The theory is that if people get extra money to spend they will spend it, which will in turn spark new development and economic growth creating more jobs. New jobs means more workers with more money, and then more spending. This sounds great, but it just isn’t that simple.

Why doesn’t it work? Because the government doesn’t have the money to give us. Think about it what options does the government have to generate money to give to all of it’s citizens. Borrowing from private organizations, Taxing the citizens for it, or creating new money.

Borrowing money from a private organization to give to others is about the same as paying a credit card with another credit card. Let’s face the fact that even the government isn’t going to get an interest free loan. So money that the organization could have spent to produce new products and to stimulate the economy itself is now being used to increase the national debt by being lent to the government. Not really a great plan huh?

Taxes are always a great way to generate new money. But that negates the entire process. You are going to take more money from me to give it back. What sense does that make? Option 2 is out.

It is the government why not just make some more money? Right? A great idea if you want your cereal to cost $8.00 a box. You can’t just go around creating new money because there is nothing to back it. Which means for every new dollar you create the last dollar made just went down in value a little bit. So the dollar becomes worth less and your money doesn’t go as far as it use to (inflation) and now we are back to the same situation we where trying to fix.

So how have we remedied our economy at all by give everyone economic stimulus? We haven’t and that is why you haven’t seen anything change since the inception of the program. You might have felt a little better because you were sitting on $600. But truthfully it probably just made it worse.

Tags: 2008 Election Issues
Posted in Politics |