intervention in the economy is causing uncertainty except in one regard - the deficits must ultimately lead to higher taxes and/or higher inflation in the future. Both of these factors inhibit investment and economic activity and will only delay the market corrections that we desperately need to get back on the road to recovery.


2)I think it’s a mistake to accept the premise that the government is in fact capable of stimulating the economy. Yes, maybe the government can shift money around and make it appear that the economy has temporarily improved, but when it’s all said and done, the government has no resources of its own, so in order to spend anything, the government first has to confiscate the money from the private sector. For every dollar that the government spends, that’s one dollar not available to someone else 1) to spend, 2) to invest, or 3) lend (either directly or by putting the money in a savings account for the bank to lend out).